H.F. 2358 Section 1. Section 256C.1, subsection 1, Code 2026, is 1 amended to read as follows: 2 1. “Approved local program” means a school district’s 3 program or community-based provider’s program for four-year-old 4 children approved by the department of education to provide 5 high quality high-quality preschool instruction. 6 Sec. 2. Section 256C.1, Code 2026, is amended by adding the 7 following new subsection: 8 NEW SUBSECTION . 1A. “ Community-based provider approved 9 to directly participate in the preschool program” means a 10 community-based provider that meets the community-based 11 provider requirements under section 256C.3 and has been 12 approved by the department to directly participate in the 13 preschool program. “Community-based provider approved to 14 directly participate in the preschool program” does not mean a 15 community-based provider that partners with a school district’s 16 approved local program. 17 Sec. 3. Section 256C.3, subsection 1, paragraph b, Code 18 2026, is amended to read as follows: 19 b. If space and funding are available, including funding 20 from another school district account or fund from which 21 preschool program expenditures are authorized by law, a school 22 district approved to participate in the preschool program or 23 community-based provider approved to directly participate in 24 the preschool program may enroll and pay the cost of attendance 25 for a younger or older child in the preschool program; however, 26 the child shall not be counted for state funding purposes. 27 Sec. 4. Section 256C.3, subsection 2, paragraph a, 28 subparagraph (1), Code 2026, is amended to read as follows: 29 (1) The individual is either employed by or under contract 30 with the school district , or with the community-based provider 31 approved to directly participate in the preschool program, that 32 is implementing the program. 33 Sec. 5. Section 256C.3, subsection 3, unnumbered paragraph 34 1, Code 2026, is amended to read as follows: 35 -1- LSB 5279HV (1) 91 jda/jh 1/ 10

H.F. 2358 The state board shall adopt rules to further define the 1 following preschool program requirements which shall be used 2 to determine whether or not a local program implemented by a 3 school district approved to implement the preschool program or 4 a community-based provider directly approved to implement the 5 preschool program qualifies as an approved local program: 6 Sec. 6. Section 256C.3, subsection 3, paragraph h, Code 7 2026, is amended to read as follows: 8 h. Provision for ensuring that children receiving care from 9 other child care arrangements can participate in the preschool 10 program with minimal disruption due to transportation and 11 movement from one site to another. The children participating 12 in the preschool program may be transported by the school 13 district or community provider to activities associated with 14 the program along with other children. 15 Sec. 7. Section 256C.3, Code 2026, is amended by adding the 16 following new subsection: 17 NEW SUBSECTION . 4A. Community-based provider 18 requirements. The state board shall adopt rules to further 19 define the following requirements of community-based providers 20 approved to directly participate in the preschool program in 21 implementing the preschool program: 22 a. Methods of demonstrating readiness to implement 23 high-quality instruction in the local program shall be 24 identified. 25 b. A community-based provider shall participate in data 26 collection and performance measurement processes and reporting 27 as defined by rule. 28 c. Professional development for community-based provider 29 preschool teachers shall be addressed in the community-based 30 provider’s professional development plan. 31 Sec. 8. Section 256C.3, subsection 5, paragraphs a, b, and 32 d, Code 2026, are amended to read as follows: 33 a. The department shall implement an application and 34 selection process for school district participation and 35 -2- LSB 5279HV (1) 91 jda/jh 2/ 10

