House File 319 - Introduced HOUSE FILE 319 BY COMMITTEE ON APPROPRIATIONS (SUCCESSOR TO HSB 138) 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, 2025, modifying 3 provisions relating to the property tax replacement payments 4 and transportation equity payments, modifying provisions 5 relating to the regular program state cost per pupil and 6 funding for shared operational functions, establishing a 7 school district funding supplement, making appropriations, 8 and including effective date provisions. 9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 10 TLSB 2474HV (1) 91 jm/md

H.F. 319 DIVISION I 1 STATE AND CATEGORICAL PERCENT OF GROWTH AND PROPERTY TAX 2 REPLACEMENT PAYMENTS 3 Section 1. Section 257.8, subsections 1 and 2, Code 2025, 4 are amended to read as follows: 5 1. State percent of growth. The state percent of growth for 6 the budget year beginning July 1, 2022, is two and one-half 7 percent. The state percent of growth for the budget year 8 beginning July 1, 2023, is three percent. The state percent 9 of growth for the budget year beginning July 1, 2024, is two 10 and one-half percent. The state percent of growth for the 11 budget year beginning July 1, 2025, is two and twenty-five 12 hundredths percent. The state percent of growth for each 13 subsequent budget year shall be established by statute which 14 shall be enacted within thirty days of the transmission of the 15 governor’s budget required by February 1 under section 8.21 16 during the regular legislative session beginning in the base 17 year. 18 2. Categorical state percent of growth. The categorical 19 state percent of growth for the budget year beginning July 20 1, 2022, is two and one-half percent. The categorical state 21 percent of growth for the budget year beginning July 1, 2023, 22 is three percent. The categorical state percent of growth for 23 the budget year beginning July 1, 2024, is two and one-half 24 percent. The categorical state percent of growth for the 25 budget year beginning July 1, 2025, is two and twenty-five 26 hundredths percent. The categorical state percent of growth 27 for each budget year shall be established by statute which 28 shall be enacted within thirty days of the transmission of the 29 governor’s budget required by February 1 under section 8.21 30 during the regular legislative session beginning in the base 31 year. The categorical state percent of growth may include 32 state percents of growth for the teacher salary supplement, the 33 professional development supplement, the early intervention 34 supplement, the teacher leadership supplement, and for budget 35 -1- LSB 2474HV (1) 91 jm/md 1/ 11

H.F. 319 years beginning on or after July 1, 2020, transportation equity 1 aid payments under section 257.16C . 2 Sec. 2. Section 257.16B, subsections 1 and 2, Code 2025, are 3 amended to read as follows: 4 1. For each fiscal year beginning on or after July 1, 2022 5 2023 , there is appropriated from the general fund of the state 6 to the department of education an amount necessary to make all 7 school district property tax replacement payments under this 8 section , as calculated in subsection 2 . 9 2. a. (1) For the budget year beginning July 1, 2022, 10 the amount of each school district’s property tax replacement 11 payment shall be the product of the school district’s weighted 12 enrollment for the budget year multiplied by the per pupil 13 property tax replacement amount for the budget year calculated 14 under subparagraph (2). 15 (2) The per pupil property tax replacement amount for the 16 budget year beginning July 1, 2022, is equal to the sum of one 17 hundred fifty-three dollars plus the difference between the 18 following: 19 (a) The regular program state cost per pupil for the budget 20 year beginning July 1, 2022, multiplied by one hundred percent 21 less the regular program foundation base per pupil percentage 22 pursuant to section 257.1 for the budget year beginning July 23 1, 2022. 24 (b) The regular program state cost per pupil for the budget 25 year beginning July 1, 2021, multiplied by one hundred percent 26 less the regular program foundation base per pupil percentage 27 pursuant to section 257.1 for the budget year beginning July 28 1, 2022. 29 b. a. (1) For the budget year beginning July 1, 2023, 30 the amount of each school district’s property tax replacement 31 payment shall be the product of the school district’s weighted 32 enrollment for the budget year multiplied by the per pupil 33 property tax replacement amount for the budget year calculated 34 under subparagraph (2). 35 -2- LSB 2474HV (1) 91 jm/md 2/ 11

