House File 340 - Introduced HOUSE FILE 340 BY KAUFMANN A BILL FOR An Act relating to public education funding by extending the 1 period of time for collecting sales tax for deposit in the 2 secure an advanced vision for education fund, authorizing 3 uses for revenues received from the fund, and authorizing 4 school districts to adopt a district cost per pupil budget 5 adjustment. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 2298YH (3) 87 md/sc/jh

H.F. 340 Section 1. Section 257.2, subsection 2, Code 2017, is 1 amended by striking the subsection. 2 Sec. 2. NEW SECTION . 257.14A District cost per pupil equity 3 —— budget adjustment. 4 1. The board of directors of a school district with a 5 regular program district cost per pupil that is less than the 6 highest regular program district cost per pupil among all 7 school districts in the state for the same budget year that 8 wishes to receive the budget adjustment under this section may 9 adopt a resolution by May 15 preceding the budget year and 10 shall notify the department of management of the amount of the 11 budget adjustment to be received, subject to the limitations 12 of subsection 2, paragraph “a” . 13 2. a. For budget years beginning on or after July 1, 2018, 14 each school district that approved a budget adjustment under 15 subsection 1 shall receive a budget adjustment for that budget 16 year in an amount not to exceed the difference between the 17 school district’s regular program district cost per pupil and 18 the highest regular program district cost per pupil among all 19 school districts in the state multiplied by the district’s 20 weighted enrollment. The resolution adopted under subsection 1 21 may specify a budget adjustment amount that is less than the 22 maximum amount authorized under this paragraph “ a ”. 23 b. The school district shall fund the budget adjustment 24 solely using moneys from its distribution of moneys received 25 from the secure an advanced vision for education fund under 26 section 423F.2. Amounts used to fund the budget adjustment may 27 be used for any school general fund purpose. 28 3. A budget adjustment received under this section shall 29 not affect the eligibility for or amount of any other budget 30 adjustment authorized by law for the same budget year. In 31 addition, a budget adjustment under this section shall be 32 limited to the budget year for which the adjustment was 33 authorized and shall not be included in any computation of a 34 school district’s cost for any future budget year. 35 -1- LSB 2298YH (3) 87 md/sc/jh 1/ 5

H.F. 340 Sec. 3. Section 423.2, subsection 11, paragraph b, 1 subparagraph (3), Code 2017, is amended to read as follows: 2 (3) Transfer one-sixth of the remaining revenues to the 3 secure an advanced vision for education fund created in section 4 423F.2 . This subparagraph (3) is repealed December 31, 2029 5 effective January 1, 2050 . 6 Sec. 4. Section 423.2, subsection 14, Code 2017, is amended 7 to read as follows: 8 14. The sales tax rate of six percent is reduced to five 9 percent on January 1, 2030 2050 . 10 Sec. 5. Section 423.5, subsection 5, Code 2017, is amended 11 to read as follows: 12 5. The use tax rate of six percent is reduced to five 13 percent on January 1, 2030 2050 . 14 Sec. 6. Section 423.43, subsection 1, paragraph b, Code 15 2017, is amended to read as follows: 16 b. Subsequent to the deposit into the general fund of 17 the state and after the transfer of such revenues collected 18 under chapter 423B , the department shall transfer one-sixth of 19 such remaining revenues to the secure an advanced vision for 20 education fund created in section 423F.2 . This paragraph is 21 repealed December 31, 2029 effective January 1, 2050 . 22 Sec. 7. Section 423F.3, subsection 1, paragraph d, Code 23 2017, is amended to read as follows: 24 d. For any authorized school infrastructure purpose or 25 project of the school district as defined in subsection 6 . 26 Sec. 8. Section 423F.3, subsection 3, paragraph b, Code 27 2017, is amended to read as follows: 28 b. If the board of directors intends to use funds for 29 purposes or projects other than those listed in paragraph 30 “a” , or change the use of funds to purposes or projects other 31 than those listed in paragraph “a” , the board shall adopt a 32 revenue purpose statement or amend an existing revenue purpose 33 statement , subject to approval of the electors, listing the 34 proposed use of the funds. School districts shall submit the 35 -2- LSB 2298YH (3) 87 md/sc/jh 2/ 5

