HF 2754 (LSB 5427HZ (2) 91)

HOUSE FILE 2754

BY  COMMITTEE ON APPROPRIATIONS

(SUCCESSOR TO HF 2713)
(SUCCESSOR TO HSB 735)

A BILL FOR

An Act relating to education, including by modifying provisions related to charter schools, the Iowa public employees’ retirement system, financing programs for charter schools administered by the Iowa finance authority, the statewide voluntary preschool program for four-year-old children, education savings accounts, independent accrediting agencies, teacher training and licensure, and private instruction, and making appropriations, and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
CHARTER SCHOOL FUNDING

    Section 1.  Section 256E.8, subsection 2, paragraph a, Code 2026, is amended to read as follows:
   a.  The charter school in which the student is enrolled shall receive under paragraph “c” an amount equal to the sum of the regular program state cost per pupil for the budget year plus the teacher leadership supplement state cost per pupil, the teacher salary supplement state cost per pupil, the professional development supplement state cost per pupil, and the early intervention supplement state cost per pupil for the budget year as provided in section 257.9 plus any moneys that would be due to the school district of residence for the student as a result of the non-English speaking weighting under section 280.4, subsection 3, for the budget year multiplied by the state cost per pupil for the budget year. If a student is an eligible pupil under section 261E.6, the charter school shall pay the tuition reimbursement amount to an eligible postsecondary institution as provided in section 261E.7.
    Sec. 2.  APPLICABILITY.  This division of this Act applies to school budget years beginning on or after July 1, 2026.
DIVISION II
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM

    Sec. 3.  Section 97B.1A, subsection 8, paragraph a, Code 2026, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (13)  Persons employed by a charter school established pursuant to chapter 256E that satisfies all applicable requirements under federal law for participation in the retirement system.
    Sec. 4.  Section 97B.1A, subsection 9, paragraph a, Code 2026, is amended to read as follows:
   a.  “Employer” means the state of Iowa, the counties, municipalities, agencies, public school districts, charter schools established pursuant to chapter 256E that satisfy all applicable requirements under federal law for participation in the retirement system, all political subdivisions, and all of their departments and instrumentalities, including area agencies on aging, other than those employing persons as specified in subsection 8, paragraph “b”, subparagraph (7), and joint planning commissions created under chapter 28E or 28I.
    Sec. 5.  Section 256E.11, subsection 2, Code 2026, is amended to read as follows:
   2.  In the event of a charter school closure, the assets of the charter school shall be used first to satisfy outstanding payroll obligations for employees of the school and any liabilities due and owing to the Iowa public employees’ retirement system, then to creditors of the school, then to the public school district in which the charter school operated, if applicable, and then to the state general fund. If the assets of the charter school are insufficient to pay all obligations of the charter school, the prioritization of the distribution of assets shall be consistent with this subsection and otherwise determined by the district court.
DIVISION III
EXTRACURRICULAR INTERSCHOLASTIC ATHLETIC CONTESTS OR COMPETITIONS PROVIDED BY PUBLIC SCHOOLS