H.F. 319 (2) The per pupil property tax replacement amount for the 1 budget year beginning July 1, 2023, is equal to the sum of one 2 hundred fifty-three dollars plus the difference between the 3 following: 4 (a) The regular program state cost per pupil for the budget 5 year beginning July 1, 2023, multiplied by one hundred percent 6 less the regular program foundation base per pupil percentage 7 pursuant to section 257.1 for the budget year beginning July 8 1, 2023. 9 (b) The regular program state cost per pupil for the budget 10 year beginning July 1, 2021, multiplied by one hundred percent 11 less the regular program foundation base per pupil percentage 12 pursuant to section 257.1 for the budget year beginning July 13 1, 2023. 14 c. b. (1) For each the budget year beginning on or after 15 July 1, 2024, the amount of each school district’s property 16 tax replacement payment shall be the product of the school 17 district’s weighted enrollment for the budget year multiplied 18 by the per pupil property tax replacement amount for the budget 19 year calculated under subparagraph (2). 20 (2) The per pupil property tax replacement amount for 21 the budget years year beginning on or after July 1, 2024, is 22 equal to the sum of one hundred fifty-three dollars plus the 23 difference between the following: 24 (a) The regular program state cost per pupil for the budget 25 year beginning July 1, 2024, multiplied by one hundred percent 26 less the regular program foundation base per pupil percentage 27 pursuant to section 257.1 for the applicable budget year under 28 this paragraph beginning July 1, 2024 . 29 (b) The regular program state cost per pupil for the budget 30 year beginning July 1, 2021, multiplied by one hundred percent 31 less the regular program foundation base per pupil percentage 32 pursuant to section 257.1 for the applicable budget year under 33 this paragraph beginning July 1, 2024 . 34 c. (1) For each budget year beginning on or after July 35 -3- LSB 2474HV (1) 91 jm/md 3/ 11

H.F. 319 1, 2025, the amount of each school district’s property 1 tax replacement payment shall be the product of the school 2 district’s weighted enrollment for the budget year multiplied 3 by the per pupil property tax replacement amount for the budget 4 year calculated under subparagraph (2). 5 (2) The per pupil property tax replacement amount for budget 6 years beginning on or after July 1, 2025, is equal to the sum 7 of one hundred fifty-three dollars plus the difference between 8 the following: 9 (a) The regular program state cost per pupil for the budget 10 year beginning July 1, 2025, multiplied by one hundred percent 11 less the regular program foundation base per pupil percentage 12 pursuant to section 257.1 for the applicable budget year under 13 this paragraph. 14 (b) The regular program state cost per pupil for the budget 15 year beginning July 1, 2021, multiplied by one hundred percent 16 less the regular program foundation base per pupil percentage 17 pursuant to section 257.1 for the applicable budget year under 18 this paragraph. 19 Sec. 3. EFFECTIVE DATE. This division of this Act, being 20 deemed of immediate importance, takes effect upon enactment. 21 DIVISION II 22 STATE COST PER PUPIL 23 Sec. 4. Section 257.9, subsection 2, Code 2025, is amended 24 to read as follows: 25 2. Regular program state cost per pupil for 1992-1993 and 26 succeeding years. 27 a. For the budget year beginning July 1, 1992, and 28 succeeding budget years beginning before July 1, 2018, the 29 regular program state cost per pupil for a budget year is the 30 regular program state cost per pupil for the base year plus the 31 regular program supplemental state aid for the budget year. 32 b. For the budget year beginning July 1, 2018, the regular 33 program state cost per pupil is the regular program state 34 cost per pupil for the base year plus the regular program 35 -4- LSB 2474HV (1) 91 jm/md 4/ 11

H.F. 319 supplemental state aid for the budget year, plus five dollars. 1 c. For the budget year beginning July 1, 2019, the regular 2 program state cost per pupil is the regular program state 3 cost per pupil for the base year plus the regular program 4 supplemental state aid for the budget year, plus five dollars. 5 d. For the budget year beginning July 1, 2020, the regular 6 program state cost per pupil is the regular program state 7 cost per pupil for the base year plus the regular program 8 supplemental state aid for the budget year, plus ten dollars. 9 e. For the budget year beginning July 1, 2021, the regular 10 program state cost per pupil is the regular program state 11 cost per pupil for the base year plus the regular program 12 supplemental state aid for the budget year, plus ten dollars. 13 f. For the budget year beginning July 1, 2022, the regular 14 program state cost per pupil is the regular program state 15 cost per pupil for the base year plus the regular program 16 supplemental state aid for the budget year, plus five dollars. 17 g. For the budget year years beginning July 1, 2023, and 18 succeeding budget years July 1, 2024 , the regular program state 19 cost per pupil for a budget year is the regular program state 20 cost per pupil for the base year plus the regular program 21 supplemental state aid for the budget year. 22 h. For the budget year beginning July 1, 2025, the regular 23 program state cost per pupil is the regular program state 24 cost per pupil for the base year plus the regular program 25 supplemental state aid for the budget year, plus ten dollars. 26 i. For the budget year beginning July 1, 2026, and 27 succeeding budget years, the regular program state cost per 28 pupil for a budget year is the regular program state cost per 29 pupil for the base year plus the regular program supplemental 30 state aid for the budget year. 31 Sec. 5. EFFECTIVE DATE. This division of this Act, being 32 deemed of immediate importance, takes effect upon enactment. 33 DIVISION III 34 SUPPLEMENTARY WEIGHTING FOR SHARED OPERATIONAL FUNCTIONS 35 -5- LSB 2474HV (1) 91 jm/md 5/ 11