H.F. 340 statement to the voters no later than sixty days prior to the 1 expiration of any existing revenue purpose statement or change 2 in use not included in the existing revenue purpose statement. 3 Sec. 9. Section 423F.3, subsection 6, Code 2017, is amended 4 by adding the following new paragraph: 5 NEW PARAGRAPH . 0d. For school budget years beginning on or 6 after July 1, 2018, “school infrastructure” includes any of the 7 following: 8 (1) School district transportation costs. 9 (2) Costs of funding a district cost per pupil equity budget 10 adjustment under section 257.14A. 11 (3) Costs incurred by the school district to administer 12 assessments required under section 256.7 subsection 21, 13 paragraph “b” , subparagraphs (1) and (2). 14 Sec. 10. Section 423F.3, subsection 7, Code 2017, is amended 15 to read as follows: 16 7. The general assembly shall not alter the purposes for 17 which the revenues received under this section may be used from 18 infrastructure and purposes, property tax relief purposes , 19 and budget adjustment purposes under section 257.14A to any 20 other purpose unless the bill is approved by a vote of at least 21 two-thirds of the members of both chambers of the general 22 assembly and is signed by the governor. 23 Sec. 11. Section 423F.6, Code 2017, is amended to read as 24 follows: 25 423F.6 Repeal. 26 This chapter is repealed December 31, 2029 effective January 27 1, 2050 . 28 Sec. 12. IMPLEMENTATION. The approval requirement of 29 section 423F.3, subsection 7, Code 2017, shall not apply to 30 this Act. 31 EXPLANATION 32 The inclusion of this explanation does not constitute agreement with 33 the explanation’s substance by the members of the general assembly. 34 This bill relates to public education funding by extending 35 -3- LSB 2298YH (3) 87 md/sc/jh 3/ 5

H.F. 340 the period of time for collecting sales tax for deposit in 1 the secure an advanced vision for education (SAVE) fund, 2 authorizing uses for funding received from the fund, and 3 authorizing school districts to adopt a district cost per pupil 4 equity budget adjustment. 5 Code section 423.2 imposes a state tax of 6 percent upon 6 the sales price of all sales of tangible personal property, 7 consisting of goods, wares, merchandise, and other items 8 designated by statute, sold at retail in the state to 9 consumers, unless specifically exempted by statute. Generally, 10 by operation of law, a sale subject to the sales tax is also 11 subject to the use tax. Following the transfer of amounts 12 required by statute, if applicable, one-sixth of the remaining 13 state sales tax revenue from the 6 percent tax is transferred 14 to the SAVE fund created in Code section 423F.2. Moneys in 15 the SAVE fund are allocated to school districts on a per pupil 16 basis to be used for infrastructure and property tax relief 17 purposes specified in Code chapter 423F. Under current law, 18 the sales tax rate of 6 percent is reduced to 5 percent on 19 January 1, 2030, and Code chapter 423F, along with other 20 corresponding provisions, is repealed December 31, 2029. 21 This bill extends the 6 percent sales tax rate, the 22 allocation to the SAVE fund, and the statutory repeal of Code 23 chapter 423F until January 1, 2050. 24 The bill establishes a district cost per pupil equity budget 25 adjustment. The board of directors of a school district with 26 a regular program district cost per pupil that is less than 27 the highest regular program district cost per pupil among all 28 school districts in the state for the same budget year may 29 annually adopt a resolution to receive the budget adjustment 30 authorized in the bill. 31 For budget years beginning on or after July 1, 2018, 32 an eligible school district that has approved the budget 33 adjustment shall receive a budget adjustment in an amount not 34 to exceed the difference between the school district’s regular 35 -4- LSB 2298YH (3) 87 md/sc/jh 4/ 5

H.F. 340 program district cost per pupil and the highest regular program 1 district cost per pupil among all school districts in the state 2 multiplied by the district’s weighted enrollment. The bill 3 requires the school district to fund the budget adjustment by 4 using moneys received from the SAVE fund. Amounts used to fund 5 the budget adjustment may be used for any school general fund 6 purpose. 7 The bill specifies that the budget adjustment received does 8 not affect the eligibility for or amount of any other budget 9 adjustment authorized by law for the same budget year and that 10 the amount of the budget adjustment shall not be included in 11 any computation of a school district’s cost for any future 12 budget year. 13 As part of the restrictions on the use of revenues received 14 from the SAVE fund, Code section 423F.3 defines “school 15 infrastructure”. The bill authorizes additional purposes for 16 which a school district may use funds received from the SAVE 17 fund by modifying the definition of “school infrastructure”. 18 Those additional purposes are: (1) transportation costs of 19 a school district; (2) costs of funding a district cost per 20 pupil equity budget adjustment, as authorized in the bill; and 21 (3) costs incurred by a school district to administer certain 22 student achievement assessments. 23 Code section 423F.3, subsection 7, provides that the general 24 assembly shall not alter the purposes for which SAVE fund 25 revenues received may be used from infrastructure and property 26 tax relief purposes to any other purpose unless the bill is 27 approved by a vote of at least two-thirds of the members of 28 both chambers of the general assembly and is signed by the 29 governor. The bill specifies that such approval requirement 30 does not apply to the bill. 31 -5- LSB 2298YH (3) 87 md/sc/jh 5/ 5