    Sec. 6.  Section 280.13D, Code 2026, is amended to read as follows:
   280.13D  Participation in extracurricular interscholastic athletic contests or competitions provided by public schools.
   1.  a.  The board of directors of a school district shall allow a student who resides within the school district, and who is enrolled in a nonpublic school or a charter school established pursuant to chapter 256E, to participate in any extracurricular interscholastic athletic contest or competition that is provided by the school district pursuant to the terms of an agreement between the board of directors of the school district and the authorities in charge of the nonpublic school or the governing board of the charter school, as applicable, that provides for the eligibility of the student, if all of the following criteria are satisfied:
   (1)  The extracurricular interscholastic athletic contest or competition has not been provided by the nonpublic school or the charter school during the two immediately preceding school years.
   (2)  The nonpublic school or charter school has not entered into an agreement under section 280.13A with another school district, nonpublic school, or charter school that provides for the eligibility of students enrolled in the nonpublic school or charter school to participate in the extracurricular interscholastic athletic contest or competition that is being provided by that school district, nonpublic school, or charter school.
   b.  The board of directors of a school district shall allow a student who resides within a contiguous school district, and who is enrolled in a nonpublic school or charter school, to participate in any extracurricular interscholastic athletic contest or competition that is provided by the school district pursuant to the terms of an agreement between the board of directors of the school district and the authorities in charge of the nonpublic school or the governing board of the charter school, as applicable, that provides for the eligibility of the student, if all of the following criteria are satisfied:
   (1)  The extracurricular interscholastic athletic contest or competition has not been provided by the nonpublic school or charter school or by the student’s school district of residence, during the two immediately preceding school years.
   (2)  The nonpublic school has not entered into an agreement under section 280.13A with another school district, nonpublic school, or charter school that provides for the eligibility of students enrolled in the nonpublic school or charter school to participate in the extracurricular interscholastic athletic contest or competition that is being provided by that school district, nonpublic school, or charter school.
   c.  If the board of directors of a school district has established a fee for the cost of a student’s participation in an extracurricular interscholastic athletic contest or competition, a student who is enrolled in a nonpublic school or a charter school and is participating in a contest or competition at a public school pursuant to paragraph “a” or “b”, or the student’s parent or guardian, shall be responsible for the payment of such fee. The amount of such fee shall not exceed the amount of the fee the board of directors of the school district has established for students who are enrolled in the school district.
   2.  A student who is enrolled in a nonpublic school or a charter school and is participating in a contest or competition at a public school pursuant to subsection 1, paragraph “a” or “b”, shall participate under the same conditions as a student who is enrolled in the school district, including meeting the school district’s student code of conduct requirements.
   3.  A student who participates in an extracurricular interscholastic athletic contest or competition pursuant to this section shall be deemed to satisfy the residence requirements for purposes of section 256.46.
DIVISION IV
LOCAL EDUCATION AGENCY STATUS

    Sec. 7.  Section 256E.5, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  1A.  The governing board of a charter school that is approved under this section shall be designated a local education agency for the purpose of receiving federal funds for all attendance centers that are under the jurisdiction of the governing board.
DIVISION V
CHARTER SCHOOL FACILITIES REVOLVING LOAN PROGRAM

    Sec. 8.  NEW SECTION.  16.163  Charter school facilities revolving loan program fund —— credit enhancement agreements.
   1.  a.  A charter school facilities revolving loan program fund is created within the authority to assist charter schools established pursuant to chapter 256E in acquiring suitable school facilities. The moneys in the charter school facilities revolving loan program fund are appropriated to the authority for use in the development and operation of a charter school facilities revolving loan program to assist charter schools in purchasing, acquiring, developing, reconstructing, remodeling, or replacing school buildings.
   b.  Moneys transferred by the authority for deposit in the charter school facilities revolving loan program fund, moneys appropriated to the charter school facilities revolving loan program, and any other moneys available to and obtained or accepted by the authority for placement in the charter school facilities revolving loan program fund shall be deposited in the fund. Additionally, payment of interest, recaptures of awards, and other repayments to the charter school facilities revolving loan program fund shall be deposited in the fund. Notwithstanding section 12C.7, subsection 2, interest or earnings on moneys in the charter school facilities revolving loan program fund shall be credited to the fund. Notwithstanding section 8.33, moneys that remain unencumbered or unobligated at the end of the fiscal year shall not revert but shall remain available for the same purpose in the succeeding fiscal year.
   c.  The authority shall annually allocate moneys available in the charter school facilities revolving loan program fund to assist charter schools in purchasing, acquiring, developing, reconstructing, remodeling, or replacing school buildings.
   2.  In addition to the charter school facilities revolving loan program authorized pursuant to subsection 1, the authority is authorized to make or enter into a liquidity or credit enhancement agreement with a charter school established pursuant to chapter 256E to assist the charter school in purchasing, acquiring, developing, reconstructing, remodeling, or replacing school buildings.
    Sec. 9.  CODE EDITOR DIRECTIVE.  The Code editor shall designate section 16.163, as enacted in this Act, as a new section within chapter 16, subchapter X, part 6, and may redesignate the preexisting part and correct internal references as necessary, including references to part headnotes.
DIVISION VI
STATEWIDE VOLUNTARY PRESCHOOL PROGRAM FOR FOUR-YEAR-OLD CHILDREN

