S.F. _____ Section 1. Section 260C.18C, Code 2024, is amended to read 1 as follows: 2 260C.18C State aid distribution formula. 3 1. Purpose. A distribution plan for general state financial 4 aid to Iowa’s community colleges is established for the fiscal 5 year commencing July 1, 2005, and succeeding fiscal years. 6 Funds appropriated by the general assembly to the department 7 for general financial aid to community colleges shall be 8 allocated to each community college in the manner provided 9 under this section . 10 2. Definitions. As used in this section and section 11 260C.18D , unless the context otherwise requires: 12 a. “Base funding allocation” means the amount of general 13 state financial aid all community colleges received in the base 14 year. 15 b. “Base year” means the fiscal year immediately preceding 16 the budget year. 17 c. “Below-average support per FTEE” for a community college 18 means the state-average combined support per FTEE minus the 19 combined support per FTEE for the community college if the 20 community college’s combined support per FTEE is less than the 21 state-average combined support per FTEE. 22 d. c. “Budget year” means the fiscal year for which moneys 23 are appropriated by the general assembly. 24 e. “Combined support” for a community college means the 25 total amount of moneys the community college received in 26 general state financial aid in the base year plus the community 27 college’s general fund property tax revenue, including utility 28 replacement, for the base year. 29 f. “Combined support per FTEE” for a community college 30 means the community college’s combined support divided by its 31 three-year rolling average full-time equivalent enrollment for 32 the three years prior to the base year. 33 g. “Contact hour” for a noncredit course equals fifty 34 minutes of contact between an instructor and students in a 35 -1- LSB 5661XC (5) 90 jda/jh 1/ 10

S.F. _____ scheduled course offering for which students are registered. 1 h. “Credit hour” , for purposes of community college funding 2 distribution, shall be as defined by the department by rule. 3 i. “Eligible credit courses” means all credit courses that 4 are eligible for general state financial aid which are part 5 of a department-approved program of study. The department 6 shall review and provide a determination should a question of 7 eligibility occur. 8 j. “Eligible growth support” for a community college is the 9 community college’s below-average support per FTEE multiplied 10 times its three-year rolling average full-time equivalent 11 enrollment. 12 k. “Eligible noncredit courses” means all noncredit courses 13 eligible for general state financial aid which fall under one 14 of the eligible categories for noncredit courses as defined 15 by rule of the department. The department shall review and 16 provide a determination should a question of eligibility occur. 17 l. “Eligible student” means a student enrolled in eligible 18 credit or eligible noncredit courses. The department shall 19 review and provide a determination should a question of 20 eligibility occur. 21 m. d. “Fiscal year” means the period of twelve months 22 beginning on July 1 and ending on June 30. 23 n. One “full-time equivalent enrollment (FTEE)” equals 24 twenty-four credit hours for credit courses or six hundred 25 contact hours for noncredit courses generated by all eligible 26 students enrolled in eligible courses. 27 o. “General fund property tax revenue” means the amount of 28 moneys a community college raised or could have raised from 29 a property tax of twenty and one-fourth cents per thousand 30 dollars of assessed valuation on all taxable property in its 31 merged area collected for the base year. 32 p. e. “General state financial aid” means the amount of 33 general state financial aid the community college received from 34 the general fund. 35 -2- LSB 5661XC (5) 90 jda/jh 2/ 10