H.F. 2358 community-based provider participation in the preschool program 1 that includes but is not limited to the enrollment requirements 2 provided under section 256C.4 . 3 b. The department shall track the progress of 4 students served by a school district preschool program or 5 community-based provider preschool program and the students’ 6 performance in elementary and secondary education. 7 d. The state board, in collaboration with the department, 8 shall ensure that the administrative rules adopted to support 9 the preschool program emphasize that children’s access to 10 the program is voluntary, that the preschool foundation aid 11 provided to a school district or a community-based provider is 12 provided based upon the enrollment of eligible students in the 13 school district’s or community-based provider’s local program 14 regardless of whether an eligible student is a resident of the 15 school district, and that agreements entered into by a school 16 district for the provision of programming in settings other 17 than the school district’s facilities are between the school 18 district and the private provider. 19 Sec. 9. Section 256C.4, subsection 1, Code 2026, is amended 20 to read as follows: 21 1. General State funding for school district approved to 22 participate in the preschool program . 23 a. State funding provided under the preschool program to 24 school districts shall be based upon the enrollment of eligible 25 students in the preschool programming provided by a school 26 district approved to participate in the preschool program. 27 b. A school district approved to participate in the 28 preschool program may authorize expenditures for the district’s 29 preschool programming from any of the revenue sources available 30 to the district from the sources listed in chapter 298A , 31 provided the expenditures are within the uses permitted for the 32 revenue source. In addition, the use of the revenue source 33 for preschool or prekindergarten programming must have been 34 approved prior to any expenditure from the revenue source for 35 -3- LSB 5279HV (1) 91 jda/jh 3/ 10

H.F. 2358 the district’s approved local program. 1 c. Funding provided under the preschool program is intended 2 to supplement, not supplant, existing public funding for 3 preschool programming. 4 d. Preschool foundation aid funding shall not be commingled 5 with the other state aid payments made under section 257.16 6 to a school district and shall be accounted for by the local 7 school district separately from the other state aid payments. 8 Preschool foundation aid payments made to school districts are 9 miscellaneous income for purposes of chapter 257 . A school 10 district shall maintain a separate listing within its budget 11 for preschool foundation aid payments received and expenditures 12 made. A school district shall certify to the department of 13 education that preschool foundation aid funding received by 14 the school district was used to supplement, not supplant, 15 moneys otherwise received and used by the school district for 16 preschool programming. 17 e. Preschool foundation aid funding shall not be used for 18 the costs of constructing a facility in connection with an 19 approved local program. Preschool foundation aid funding may 20 be used by approved local programs and community providers 21 for any purpose determined by the board of directors of the 22 school district to meet standards for high-quality preschool 23 instruction and for purposes that directly or indirectly 24 benefit students enrolled in the approved local program, 25 including but not limited to professional development for 26 preschool teachers, instructional equipment and supplies, 27 material and equipment designed to develop pupils’ large and 28 small motor skills, translation services, playground equipment 29 and repair costs, food and beverages used by children in the 30 approved local program, safety equipment, facility rental fees, 31 and for other direct costs that enhance the approved local 32 program, including by contracting with community partners for 33 any such services. Preschool foundation aid funding may be 34 used by approved local programs for the costs of transportation 35 -4- LSB 5279HV (1) 91 jda/jh 4/ 10

H.F. 2358 involving children participating in the preschool program. 1 The costs of transporting other children associated with the 2 preschool program or transported as provided in section 256C.3, 3 subsection 3 , paragraph “h” , may be prorated by the school 4 district. Preschool foundation aid funding received by an 5 approved local program that remains unexpended and unobligated 6 at the end of a fiscal year beginning on or after July 1, 2017, 7 shall be used to build the approved local program’s preschool 8 program capacity in the next succeeding fiscal year excluding 9 that portion of such unexpended and unobligated funding that 10 the school district authorizes for transfer for deposit in the 11 school district’s flexibility account established under section 12 298A.2, subsection 2 , if the statutory requirements for the use 13 of such funding are met. For purposes of determining whether a 14 school district has authority to transfer preschool foundation 15 aid funding for deposit in the school district’s flexibility 16 account established under section 298A.2, subsection 2 , the 17 school district must have provided preschool programming 18 during the fiscal year for which funding remains unexpended 19 and unobligated to all eligible students for whom a timely 20 application for enrollment was submitted. 21 f. The receipt of funding by a school district for the 22 purposes of this chapter , the need for additional funding 23 for the purposes of this chapter , or the enrollment count of 24 eligible students under this chapter shall not be considered 25 to be unusual circumstances, create an unusual need for 26 additional funds, or qualify under any other circumstances that 27 may be used by the school budget review committee to grant 28 supplemental aid to or establish a modified supplemental amount 29 for a school district under section 257.31 . 30 g. For the fiscal year beginning July 1, 2015, and each 31 succeeding fiscal year, of the amount of preschool foundation 32 aid received by a school district for a fiscal year in 33 accordance with section 257.16 , not more than five percent may 34 be used by the school district for administering the district’s 35 -5- LSB 5279HV (1) 91 jda/jh 5/ 10