    Sec. 10.  Section 256C.3, subsection 4, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  e.  (1)  A school district may enter into a chapter 28E agreement with a community-based provider to allow the community-based provider to provide high-quality instruction as part of the approved local program.
   (2)  Upon the request of a community-based provider, a school district shall enter into a chapter 28E agreement with a community-based provider to allow the community-based provider to provide high-quality instruction as part of the approved local program.
   (3)  A chapter 28E agreement entered into pursuant to this paragraph shall not limit the number of eligible students who may receive high-quality instruction from a community-based provider as part of the approved local program.
    Sec. 11.  NEW SECTION.  256C.7  Limitation of authority.
   1.  This chapter shall not be construed to authorize the state or any political subdivision of the state to exercise authority over any community-based provider or construed to require a community-based provider to modify its academic standards for admission or educational program in order to receive payments from a school district pursuant to section 256C.4, subsection 1.
   2.  This chapter shall not be construed to expand the authority of the state or any political subdivision of the state to impose regulations upon any community-based provider that are not necessary to implement this chapter.
   3.  A community-based provider that receives payments from a school district pursuant to section 256C.4, subsection 1, is not an agent of this state or of a political subdivision of this state.
   4.  Rules adopted by the department of education to implement this chapter that impose an undue burden on a community-based provider are invalid.
   5.  A community-based provider that receives payments from a school district pursuant to section 256C.4, subsection 1, shall be given the maximum freedom possible to provide for the educational needs of the community-based provider’s students, consistent with state and federal law.
DIVISION VII
EDUCATION SAVINGS ACCOUNTS

    Sec. 12.  Section 257.11B, subsections 3 and 4, Code 2026, are amended to read as follows:
   3.  a.  (1)  On or after January 1, but on or before June 30, preceding the school year for which the education savings account payment is requested, the parent or guardian of an eligible pupil may request an education savings account payment by submitting an application to the department of education.
   (2)  On or after December 1, but on or before December 20, preceding the semester for which the education savings account payment is requested, the parent or guardian of an eligible pupil may request an education savings account payment by submitting an application to the department of education.
   b.  Within thirty days following submission of an application, the department of education or third-party entity shall notify the parent or guardian of each pupil approved for the following school year or semester and specify the amount of the education savings account payment for the pupil, if known at the time of the notice. As soon as practical following the processing of all applications, the department of education or third-party entity shall determine the number of pupils in each school district approved for the school budget year and provide such information to the department of management.
   c.  Education savings account payments shall only be approved for one school year or one semester, as applicable, and applications must be submitted annually for payments in subsequent school years.
   4.  Each education savings account payment shall be equal to the regular program state cost per pupil for the same school budget year; provided, however, that an education savings account payment shall be equal to fifty percent of the regular program state cost per pupil for the same school budget year if the pupil’s parent or guardian submitted an application under subsection 3, paragraph “a”, subparagraph (2).
    Sec. 13.  Section 257.11B, subsection 6, paragraph a, Code 2026, is amended to read as follows:
   a.  For each pupil approved for an education savings account payment, the department of education or third-party entity shall establish an individual account for that pupil in the education savings account fund. The If the pupil’s parent or guardian submitted an application under subsection 3, paragraph “a”, subparagraph (1), the amount of the pupil’s education savings account payment shall be deposited into the pupil’s individual account on July 15 or thirty days following submission of the application, whichever is later, and such amount shall be immediately available for the payment of qualified educational expenses incurred by the parent or guardian for the pupil during that fiscal year using a payment method authorized under subsection 5.  If the pupil’s parent or guardian submitted an application under subsection 3, paragraph “a”, subparagraph (2), the amount of the pupil’s education savings account payment shall be deposited into the pupil’s individual account within thirty days following submission of the application, and such amount shall be immediately available for the payment of qualified educational expenses incurred by the parent or guardian for the pupil during that fiscal year using a payment method authorized under subsection 5.
DIVISION VIII
INDEPENDENT ACCREDITING AGENCIES

    Sec. 14.  Section 256.11, subsection 16, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  d.  (1)  This subsection shall not be construed to authorize the state or any political subdivision of the state to exercise authority over any nonpublic school or construed to require a nonpublic school to modify its academic standards for admission or educational program.
   (2)  This section shall not be construed to expand the authority of the state or any political subdivision of the state to impose regulations upon any nonpublic school that are not necessary to implement this section.
   (3)  Rules adopted by the state board of education to implement this section that impose an undue burden on a nonpublic school are invalid.
   (4)  A nonpublic school shall be given the maximum freedom possible to provide for the educational needs of the school’s students, consistent with state and federal law.
DIVISION IX
SCHEDULE OF TEACHER TRAININGS AND LICENSURE RENEWAL REQUIREMENTS

