H.F. 405 Section 1. Section 257.31, subsection 18, Code 2017, is 1 amended by striking the subsection and inserting in lieu 2 thereof the following: 3 18. The committee is authorized to recommend that the 4 department implement a phase II on-site visit to conduct a 5 fiscal review pursuant to section 256.11, subsection 10, 6 paragraph “b” , subparagraph (1), subparagraph division (e), as 7 follows: 8 a. If a school district exceeds its authorized budget 9 or carries a negative unspent balance for the most recently 10 completed budget year and for the budget year preceding that 11 budget year and the school district is not eligible for a phase 12 II on-site visit recommendation to conduct a fiscal review 13 under another paragraph of this subsection, the committee 14 may, but is not required to, recommend that the department 15 conduct such a phase II on-site visit. However, if the school 16 district’s unspent balance for the most recently completed 17 budget year is greater than the difference of three-halves of 18 the unspent balance for the budget year preceding the most 19 recently completed budget year minus three-fifths of the 20 unspent balance for the budget year two years preceding the 21 most recently completed budget year, the committee shall not 22 recommend that the department conduct a phase II on-site visit. 23 b. If a school district exceeds its authorized budget 24 or carries a negative unspent balance for the most recently 25 completed budget year and for each of the two budget years 26 preceding that budget year and the school district is not 27 eligible for a phase II on-site visit recommendation to 28 conduct a fiscal review under another paragraph of this 29 subsection, the committee may, but is not required to, 30 recommend that the department conduct such a phase II on-site 31 visit. However, if the school district’s unspent balance 32 for the most recently completed budget year is greater than 33 the difference of four-thirds of the unspent balance for the 34 budget year preceding the most recently completed budget year 35 -1- LSB 2325YH (3) 87 md/sc 1/ 3

H.F. 405 minus one-half of the unspent balance for the budget year two 1 years preceding the most recently completed budget year, the 2 committee shall not recommend that the department conduct a 3 phase II on-site visit. 4 c. If a school district exceeds its authorized budget 5 or carries a negative unspent balance for the most recently 6 completed budget year and for each of the three budget years 7 preceding that budget year and the school district is not 8 eligible for a phase II on-site visit recommendation to 9 conduct a fiscal review under another paragraph of this 10 subsection, the committee may, but is not required to, 11 recommend that the department conduct such a phase II on-site 12 visit. However, if the school district’s unspent balance 13 for the most recently completed budget year is greater than 14 the difference of four-thirds of the unspent balance for the 15 budget year preceding the most recently completed budget year 16 minus one-half of the unspent balance for the budget year two 17 years preceding the most recently completed budget year, the 18 committee shall not recommend that the department conduct a 19 phase II on-site visit. 20 d. If a school district exceeds its authorized budget 21 or carries a negative unspent balance for the most recently 22 completed budget year and for each of the four budget years 23 preceding that budget year and the school district was not 24 recommended for a phase II on-site visit to conduct a fiscal 25 review under this subsection for the budget year preceding the 26 most recently completed budget year, the committee may, but is 27 not required to, recommend that the department conduct such a 28 phase II on-site visit. 29 EXPLANATION 30 The inclusion of this explanation does not constitute agreement with 31 the explanation’s substance by the members of the general assembly. 32 Current Code section 257.31(18) provides that if a school 33 district exceeds its authorized budget or carries a negative 34 unspent balance for two or more consecutive years, the school 35 -2- LSB 2325YH (3) 87 md/sc 2/ 3

H.F. 405 budget review committee may recommend that the department of 1 education implement a phase II on-site visit to conduct a 2 fiscal review pursuant to Code section 256.11(10). This bill 3 strikes current Code section 257.31(18), and enacts a different 4 methodology for the school budget review committee to utilize 5 when determining whether the committee is authorized to make 6 recommendations for the department of education to implement a 7 phase II on-site visit to conduct a fiscal review pursuant to 8 Code section 256.11(10). 9 -3- LSB 2325YH (3) 87 md/sc 3/ 3