H.F. 2358 approved local program. Outreach activities and rent for 1 facilities not owned by the school district are permissive uses 2 of the administrative funds. 3 h. For the fiscal year beginning July 1, 2015, and each 4 succeeding fiscal year, of the amount of preschool foundation 5 aid received by a school district for a fiscal year in 6 accordance with section 257.16 , not less than ninety-five 7 percent of the per pupil amount shall be passed through to 8 a community-based provider for each pupil enrolled in the 9 district’s approved local program. For the fiscal year 10 beginning July 1, 2015, and each succeeding fiscal year, not 11 more than ten percent of the amount of preschool foundation aid 12 passed through to a community-based provider may be used by the 13 community-based provider for administrative costs. The costs 14 of outreach activities and rent for facilities not owned by 15 the school district are permissive administrative costs. The 16 costs of transportation involving children participating in the 17 preschool program and other children may be prorated. 18 Sec. 10. Section 256C.4, Code 2026, is amended by adding the 19 following new subsection: 20 NEW SUBSECTION . 1A. State preschool funding for 21 community-based providers approved to directly participate in the 22 preschool program. 23 a. State preschool funding shall not be used for the costs 24 of constructing a facility in connection with an approved 25 local program. Preschool foundation aid funding may be used 26 by community-based providers for any purpose determined by the 27 community-based provider to meet standards for high-quality 28 preschool instruction and for purposes that directly or 29 indirectly benefit students enrolled in the approved local 30 program, including but not limited to professional development 31 for preschool teachers, instructional equipment and supplies, 32 material and equipment designed to develop pupils’ large and 33 small motor skills, translation services, playground equipment 34 and repair costs, food and beverages used by children in the 35 -6- LSB 5279HV (1) 91 jda/jh 6/ 10

H.F. 2358 approved local program, safety equipment, facility rental fees, 1 and for other direct costs that enhance the approved local 2 program, including by contracting with other community partners 3 for any such services. State preschool funding may be used 4 by approved local programs for the costs of transportation 5 involving children participating in the preschool program. 6 Preschool foundation aid funding received by a community-based 7 provider approved to directly participate in the preschool 8 program that remains unexpended and unobligated at the end 9 of a fiscal year shall be used to build the community-based 10 provider’s capacity in the next succeeding fiscal year. 11 b. For the fiscal year beginning July 1, 2026, and each 12 succeeding fiscal year, of the amount of state preschool 13 funding received by a community-based provider approved 14 to directly participate in the preschool program for a 15 fiscal year, not more than five percent may be used by the 16 community-based provider for administering the approved local 17 program. Outreach activities and rent for facilities not owned 18 by the community-based provider are permissive uses of the 19 administrative funds. 20 Sec. 11. Section 256C.4, subsection 2, paragraph a, Code 21 2026, is amended to read as follows: 22 a. To be included as an eligible student in the enrollment 23 count of the preschool programming provided by a school 24 district approved to participate in the preschool program or 25 a community-based provider approved to directly participate 26 in the preschool program , a child must be four years of age 27 by September 15 in the base year and attending the school 28 district’s or community-based provider’s approved local 29 program. 30 Sec. 12. Section 256C.5, subsection 1, paragraphs c and d, 31 Code 2026, are amended to read as follows: 32 c. “Preschool budget enrollment” means the figure that is 33 equal to fifty percent of the actual enrollment of eligible 34 students in the preschool programming provided by a school 35 -7- LSB 5279HV (1) 91 jda/jh 7/ 10

