HF 404 (LSB 2338YH (3) 87)

HOUSE FILE 404

BY  SHEETS

A BILL FOR

An Act relating to public school funding by establishing a transportation equity program, providing for adjustments to regular program state foundation aid amounts, and making appropriations.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 257.7, subsection 1, Code 2017, is amended to read as follows:
   1.  Budgets.  School districts are subject to chapter 24. The authorized expenditures of a school district during a base year shall not exceed the lesser of the budget for that year certified under section 24.17, including any adjustment required by section 257.17A, plus any allowable amendments permitted in this section, or the authorized budget, which is the sum of the combined district cost for that year, the actual miscellaneous income received for that year, and the actual unspent balance from the preceding year, including any adjustment required by section 257.17A.
    Sec. 2.  NEW SECTION.  257.17A  Regular program state foundation aid adjustment —— transportation costs.
   1.  a.  For the budget year beginning July 1, 2018, the department of management shall, following the determination of the total amount of state foundation aid payable to each school district under section 257.16, subsection 1, and notwithstanding the minimum foundation aid provisions in section 257.1, subsection 2, reduce the total amount of regular program state foundation aid payable to each school district by an amount equal to the school district’s budget enrollment multiplied by twelve and one-half percent of the state average transportation costs per pupil, as calculated in section 257.31, subsection 17.
   b.  For the budget year beginning July 1, 2019, the department of management shall, following the determination of the total amount of state foundation aid payable to each school district under section 257.16, subsection 1, and notwithstanding the minimum foundation aid provisions in section 257.1, subsection 2, reduce the total amount of regular program state foundation aid payable to each school district by an amount equal to the school district’s budget enrollment multiplied by twenty-five percent of the state average transportation costs per pupil, as calculated in section 257.31, subsection 17.
   c.  For the budget year beginning July 1, 2020, the department of management shall, following the determination of the total amount of state foundation aid payable to each school district under section 257.16, subsection 1, and notwithstanding the minimum foundation aid provisions in section 257.1, subsection 2, reduce the total amount of regular program state foundation aid payable to each school district by an amount equal to the school district’s budget enrollment multiplied by thirty-seven and one-half percent of the state average transportation costs per pupil, as calculated in section 257.31, subsection 17.
   d.  For the budget year beginning July 1, 2021, the department of management shall, following the determination of the total amount of state foundation aid payable to each school district under section 257.16, subsection 1, and notwithstanding the minimum foundation aid provisions in section 257.1, subsection 2, reduce the total amount of regular program state foundation aid payable to each school district by an amount equal to the school district’s budget enrollment multiplied by fifty percent of the state average transportation costs per pupil, as calculated in section 257.31, subsection 17.
   e.  For the budget year beginning July 1, 2022, the department of management shall, following the determination of the total amount of state foundation aid payable to each school district under section 257.16, subsection 1, and notwithstanding the minimum foundation aid provisions in section 257.1, subsection 2, reduce the total amount of regular program state foundation aid payable to each school district by an amount equal to the school district’s budget enrollment multiplied by sixty-two and one-half percent of the state average transportation costs per pupil, as calculated in section 257.31, subsection 17.
   f.  For the budget year beginning July 1, 2023, the department of management shall, following the determination of the total amount of state foundation aid payable to each school district under section 257.16, subsection 1, and notwithstanding the minimum foundation aid provisions in section 257.1, subsection 2, reduce the total amount of regular program state foundation aid payable to each school district by an amount equal to the school district’s budget enrollment multiplied by seventy-five percent of the state average transportation costs per pupil, as calculated in section 257.31, subsection 17.
   g.  For the budget year beginning July 1, 2024, the department of management shall, following the determination of the total amount of state foundation aid payable to each school district under section 257.16, subsection 1, and notwithstanding the minimum foundation aid provisions in section 257.1, subsection 2, reduce the total amount of regular program state foundation aid payable to each school district by an amount equal to the school district’s budget enrollment multiplied by eighty-seven and one-half percent of the state average transportation costs per pupil, as calculated in section 257.31, subsection 17.
   h.  For the budget year beginning July 1, 2025, and each succeeding budget year, the department of management shall, following the determination of the total amount of state foundation aid payable to each school district under section 257.16, subsection 1, and notwithstanding the minimum foundation aid provisions in section 257.1, subsection 2, reduce the total amount of regular program state foundation aid payable to each school district by an amount equal to the school district’s budget enrollment multiplied by the state average transportation costs per pupil, as calculated in section 257.31, subsection 17.
   2.  The department of management shall annually notify each school district of the amount of the adjustment in regular program state foundation aid under this section. This section shall not result in the recalculation of other state aid amounts or the recalculation of any property tax levy rate for the budget year.
   3.  The department of education and the department of management shall adopt rules necessary to implement this section, including rules that prescribe all necessary reporting requirements for school districts.