S.F. _____ q. “Inflation adjustment amount” means the inflation rate 1 minus two percentage points multiplied times the base funding 2 allocation. The inflation adjustment amount shall not be less 3 than zero. 4 r. “Inflation rate” means the average of the preceding 5 twelve-month percentage change, which shall be computed on 6 a monthly basis, in the consumer price index for all urban 7 consumers, not seasonally adjusted, published by the United 8 States department of labor, bureau of labor statistics, 9 calculated for the calendar year ending six months after the 10 beginning of the base year. 11 f. “Presidents council” means a council that is convened 12 by the Iowa association of community college trustees that is 13 made up of the presidents of the community colleges and the 14 chancellors of the community colleges who serve as the chief 15 executive officers of such community colleges. 16 s. “State-average combined support per FTEE” means the 17 average of the combined support per FTEE for all community 18 colleges in the state in the base year. 19 t. “Three-year rolling average full-time equivalent 20 enrollment” means the average of the audited full-time 21 equivalent enrollment for a community college over the three 22 fiscal years prior to the base year as determined by the 23 department. 24 u. “Total growth support amount” means the sum of the 25 eligible growth support for all the community colleges. 26 3. Distribution formula. Moneys appropriated by the general 27 assembly from the general fund to the department for community 28 college purposes for general state financial aid for a budget 29 year shall be allocated to each community college by the 30 department as follows: 31 a. If the inflation rate is equal to two percent or less: 32 (1) Base funding allocation. The moneys shall first 33 be allocated in the amount of general state financial aid 34 each community college received in the base year. If the 35 -3- LSB 5661XC (5) 90 jda/jh 3/ 10

S.F. _____ appropriation is less than the total of the amount of general 1 state financial aid each community college received in the base 2 year, the moneys shall be allocated in the same proportion as 3 the allocation of general state financial aid each community 4 college received in the base year. 5 (2) Marginal cost adjustment. After the base funding has 6 been allocated, each community college shall be allocated up to 7 an additional two percent of its base funding allocation. The 8 community college’s allocation shall be in the same proportion 9 as the allocation of general state financial aid each community 10 college received in the base year. 11 (3) Three-year rolling average of full-time equivalent 12 enrollment. If the increase in the total state general aid 13 exceeds two percent over the base funding allocation, an amount 14 up to an additional one percent of the base funding allocation 15 shall be distributed based upon each community college’s 16 proportional share of the three-year rolling average full-time 17 equivalent enrollments for all community colleges. 18 (4) Extraordinary growth adjustment. If the increase in 19 total state general aid exceeds three percent over the base 20 funding allocation, an amount up to an additional one percent 21 of the base funding allocation shall be distributed as follows: 22 (a) Forty percent of the moneys shall be allocated based 23 upon each community college’s proportional share of the 24 three-year rolling average full-time equivalent enrollments for 25 all community colleges. 26 (b) Sixty percent of the moneys shall be allocated to 27 community colleges that have eligible growth support. The 28 allocation shall be based upon the proportional share that each 29 community college’s eligible growth support bears to the total 30 growth support amount. Once the moneys allocated under this 31 subparagraph division equal the total growth support amount, 32 the remaining moneys allocated under this subparagraph shall be 33 allocated as provided in subparagraph division (a). 34 (5) Additional three-year rolling average FTEE 35 -4- LSB 5661XC (5) 90 jda/jh 4/ 10

S.F. _____ allocation. If the increase in total state general aid 1 exceeds four percent over the base funding allocation, 2 all remaining moneys shall be distributed based upon each 3 college’s proportional share of the three-year rolling average 4 full-time equivalent enrollments for all community colleges 5 The presidents council shall annually, on or before October 31 6 of each year, establish the distribution formula for general 7 state aid to the community colleges for the succeeding budget 8 year . When determining the distribution formula pursuant to 9 this paragraph, the goal of the presidents council shall be 10 to provide the highest quality educational opportunities and 11 services, as described in section 260C.1, to the greatest 12 number of students. The distribution formula requires the 13 approval of at least ten members of the presidents council. 14 The department shall implement the distribution formula 15 approved by the presidents council. 16 b. If the inflation rate is greater than two percent but 17 less than four percent: 18 (1) Base funding allocation. The moneys shall first 19 be allocated in the amount of general state financial aid 20 each community college received in the base year. If the 21 appropriation is less than the total of the amount of general 22 state financial aid each community college received in the base 23 year, the moneys shall be allocated in the same proportion as 24 the allocation of general state financial aid each community 25 college received in the base year. 26 (2) Marginal cost adjustment. After the base funding has 27 been allocated, each community college shall be allocated up to 28 an additional two percent of its base funding allocation. The 29 community college’s allocation shall be in the same proportion 30 as the allocation of general state financial aid each community 31 college received in the base year. 32 (3) Three-year rolling average of full-time equivalent 33 enrollment. If the increase in the total state general aid 34 exceeds two percent over the base funding allocation, an amount 35 -5- LSB 5661XC (5) 90 jda/jh 5/ 10

