House File 438 - Introduced HOUSE FILE 438 BY COMMITTEE ON EDUCATION (SUCCESSOR TO HSB 183) A BILL FOR An Act relating to public school funding by establishing the 1 state percent of growth and the categorical state percent of 2 growth for the budget year beginning July 1, 2021, modifying 3 provisions relating to the regular program state cost per 4 pupil, and modifying provisions relating to the property 5 tax replacement payment, and including effective date 6 provisions. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 8 TLSB 2433HV (1) 89 md/jh

H.F. 438 Section 1. Section 257.8, subsections 1 and 2, Code 2021, 1 are amended to read as follows: 2 1. State percent of growth. The state percent of growth 3 for the budget year beginning July 1, 2018, is one percent. 4 The state percent of growth for the budget year beginning 5 July 1, 2019, is two and six hundredths percent. The state 6 percent of growth for the budget year beginning July 1, 7 2020, is two and three-tenths percent. The state percent of 8 growth for the budget year beginning July 1, 2021, is two 9 and one-half percent. The state percent of growth for each 10 subsequent budget year shall be established by statute which 11 shall be enacted within thirty days of the transmission of the 12 governor’s budget required by February 1 under section 8.21 13 during the regular legislative session beginning in the base 14 year. 15 2. Categorical state percent of growth. The categorical 16 state percent of growth for the budget year beginning July 17 1, 2018, is one percent. The categorical state percent of 18 growth for the budget year beginning July 1, 2019, is two 19 and six hundredths percent. The categorical state percent 20 of growth for the budget year beginning July 1, 2020, is two 21 and three-tenths percent. The categorical state percent of 22 growth for the budget year beginning July 1, 2021, is two and 23 one-half percent. The categorical state percent of growth 24 for each budget year shall be established by statute which 25 shall be enacted within thirty days of the transmission of the 26 governor’s budget required by February 1 under section 8.21 27 during the regular legislative session beginning in the base 28 year. The categorical state percent of growth may include 29 state percents of growth for the teacher salary supplement, the 30 professional development supplement, the early intervention 31 supplement, the teacher leadership supplement, and for budget 32 years beginning on or after July 1, 2020, transportation equity 33 aid payments under section 257.16C . 34 Sec. 2. Section 257.9, subsection 2, Code 2021, is amended 35 -1- LSB 2433HV (1) 89 md/jh 1/ 6

H.F. 438 to read as follows: 1 2. Regular program state cost per pupil for 1992-1993 and 2 succeeding years. 3 a. For the budget year beginning July 1, 1992, and 4 succeeding budget years beginning before July 1, 2018, the 5 regular program state cost per pupil for a budget year is the 6 regular program state cost per pupil for the base year plus the 7 regular program supplemental state aid for the budget year. 8 b. For the budget year beginning July 1, 2018, the regular 9 program state cost per pupil is the regular program state 10 cost per pupil for the base year plus the regular program 11 supplemental state aid for the budget year, plus five dollars. 12 c. For the budget year beginning July 1, 2019, the regular 13 program state cost per pupil is the regular program state 14 cost per pupil for the base year plus the regular program 15 supplemental state aid for the budget year, plus five dollars. 16 d. For the budget year beginning July 1, 2020, the regular 17 program state cost per pupil is the regular program state 18 cost per pupil for the base year plus the regular program 19 supplemental state aid for the budget year, plus ten dollars. 20 e. For the budget year beginning July 1, 2021, the regular 21 program state cost per pupil is the regular program state 22 cost per pupil for the base year plus the regular program 23 supplemental state aid for the budget year, plus ten dollars. 24 e. f. For the budget year beginning July 1, 2021 2022 , and 25 succeeding budget years, the regular program state cost per 26 pupil for a budget year is the regular program state cost per 27 pupil for the base year plus the regular program supplemental 28 state aid for the budget year. 29 Sec. 3. Section 257.16B, subsections 1 and 2, Code 2021, are 30 amended to read as follows: 31 1. For each fiscal year beginning on or after July 1, 2018 32 2019 , there is appropriated from the general fund of the state 33 to the department of education an amount necessary to make all 34 school district property tax replacement payments under this 35 -2- LSB 2433HV (1) 89 md/jh 2/ 6

H.F. 438 section , as calculated in subsection 2 . 1 2. a. For the budget year beginning July 1, 2018, the 2 department of management shall calculate for each school 3 district all of the following: 4 (1) The regular program state cost per pupil for the budget 5 year beginning July 1, 2012, multiplied by one hundred percent 6 less the regular program foundation base per pupil percentage 7 pursuant to section 257.1 . 8 (2) The regular program state cost per pupil for the budget 9 year beginning July 1, 2018, multiplied by one hundred percent 10 less the regular program foundation base per pupil percentage 11 pursuant to section 257.1 . 12 (3) The amount of each school district’s property tax 13 replacement payment. Each school district’s property tax 14 replacement payment equals the school district’s weighted 15 enrollment for the budget year beginning July 1, 2018, 16 multiplied by the remainder of the amount calculated for 17 the school district under subparagraph (2) minus the amount 18 calculated for the school district under subparagraph (1). 19 b. a. For the budget year beginning July 1, 2019, the 20 department of management shall calculate for each school 21 district all of the following: 22 (1) The regular program state cost per pupil for the budget 23 year beginning July 1, 2012, multiplied by one hundred percent 24 less the regular program foundation base per pupil percentage 25 pursuant to section 257.1 . 26 (2) The regular program state cost per pupil for the budget 27 year beginning July 1, 2019, multiplied by one hundred percent 28 less the regular program foundation base per pupil percentage 29 pursuant to section 257.1 . 30 (3) The amount of each school district’s property tax 31 replacement payment. Each school district’s property tax 32 replacement payment equals the school district’s weighted 33 enrollment for the budget year beginning July 1, 2019, 34 multiplied by the remainder of the amount calculated for 35 -3- LSB 2433HV (1) 89 md/jh 3/ 6