    Sec. 3.  NEW SECTION.  257.17B  Transportation equity program —— fund —— appropriation.
   1.  A transportation equity program is established to provide prioritized funding for school districts with average transportation costs per pupil that exceed the statewide minimum transportation costs per pupil for the same budget year.
   2.  a.  For the budget year beginning July 1, 2018, and each succeeding budget year, the department of management shall annually determine a statewide adjusted transportation costs per pupil that is not lower than the statewide minimum transportation costs per pupil. The statewide adjusted transportation costs per pupil shall be annually determined, by taking into account amounts appropriated under subsection 3, for the purpose of providing transportation equity aid for those school districts with the highest transportation costs per pupil differential.
   b.  Each school district that satisfies the criteria of subsection 1 shall receive transportation equity aid in an amount equal to the school district’s budget enrollment multiplied by the difference between the school district’s transportation costs per pupil for the budget year and the statewide adjusted transportation costs per pupil for the budget year.
   c.  For purposes of this section:
   (1)  “Average transportation costs per pupil” means the same as calculated for districts under section 257.31, subsection 17.
   (2)  “Statewide minimum transportation costs per pupil” means the lowest district average transportation costs per pupil among all school districts in the state.
   (3)  “Transportation costs per pupil differential” means the difference between a district’s average transportation costs per pupil and the statewide minimum transportation costs per pupil for the same budget year.
   3.  a.  A transportation equity fund is created as a separate and distinct fund in the state treasury under the control of the department of management. Moneys in the fund include revenues credited to the fund, appropriations made to the fund, and other moneys deposited in the fund. For each fiscal year beginning on or after July 1, 2018, there is appropriated all moneys in the fund to the department of management for purposes of making transportation equity aid payments under this section, as calculated under subsection 2, and transportation base funding payments under subsection 4.
   b.  (1)  For the budget year beginning July 1, 2018, there is appropriated from the general fund of the state to the department of management to be credited to the transportation equity fund, an amount equal to twelve and one-half percent of the amount of total actual costs for all children transported in all districts used to calculate the state average transportation costs per pupil under section 257.31, subsection 17.
   (2)  For the budget year beginning July 1, 2019, there is appropriated from the general fund of the state to the department of management to be credited to the transportation equity fund, an amount equal to twenty-five percent of the amount of total actual costs for all children transported in all districts used to calculate the state average transportation costs per pupil under section 257.31, subsection 17. 
   (3)  For the budget year beginning July 1, 2020, there is appropriated from the general fund of the state to the department of management to be credited to the transportation equity fund, an amount equal to thirty-seven and one-half percent of the amount of total actual costs for all children transported in all districts used to calculate the state average transportation costs per pupil under section 257.31, subsection 17. 
   (4)  For the budget year beginning July 1, 2021, there is appropriated from the general fund of the state to the department of management to be credited to the transportation equity fund, an amount equal to fifty percent of the amount of total actual costs for all children transported in all districts used to calculate the state average transportation costs per pupil under section 257.31, subsection 17.
   (5)  For the budget year beginning July 1, 2022, there is appropriated from the general fund of the state to the department of management to be credited to the transportation equity fund, an amount equal to sixty-two and one-half percent of the amount of total actual costs for all children transported in all districts used to calculate the state average transportation costs per pupil under section 257.31, subsection 17.
   (6)  For the budget year beginning July 1, 2023, there is appropriated from the general fund of the state to the department of management to be credited to the transportation equity fund, an amount equal to seventy-five percent of the amount of total actual costs for all children transported in all districts used to calculate the state average transportation costs per pupil under section 257.31, subsection 17.
   (7)  For the budget year beginning July 1, 2024, there is appropriated from the general fund of the state to the department of management to be credited to the transportation equity fund, an amount equal to eighty-seven and one-half percent of the amount of total actual costs for all children transported in all districts used to calculate the state average transportation costs per pupil under section 257.31, subsection 17.
   (8)  For the budget year beginning July 1, 2025, and each succeeding budget year, there is appropriated from the general fund of the state to the department of management to be credited to the transportation equity fund, an amount equal to the amount of total actual costs for all children transported in all districts used to calculate the state average transportation costs per pupil under section 257.31, subsection 17.
   c.  (1)  If the balance of the fund exceeds the amount necessary to make all transportation equity aid payments under subsection 2, moneys remaining in the fund shall be used for transportation base funding payments under subsection 4.
   (2)  If the balance of the fund exceeds the amount necessary to make all transportation equity aid payments under subsection 2, and all transportation base funding payments under subsection 4, moneys remaining in the fund at the end of a fiscal year shall revert to the general fund of the state as provided under section 8.33.