S.F. _____ up to an additional one percent of the base funding allocation 1 shall be distributed based upon each community college’s 2 proportional share of the three-year rolling average full-time 3 equivalent enrollments for all community colleges. 4 (4) Extraordinary growth adjustment. If the increase in 5 total state general aid exceeds three percent over the base 6 funding allocation, an amount up to an additional one percent 7 of the base funding allocation shall be based as follows: 8 (a) Forty percent of the moneys shall be allocated based 9 upon each community college’s proportional share of the 10 three-year rolling average full-time equivalent enrollments for 11 all community colleges. 12 (b) Sixty percent of the moneys shall be allocated to 13 community colleges that have eligible growth support. The 14 allocation shall be based upon the proportional share that each 15 community college’s eligible growth support bears to the total 16 growth support amount. Once the moneys allocated under this 17 subparagraph division equal the total growth support amount, 18 the remaining moneys allocated under this subparagraph shall be 19 allocated as provided in subparagraph division (a). 20 (5) Inflation adjustment. If the increase in total 21 state general aid exceeds four percent over the base funding 22 allocation, an amount up to the inflation adjustment amount 23 shall be distributed to each community college in the same 24 proportion as the allocation of general state financial aid 25 each community college received in the base year. 26 (6) Additional three-year rolling average FTEE 27 allocation. If there are remaining moneys to be distributed 28 under this paragraph after distributing moneys under 29 subparagraph (5), all remaining moneys shall be distributed 30 based upon each community college’s proportional share of the 31 three-year rolling average full-time equivalent enrollments 32 for all community colleges If the presidents council fails 33 to approve a distribution formula on or before October 31 34 pursuant to paragraph “a” , the department shall establish the 35 -6- LSB 5661XC (5) 90 jda/jh 6/ 10

S.F. _____ distribution formula for general state aid to the community 1 colleges for the succeeding budget year . When determining 2 the distribution formula pursuant to this paragraph, the goal 3 of the department shall be to provide the highest quality 4 educational opportunities and services, as described in section 5 260C.1, to the greatest number of students. 6 c. If the inflation rate equals or exceeds four percent: 7 (1) Base funding allocation. The moneys shall first 8 be allocated in the amount of general state financial aid 9 each community college received in the base year. If the 10 appropriation is less than the total of the amount of general 11 state financial aid each community college received in the base 12 year, the moneys shall be allocated in the same proportion as 13 the allocation of general state financial aid each community 14 college received in the base year. 15 (2) Marginal cost adjustment. After the base funding has 16 been allocated, each community college shall be allocated up to 17 an additional two percent of its base funding allocation. The 18 community college’s allocation shall be in the same proportion 19 as the allocation of general state financial aid each community 20 college received in the base year. 21 (3) Three-year rolling average of full-time equivalent 22 enrollment. If the increase in the total state general aid 23 exceeds two percent over the base funding allocation, an amount 24 up to an additional one percent of the base funding allocation 25 shall be distributed based upon each community college’s 26 proportional share of the three-year rolling average full-time 27 equivalent enrollments for all community colleges. 28 (4) Inflation adjustment. If the increase in total state 29 general aid exceeds three percent over the base funding 30 allocation, an amount up to the inflation adjustment amount 31 shall be distributed to each community college in the same 32 proportion as the allocation of general state financial aid 33 each community college received in the base year. 34 (5) Extraordinary growth adjustment. If there are 35 -7- LSB 5661XC (5) 90 jda/jh 7/ 10