H.F. 438 the school district under subparagraph (2) minus the amount 1 calculated for the school district under subparagraph (1). 2 c. b. For each the budget year beginning on or after July 3 1, 2020, the department of management shall calculate for each 4 school district all of the following: 5 (1) The regular program state cost per pupil for the budget 6 year beginning July 1, 2012, multiplied by one hundred percent 7 less the regular program foundation base per pupil percentage 8 pursuant to section 257.1 . 9 (2) The regular program state cost per pupil for the budget 10 year beginning July 1, 2020, multiplied by one hundred percent 11 less the regular program foundation base per pupil percentage 12 pursuant to section 257.1 . 13 (3) The amount of each school district’s property tax 14 replacement payment. Each school district’s property tax 15 replacement payment equals the school district’s weighted 16 enrollment for the budget year beginning July 1, 2020, 17 multiplied by the remainder of the amount calculated for 18 the school district under subparagraph (2) minus the amount 19 calculated for the school district under subparagraph (1). 20 c. For each budget year beginning on or after July 1, 2021, 21 the department of management shall calculate for each school 22 district all of the following: 23 (1) The regular program state cost per pupil for the budget 24 year beginning July 1, 2012, multiplied by one hundred percent 25 less the regular program foundation base per pupil percentage 26 pursuant to section 257.1. 27 (2) The regular program state cost per pupil for the budget 28 year beginning July 1, 2021, multiplied by one hundred percent 29 less the regular program foundation base per pupil percentage 30 pursuant to section 257.1. 31 (3) The amount of each school district’s property tax 32 replacement payment. Each school district’s property tax 33 replacement payment equals the school district’s weighted 34 enrollment for the budget year multiplied by the remainder 35 -4- LSB 2433HV (1) 89 md/jh 4/ 6

H.F. 438 of the amount calculated for the school district under 1 subparagraph (2) minus the amount calculated for the school 2 district under subparagraph (1). 3 Sec. 4. EFFECTIVE DATE. This Act, being deemed of immediate 4 importance, takes effect upon enactment. 5 EXPLANATION 6 The inclusion of this explanation does not constitute agreement with 7 the explanation’s substance by the members of the general assembly. 8 This bill relates to public school funding by establishing 9 the state percent of growth and the categorical state percent 10 of growth for the budget year beginning July 1, 2021, modifying 11 provisions relating to the regular program state cost per 12 pupil, and modifying provisions and references relating to the 13 property tax replacement payment. 14 The bill establishes a state percent of growth of 2.5 percent 15 for the budget year beginning July 1, 2021. The state percent 16 of growth is used to calculate the amount of supplemental state 17 aid for a budget year as part of the state school foundation 18 program. The bill also establishes a categorical state percent 19 of growth of 2.5 percent for the budget year beginning July 20 1, 2021. The categorical state percent of growth is used to 21 calculate the amount of supplemental state aid for each of the 22 categorical funding supplements. 23 Current Code section 257.9 provides that for the budget 24 year beginning July 1, 2021, and succeeding budget years, the 25 regular program state cost per pupil for a budget year is the 26 regular program state cost per pupil for the base year, which 27 includes the $10 addition made for the budget year beginning 28 July 1, 2020, plus the regular program supplemental state aid 29 for the budget year. 30 Under the bill, for the budget year beginning July 1, 2021, 31 the regular program state cost per pupil is the regular program 32 state cost per pupil for the base year plus the regular program 33 supplemental state aid for the budget year, plus $10. Then 34 with the budget year beginning July 1, 2022, and succeeding 35 -5- LSB 2433HV (1) 89 md/jh 5/ 6

H.F. 438 budget years, the regular program state cost per pupil will 1 again be calculated as the regular program state cost per pupil 2 for the base year plus the regular program supplemental state 3 aid for the budget year. 4 Code section 257.16B provides for school district property 5 tax replacement payments. Under current law, for each budget 6 year beginning on or after July 1, 2020, each school district’s 7 property tax replacement payment amount is equal to the school 8 district’s weighted enrollment for the budget year multiplied 9 by the difference of the following: (1) the regular program 10 state cost per pupil for the budget year beginning July 1, 11 2020, multiplied by 100 percent less the regular program 12 foundation base per pupil percentage; and (2) the regular 13 program state cost per pupil for the budget year beginning July 14 1, 2012, multiplied by 100 percent less the regular program 15 foundation base per pupil percentage. The regular program 16 foundation base per pupil percentage is 87.5 percent. 17 The bill modifies the property tax replacement payment 18 calculation for budget years beginning on or after July 1, 19 2021. For budget years beginning on or after July 1, 2021, 20 each school district’s property tax replacement payment amount 21 is equal to the school district’s weighted enrollment for the 22 applicable budget year multiplied by the difference of the 23 following: (1) the regular program state cost per pupil for 24 the budget year beginning July 1, 2021, multiplied by 100 25 percent less the regular program foundation base per pupil 26 percentage; and (2) the regular program state cost per pupil 27 for the budget year beginning July 1, 2012, multiplied by 100 28 percent less the regular program foundation base per pupil 29 percentage. 30 The bill takes effect upon enactment. 31 -6- LSB 2433HV (1) 89 md/jh 6/ 6