HF 340 (LSB 2298YH (3) 87)

HOUSE FILE 340

BY  KAUFMANN

A BILL FOR

An Act relating to public education funding by extending the period of time for collecting sales tax for deposit in the secure an advanced vision for education fund, authorizing uses for revenues received from the fund, and authorizing school districts to adopt a district cost per pupil budget adjustment.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 257.2, subsection 2, Code 2017, 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 amount of the budget adjustment to be received, subject to the limitations of subsection 2, paragraph “a”.
   2.  a.  For budget years beginning on or after July 1, 2018, each school district that approved a budget adjustment under subsection 1 shall receive 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 weighted enrollment. The resolution adopted under subsection 1 may specify a budget adjustment amount that is less than the maximum amount authorized under this paragraph “a”.
   b.  The school district shall fund the budget adjustment solely using moneys from its distribution of moneys received from the secure an advanced vision for education fund under section 423F.2. Amounts used to fund the budget adjustment may be used for any school general fund purpose.
   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 423.2, subsection 11, paragraph b, subparagraph (3), Code 2017, is amended to read as follows:
   (3)  Transfer one-sixth of the remaining revenues to the secure an advanced vision for education fund created in section 423F.2. This subparagraph (3) is repealed December 31, 2029 effective January 1, 2050.
    Sec. 4.  Section 423.2, subsection 14, Code 2017, is amended to read as follows:
   14.  The sales tax rate of six percent is reduced to five percent on January 1, 2030 2050.
    Sec. 5.  Section 423.5, subsection 5, Code 2017, is amended to read as follows:
   5.  The use tax rate of six percent is reduced to five percent on January 1, 2030 2050.
    Sec. 6.  Section 423.43, subsection 1, paragraph b, Code 2017, is amended to read as follows:
   b.  Subsequent to the deposit into the general fund of the state and after the transfer of such revenues collected under chapter 423B, the department shall transfer one-sixth of such remaining revenues to the secure an advanced vision for education fund created in section 423F.2. This paragraph is repealed December 31, 2029 effective January 1, 2050.
    Sec. 7.  Section 423F.3, subsection 1, paragraph d, Code 2017, is amended to read as follows:
   d.  For any authorized school infrastructure purpose or project of the school district as defined in subsection 6.
    Sec. 8.  Section 423F.3, subsection 3, paragraph b, Code 2017, is amended to read as follows:
   b.  If the board of directors intends to use funds for purposes or projects other than those listed in paragraph “a”, or change the use of funds to purposes or projects other than those listed in paragraph “a”, the board shall adopt a revenue purpose statement or amend an existing revenue purpose statement, subject to approval of the electors, listing the proposed use of the funds. School districts shall submit the statement to the voters no later than sixty days prior to the expiration of any existing revenue purpose statement or change in use not included in the existing revenue purpose statement.
    Sec. 9.  Section 423F.3, subsection 6, Code 2017, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  0d.  For school budget years beginning on or after July 1, 2018, “school infrastructure” includes any of the following:
   (1)  School district transportation costs.
   (2)  Costs of funding a district cost per pupil equity budget adjustment under section 257.14A.
   (3)  Costs incurred by the school district to administer assessments required under section 256.7 subsection 21, paragraph “b”, subparagraphs (1) and (2).
    Sec. 10.  Section 423F.3, subsection 7, Code 2017, is amended to read as follows:
   7.  The general assembly shall not alter the purposes for which the revenues received under this section may be used from infrastructure and purposes, property tax relief purposes, and budget adjustment purposes under section 257.14A to any other purpose unless the bill is approved by a vote of at least two-thirds of the members of both chambers of the general assembly and is signed by the governor.
    Sec. 11.  Section 423F.6, Code 2017, is amended to read as follows:
   423F.6  Repeal.
   This chapter is repealed December 31, 2029 effective January 1, 2050.
    Sec. 12.  IMPLEMENTATION.  The approval requirement of section 423F.3, subsection 7, Code 2017, shall not apply to this Act.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to public education funding by extending the period of time for collecting sales tax for deposit in the secure an advanced vision for education (SAVE) fund, authorizing uses for funding received from the fund, and authorizing school districts to adopt a district cost per pupil equity budget adjustment.
   Code section 423.2 imposes a state tax of 6 percent upon the sales price of all sales of tangible personal property, consisting of goods, wares, merchandise, and other items designated by statute, sold at retail in the state to consumers, unless specifically exempted by statute. Generally, by operation of law, a sale subject to the sales tax is also subject to the use tax. Following the transfer of amounts required by statute, if applicable, one-sixth of the remaining state sales tax revenue from the 6 percent tax is transferred to the SAVE fund created in Code section 423F.2. Moneys in the SAVE fund are allocated to school districts on a per pupil basis to be used for infrastructure and property tax relief purposes specified in Code chapter 423F. Under current law, the sales tax rate of 6 percent is reduced to 5 percent on January 1, 2030, and Code chapter 423F, along with other corresponding provisions, is repealed December 31, 2029.
   This bill extends the 6 percent sales tax rate, the allocation to the SAVE fund, and the statutory repeal of Code chapter 423F until January 1, 2050.
   The 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. 
   For budget years beginning on or after July 1, 2018, an eligible school district that has approved the budget adjustment shall receive a budget adjustment 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 weighted enrollment. The bill requires the school district to fund the budget adjustment by using moneys received from the SAVE fund. Amounts used to fund the budget adjustment may be used for any school general fund purpose.
   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 amount of the budget adjustment shall not be included in any computation of a school district’s cost for any future budget year.
   As part of the restrictions on the use of revenues received from the SAVE fund, Code section 423F.3 defines “school infrastructure”. The bill authorizes additional purposes for which a school district may use funds received from the SAVE fund by modifying the definition of “school infrastructure”. Those additional purposes are: (1) transportation costs of a school district; (2) costs of funding a district cost per pupil equity budget adjustment, as authorized in the bill; and (3) costs incurred by a school district to administer certain student achievement assessments.
   Code section 423F.3, subsection 7, provides that the general assembly shall not alter the purposes for which SAVE fund revenues received may be used from infrastructure and property tax relief purposes to any other purpose unless the bill is approved by a vote of at least two-thirds of the members of both chambers of the general assembly and is signed by the governor. The bill specifies that such approval requirement does not apply to the bill.