S.F. _____ remaining moneys to be distributed under this paragraph after 1 distributing moneys under subparagraph (4), an amount up to an 2 additional one percent of the base funding allocation shall be 3 based as follows: 4 (a) Forty percent of the moneys shall be allocated based 5 upon each community college’s proportional share of the 6 three-year rolling average full-time equivalent enrollments for 7 all community colleges. 8 (b) Sixty percent of the moneys shall be allocated to 9 community colleges that have eligible growth support. The 10 allocation shall be based upon the proportional share that each 11 community college’s eligible growth support bears to the total 12 growth support amount. Once the moneys allocated under this 13 subparagraph division equal the total growth support amount, 14 the remaining moneys allocated under this subparagraph shall be 15 allocated as provided in subparagraph division (a). 16 (6) Additional three-year rolling average FTEE 17 allocation. If there are remaining moneys to be distributed 18 under this paragraph after distributing moneys under 19 subparagraph (5), all remaining moneys shall be distributed 20 based upon each community college’s proportional share of the 21 three-year rolling average full-time equivalent enrollments for 22 all community colleges. 23 4. Information supplied by colleges and adoption of rules. 24 a. Each community college shall provide information in 25 the manner and form as determined by the department. If 26 a community college fails to provide the information as 27 requested, the department shall estimate the full-time 28 equivalent enrollment of that college. 29 b. Each community college shall complete and submit an 30 annual student enrollment audit to the department. Adjustments 31 to community college state general aid allocations shall be 32 made based on student enrollment audit outcomes. 33 c. The department shall adopt rules under chapter 17A as 34 necessary for the allocation of general state financial aid. 35 -8- LSB 5661XC (5) 90 jda/jh 8/ 10

S.F. _____ Sec. 2. APPLICABILITY. This Act applies to budget years 1 beginning on or after July 1, 2025. 2 EXPLANATION 3 The inclusion of this explanation does not constitute agreement with 4 the explanation’s substance by the members of the general assembly. 5 This bill modifies provisions related to the distribution 6 formula for general state financial aid to community colleges. 7 Current Code section 260C.18C establishes a distribution 8 formula for the allocation of state moneys appropriated 9 annually by the general assembly to the department of education 10 for distribution to each community college. The distribution 11 formula includes a base funding allocation, a marginal 12 cost adjustment, a three-year rolling average of full-time 13 equivalent enrollment, an extraordinary growth adjustment, and 14 other allocations. 15 The bill defines “presidents council” as a council that is 16 convened by the Iowa association of community college trustees 17 that is made up of the presidents of the community colleges 18 and the chancellors of the community colleges who serve as 19 the chief executive officers of such community colleges. The 20 bill modifies Code section 260C.18C to provide that moneys 21 appropriated by the general assembly from the general fund of 22 the state to the department for community college purposes 23 for general state financial aid for a budget year shall 24 be allocated to each community college by the department 25 pursuant to the terms of a distribution formula approved by the 26 presidents council. The bill requires the presidents council 27 to annually, on or before October 31 of each year, establish 28 such distribution formula for the succeeding budget year. The 29 bill establishes goals the presidents council is to consider 30 when determining the distribution formula. The bill provides 31 that the distribution formula requires the approval of at least 32 10 members of the presidents council. 33 If the presidents council fails to approve a distribution 34 formula, the bill requires the department to establish the 35 -9- LSB 5661XC (5) 90 jda/jh 9/ 10

S.F. _____ distribution formula for general state aid to the community 1 colleges for the succeeding budget year. 2 Current law provides that adjustments to community college 3 state general aid allocations are required to be made based on 4 the outcomes of audits of student enrollment. The bill strikes 5 this provision. 6 The bill applies to budget years beginning on or after July 7 1, 2025. 8 -10- LSB 5661XC (5) 90 jda/jh 10/ 10