    Sec. 15.  DEPARTMENT OF EDUCATION —— SCHEDULE OF REQUIRED TEACHER TRAINING AND LICENSURE RENEWAL REQUIREMENTS.
   1.  The department of education shall convene and provide administrative support to a task force that shall study the training programs in which teachers in this state are required to participate pursuant to state law and the requirements associated with renewing a teaching license.
   2.  Any expense incurred by a member of the task force shall be the responsibility of the individual member or the respective entity represented by the member.
   3.  The task force shall submit its findings and recommendations to the general assembly on or before December 31, 2026. The recommendations must include specific recommendations related to how to change current law to create a more manageable training program schedule and licensure renewal requirement schedule for teachers.
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 education by modifying provisions related to charter schools, the Iowa public employees’ retirement system, financing programs for charter schools administered by the Iowa finance authority, the statewide voluntary preschool program, education savings accounts, independent accrediting agencies, teacher training and licensure, and makes appropriations.
   DIVISION I —— CHARTER SCHOOL FUNDING. Currently, each student enrolled in a charter school under Code chapter 256E shall be counted, for state school foundation purposes, in the student’s district of residence. The department of education is then required to pay to the charter school in which the student is enrolled an amount equal to the sum of the regular program state cost per pupil for the budget year plus other additional costs specified in Code section 256E.8(2)(a). This division adds the teacher salary supplement state cost per pupil to the amount required to be paid to the charter school. This provision applies to school budget years beginning on or after July 1, 2026.
   DIVISION II —— IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM.  This division provides that persons employed by charter schools that satisfy all applicable requirements under federal law for participation in the retirement systemare employees for purposes of the provisions of the Iowa public employees’ retirement system (IPERS). Additionally, the division provides that charter schools that satisfy all applicable requirements under federal law for participation in the retirement system are employers for purposes of the provisions of IPERS.
   The bill provides that in the event of a charter school closure, the assets of the charter school shall be, after payroll obligations but prior to paying creditors, used to satisfy any liabilities due and owing to IPERS.
   DIVISION III —— EXTRACURRICULAR INTERSCHOLASTIC ATHLETIC CONTESTS OR COMPETITIONS PROVIDED BY PUBLIC SCHOOLS. This division requires the board of directors of a school district to allow a student who resides within the district, and who is enrolled in a charter school, to participate in any extracurricular interscholastic athletic contest or competition that is provided by the school district pursuant to the terms of an agreement between the board of directors of the school district and the governing board of the charter school if the extracurricular interscholastic athletic contest or competition has not been provided by the charter school during the two immediately preceding school years and if the charter school has not entered into an agreement under Code section 280.13A (sharing interscholastic activities) with another school district, nonpublic school, or charter school that provides for the eligibility of students enrolled in the charter school to participate in the extracurricular interscholastic athletic contest or competition that is being provided by that school.
   The division requires the board of directors of a school district to allow a student who resides within a contiguous school district, and who is enrolled in a charter school, to participate in any extracurricular interscholastic athletic contest or competition that is provided by the school district pursuant to the terms of an agreement between the board of directors of the school district and the governing board of the charter school if the extracurricular interscholastic athletic contest or competition has not been provided by the charter school or by the student’s school district of residence during the two immediately preceding school years and if the charter school has not entered into an agreement under Code section 280.13A with another school district, nonpublic school, or charter school that provides for the eligibility of students enrolled in the charter school to participate in the extracurricular interscholastic athletic contest or competition that is being provided by that school.
   The division provides that if the board of directors of a school district has established a fee for the cost of a student’s participation in an extracurricular interscholastic athletic contest or competition, a student who is enrolled in a charter school and is participating in a contest or competition at a public school pursuant to the division’s provisions, or the student’s parent or guardian, shall be responsible for the payment of such fee.
   The division requires a student who is enrolled in a charter school and is participating in a contest or competition at a public school pursuant to the division’s provisions to participate under the same conditions as a student who is enrolled in the school district, including meeting the school district’s student code of conduct requirements.
   The division provides that a student who participates in an extracurricular interscholastic athletic contest or competition pursuant to the division’s provisions is deemed to satisfy the residence requirements for purposes of Code section 256.46 (rules for participation in extracurricular activities by certain children).
   DIVISION IV —— LOCAL EDUCATION AGENCY STATUS. This division provides that the governing board of a charter school that is approved under Code section 256E.5 (founding group-state board model) is a local education agency for the purpose of receiving federal funds for all attendance centers that are under the jurisdiction of the governing board.