   4.  For budget years beginning on or after July 1, 2018, if funding is available as provided in subsection 3, paragraph “c”, subparagraph (1), each school district in the state shall receive a transportation base funding payment in an amount equal to the school district’s budget enrollment multiplied by the statewide minimum transportation costs per pupil for the budget year. If an amount appropriated for a budget year is insufficient to pay all transportation base funding payments, the department of management shall prorate such payment amounts.
   5.  Transportation equity aid payments and transportation base funding payments shall be paid by the department at the same time and in the same manner as foundation aid is paid under section 257.16.
   6.  Transportation equity aid payments and transportation base funding payments received under this section are miscellaneous income and shall be deposited in the general fund of the school district. Transportation equity aid and transportation base funding payments under this section shall not affect the receipt of transportation assistance aid received under section 257.31, subsection 17.
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 school funding by establishing a transportation equity program and requiring adjustments to regular program state foundation aid amounts payable to school districts.
   Under the bill, for budget years beginning on or after July 1, 2018, the department of management is required to reduce the total amount of regular program state foundation aid payable to each school district under the school foundation funding formula. The amount of the reductions are phased in over eight budget years. The amount of the reduction is equal to the school district’s budget enrollment multiplied by a specified percentage of the state average transportation costs per pupil. For the budget year beginning July 1, 2018, the percentage is 12.5 percent. For the budget year beginning July 1, 2019, the percentage is 25 percent. For the budget year beginning July 1, 2020, the percentage is 37.5 percent. For the budget year beginning July 1, 2021, the percentage is 50 percent. For the budget year beginning July 1, 2022, the percentage is 62.5 percent. For the budget year beginning July 1, 2023, the percentage is 75 percent. For the budget year beginning July 1, 2024, the percentage is 87.5 percent. For the budget year beginning July 1, 2025, and each succeeding budget year, the percentage is 100 percent.
   The department of management is required to notify each school district annually of the amount of the reduction to regular program state foundation aid. The bill does not permit the recalculation of other state aid amounts or the recalculation of any property tax levy rate for the budget year following the adjustments imposed under the bill.
   The bill also establishes a transportation equity program to provide prioritized funding for school districts with average transportation costs per pupil that exceed the statewide minimum transportation costs per pupil. For the budget year beginning July 1, 2018, and each succeeding budget year, the department of management is required to determine a statewide adjusted transportation costs per pupil that is not lower than the statewide minimum transportation costs per pupil. The statewide adjusted transportation costs per pupil shall be annually determined for the purpose of providing transportation equity aid for those school districts with the highest transportation costs per pupil differentials. Each qualified school district receives transportation equity aid in an amount equal to the school district’s budget enrollment multiplied by the difference between the school district’s transportation costs per pupil and the statewide adjusted transportation costs per pupil, as those terms are defined in the bill.
   The bill creates a transportation equity fund under the control of the department of management. For the budget year beginning July 1, 2018, the appropriation is equal to 12.5 percent of the amount of total actual costs for all children transported in all districts used to calculate the state average transportation costs per pupil. For the budget year beginning July 1, 2019, the appropriation is equal to 25 percent of the amount of total actual costs for all children transported in all districts used to calculate the state average transportation costs per pupil. For the budget year beginning July 1, 2020, the appropriation is equal to 37.5 percent of the amount of total actual costs for all children transported in all districts used to calculate the state average transportation costs per pupil. For the budget year beginning July 1, 2021, the appropriation is equal to 50 percent of the amount of total actual costs for all children transported in all districts used to calculate the state average transportation costs per pupil. For the budget year beginning July 1, 2022, the appropriation is equal to 62.5 percent of the amount of total actual costs for all children transported in all districts used to calculate the state average transportation costs per pupil. For the budget year beginning July 1, 2023, the appropriation is equal to 75 percent of the amount of total actual costs for all children transported in all districts used to calculate the state average transportation costs per pupil. For the budget year beginning July 1, 2024, the appropriation is equal to 87.5 percent of the amount of total actual costs for all children transported in all districts used to calculate the state average transportation costs per pupil. For the budget year beginning July 1, 2025, and each budget year thereafter, the appropriation is equal to the amount of total actual costs for all children transported in all districts used to calculate the state average transportation costs per pupil. The bill appropriates moneys in the fund to the department of management for purposes of making transportation equity aid payments and, if sufficient moneys are available in the fund, transportation base funding payments.
   For budget years beginning on or after July 1, 2018, if funding is available in the transportation equity fund, each school district in the state receives a transportation base funding payment in an amount equal to the school district’s budget enrollment multiplied by the statewide minimum transportation costs per pupil. If an amount appropriated for a budget year is insufficient to pay all transportation base funding payments, the department of management is required to prorate such payment amounts. 
   Transportation equity aid payments and transportation base funding payments received under the bill are miscellaneous income and must be deposited in the general fund of the school district. Transportation equity aid and transportation base funding payments under this section do not affect the receipt or amount of transportation assistance aid received by a school district from the school budget review committee under Code section 257.31(17), for transportation costs.