H.F. 2358 district approved to participate in the preschool program or a 1 community-based provider approved to directly participate in 2 the preschool program on October 1 of the base year, or the 3 first Monday in October if October 1 falls on a Saturday or 4 Sunday. 5 d. “Preschool foundation aid” means the product of the 6 regular program state cost per pupil for the budget year 7 multiplied by the school district’s preschool budget enrollment 8 or the community-based provider’s preschool budget enrollment . 9 Sec. 13. Section 256C.5, Code 2026, is amended by adding the 10 following new subsection: 11 NEW SUBSECTION . 2A. Preschool foundation aid community-based 12 provider amount. For the initial school year for which a 13 community-based provider approved to directly participate in 14 the preschool program receives that approval and implements 15 the preschool program, the preschool foundation aid payable 16 to the community-based provider is the product of the regular 17 program state cost per pupil for the school year multiplied 18 by fifty percent of the community-based provider’s eligible 19 student enrollment on the date in the school year determined 20 by rule. For budget years subsequent to the initial year 21 for which a community-based provider approved to directly 22 participate in the preschool program receives that initial 23 approval and implements the preschool program, the preschool 24 foundation aid is the same as calculated pursuant to subsection 25 1. The funding for the preschool foundation aid payable to the 26 community-based provider shall be paid from the appropriation 27 made in section 257.16. Continuation of a community-based 28 provider’s participation in the preschool program for a second 29 or subsequent budget year is subject to the approval of the 30 department based upon the community-based provider’s compliance 31 with accountability provisions and the department’s on-site 32 review of the community-based provider’s implementation of the 33 preschool program. 34 Sec. 14. Section 256C.5, subsection 3, Code 2026, is amended 35 -8- LSB 5279HV (1) 91 jda/jh 8/ 10

H.F. 2358 to read as follows: 1 3. Aid payments. 2 a. Preschool foundation aid shall be paid as part of the 3 state aid payments made to school districts in accordance with 4 section 257.16 . 5 b. Preschool foundation aid paid directly to community-based 6 providers shall be paid to the community-based provider in 7 monthly installments beginning on September 15 of a budget year 8 and ending on or about June 15 of the budget year as determined 9 by the department of management, taking into consideration the 10 relative budget and cash position of the state resources. 11 Sec. 15. EMERGENCY RULES. The state board of education 12 may adopt emergency rules under section 17A.4, subsection 3, 13 and section 17A.5, subsection 2, paragraph “b”, to implement 14 the provisions of this Act and the rules shall be effective 15 immediately upon filing unless a later date is specified in the 16 rules. Any rules adopted in accordance with this section shall 17 also be published as a notice of intended action as provided 18 in section 17A.4. 19 EXPLANATION 20 The inclusion of this explanation does not constitute agreement with 21 the explanation’s substance by the members of the general assembly. 22 This bill authorizes community-based providers to 23 directly participate in the statewide preschool program for 24 four-year-old children. 25 Under current law, only school districts that meet certain 26 requirements established by the state board of education 27 are able to participate in the statewide preschool program 28 for four-year-old children established pursuant to Code 29 chapter 256C, although school districts may contract with 30 community-based providers. The bill authorizes community-based 31 providers to directly participate in the statewide preschool 32 program for four-year-old children established pursuant 33 to Code chapter 256C by applying with the department of 34 education to implement a preschool program. The state board is 35 -9- LSB 5279HV (1) 91 jda/jh 9/ 10

H.F. 2358 required to adopt rules to further define the requirements of 1 community-based providers implementing the preschool program. 2 Under current law, state funding provided under the 3 statewide preschool program for four-year-old children is 4 provided to school districts based upon the number of eligible 5 students enrolled in the preschool programming provided by 6 the school district. Also under current law, if the school 7 district contracts with a community-based provider, state 8 funding passes from the school district to the community-based 9 provider. The bill allows a community-based provider approved 10 to directly participate in the preschool program to be paid 11 preschool foundation aid directly in the same manner as a 12 school district. The bill establishes the amount of preschool 13 foundation aid that is payable to such a community-based 14 provider for the initial school year for which the 15 community-based provider is approved to directly participate in 16 the preschool program, and for subsequent school years. 17 The bill makes conforming changes. 18 -10- LSB 5279HV (1) 91 jda/jh 10/ 10