   DIVISION V —— CHARTER SCHOOL FACILITIES REVOLVING LOAN PROGRAM. This division establishes a charter school facilities revolving loan program fund within the Iowa finance authority (IFA) to assist charter schools in acquiring suitable school facilities. The moneys in the fund are appropriated to the IFA for use in the development and operation of a charter school facilities revolving loan program in purchasing, acquiring, developing, reconstructing, remodeling, or replacing school buildings. The division also allows the IFA to make or enter into a liquidity or credit enhancement agreement with a charter school in purchasing, acquiring, developing, reconstructing, remodeling, or replacing school buildings.
   DIVISION VI —— STATEWIDE VOLUNTARY PRESCHOOL PROGRAM FOR FOUR-YEAR-OLD CHILDREN. This division authorizes school districts to enter into a Code chapter 28E agreement with a community-based provider allowing the community-based provider to provide instruction as part of the approved local program, and the division requires school districts to enter into such an agreement upon the request of a community-based provider. Additionally, the division prohibits such Code chapter 28E agreements from limiting the number of eligible students who may receive instruction from a community-based provider as part of the approved local program.
   The division prohibits Code chapter 256C (statewide voluntary preschool program for four-year-old children) from being construed to authorize the state or any political subdivision of the state to exercise authority over any community-based provider or construed to require a community-based provider to modify its academic standards for admission or educational program in order to receive payments from a school district under the statewide voluntary preschool program (SWVPP). The division also prohibits Code chapter 256C from being construed to expand the authority of the state or any political subdivision of the state to impose regulations upon any community-based provider that are not necessary to implement this section. The division provides that a community-based provider that receives payments from a school district under the SWVPP is not an agent of this state or of a political subdivision of this state. Rules adopted by the department of education to implement the SWVPP that impose an undue burden on a community-based provider are invalid. The division requires that a community-based provider that receives payments from a school district under the SWVPP be given the maximum freedom possible to provide for the educational needs of the community-based provider’s students, consistent with state and federal law.
   DIVISION VII —— EDUCATION SAVINGS ACCOUNTS. The education savings account program is a program that provides funds to pupils who attend nonpublic schools to pay for qualified educational expenses, including but not limited to tuition, tutoring or cognitive skill training fees, educational therapy costs, software expenses, and expenses related to course materials. Under current law, the parent or guardian of a pupil is required to submit an application for payment under the education savings account program to the department of education on or after January 1, but on or before June 30, preceding the school year for which the education savings account payment is requested. This division allows the parent or guardian of a pupil to submit such an application on or after December 1, but on or before December 20, preceding the semester for which the education savings account payment is requested. Additionally, under current law each education savings account payment is equal to the regular program state cost per pupil for the same school budget year. The division provides that, if the parent or guardian of a pupil submitted such an application on or after December 1, but on or before December 20, preceding the semester for which the education savings account payment is requested, the education savings account payment for such pupil is equal to 50 percent of the regular program state cost per pupil for the same school budget year. The division makes conforming changes.
   DIVISION VIII —— INDEPENDENT ACCREDITING AGENCIES. Current law authorizes a nonpublic school to be accredited by an approved independent accrediting agency instead of by the state board of education if the nonpublic school is accredited by an independent accrediting agency that is on a list of approved independent accrediting agencies maintained by the state board of education. This division provides that these provisions shall not be construed to authorize the state or any political subdivision of the state to exercise authority over any nonpublic school or construed to require a nonpublic school to modify its academic standards for admission or educational program. The division also provides that these provisions shall not be construed to expand the authority of the state or any political subdivision of the state to impose regulations upon any nonpublic school that are not necessary to implement the state’s educational standards. The division provides that rules adopted by the state board of education to implement these provisions that impose an undue burden on a nonpublic school are invalid. The division requires that a nonpublic school shall be given the maximum freedom possible to provide for the educational needs of the school’s students, consistent with state and federal law.
   DIVISION IX —— SCHEDULE OF TEACHER TRAININGS AND LICENSURE RENEWAL REQUIREMENTS. This division requires the department of education to convene a task force to study the training programs in which teachers in this state are required to participate pursuant to state law and the requirements associated with renewing a teaching license. The task force is required to submit its findings and recommendations to the general assembly on or before December 31, 2026. The recommendations must include specific recommendations related to how to change current law to create a more manageable training program schedule and licensure renewal requirement schedule for teachers.