H.F. 319 Sec. 6. Section 257.11, subsection 5, paragraph d, Code 1 2025, is amended to read as follows: 2 d. Supplementary weighting pursuant to this subsection shall 3 be available to a school district during the period commencing 4 with the budget year beginning July 1, 2014, through the budget 5 year beginning July 1, 2034. The For budget years beginning 6 prior to July 1, 2025, the maximum amount of additional 7 weighting for which a school district shall be eligible in a 8 budget year is twenty-one additional pupils; and for budget 9 years beginning on or after July 1, 2025, the maximum amount 10 of additional weighting for which a school district shall be 11 eligible in a budget year is twenty-five pupils; provided, 12 however, that for budget years beginning on or after July 13 1, 2024, the supplementary weighting assigned for a shared 14 operational function in the area of a college and career 15 transition counselor or coordinator shall not count toward this 16 maximum amount. Criteria for determining the qualification 17 of operational functions for supplementary weighting shall be 18 determined by the department by rule, through consideration of 19 increased student opportunities. 20 Sec. 7. EFFECTIVE DATE. This division of this Act, being 21 deemed of immediate importance, takes effect upon enactment. 22 DIVISION IV 23 TRANSPORTATION EQUITY PAYMENTS 24 Sec. 8. Section 257.16C, subsection 3, paragraph d, 25 subparagraph (4), unnumbered paragraph 1, Code 2025, is amended 26 to read as follows: 27 For each the fiscal year beginning on or after July 1, 28 2023, and the fiscal year beginning July 1, 2024, there 29 is appropriated from the general fund of the state to the 30 department of management for deposit in the transportation 31 equity fund the sum of the following, or so much thereof as is 32 necessary, to be used for the purposes of this section : 33 Sec. 9. Section 257.16C, subsection 3, paragraph d, Code 34 2025, is amended by adding the following new subparagraphs: 35 -6- LSB 2474HV (1) 91 jm/md 6/ 11

H.F. 319 NEW SUBPARAGRAPH . (5) For the fiscal year beginning 1 July 1, 2025, there is appropriated from the general fund of 2 the state to the department of management for deposit in the 3 transportation equity fund an amount necessary to make all 4 transportation equity aid payments under subsection 2, to be 5 used for the purposes of this section. 6 NEW SUBPARAGRAPH . (6) For each fiscal year beginning on 7 or after July 1, 2026, there is appropriated from the general 8 fund of the state to the department of management for deposit 9 in the transportation equity fund the sum of the following, or 10 so much thereof as is necessary, to be used for the purposes of 11 this section: 12 (a) The amount appropriated to the transportation equity 13 fund under this paragraph for the immediately preceding fiscal 14 year. 15 (b) The product of the amount determined under subparagraph 16 division (a) multiplied by the categorical percent of growth 17 under section 257.8, subsection 2, for the budget year 18 beginning on the same date of the fiscal year for which the 19 appropriation is made. 20 Sec. 10. EFFECTIVE DATE. This division of this Act, being 21 deemed of immediate importance, takes effect upon enactment. 22 DIVISION V 23 SCHOOL FUNDING SUPPLEMENT 24 Sec. 11. SCHOOL DISTRICT FUNDING SUPPLEMENT —— FISCAL YEAR 25 2025-2026. 26 1. There is appropriated from the general fund of the state 27 to the department of education for the fiscal year beginning 28 July 1, 2025, and ending June 30, 2026, twenty-two million five 29 hundred ninety-one thousand two hundred seventy-four dollars to 30 make all payments to school districts required under subsection 31 2. 32 2. a. Moneys appropriated to the department of education 33 under this section shall be used to provide a funding 34 supplement to each school district during the fiscal year 35 -7- LSB 2474HV (1) 91 jm/md 7/ 11

H.F. 319 beginning July 1, 2025, and ending June 30, 2026. 1 b. Each school district’s funding supplement amount shall 2 be equal to the amount of the appropriation under subsection 3 1 multiplied by the quotient of the school district’s budget 4 enrollment for the budget year beginning July 1, 2025, and 5 ending June 30, 2026, divided by the statewide total budget 6 enrollment for the budget year beginning July 1, 2025, and 7 ending June 30, 2026. 8 c. Moneys received by a school district under this section 9 may be used for any school general fund purpose, shall be 10 miscellaneous income for purposes of chapter 257, and shall not 11 be included in district cost. 12 3. The payment of funding supplement amounts under this 13 section shall be paid by the department of education at the 14 same time and in the same manner as foundation aid is paid 15 under section 257.16 for the fiscal year beginning July 1, 16 2025, and ending June 30, 2026, and may be included in the 17 monthly payment of state aid under section 257.16, subsection 18 2. 19 Sec. 12. EFFECTIVE DATE. This Act, being deemed of 20 immediate importance, takes effect upon enactment. 21 EXPLANATION 22 The inclusion of this explanation does not constitute agreement with 23 the explanation’s substance by the members of the general assembly. 24 This bill relates to public school funding by establishing 25 the state percent of growth and the categorical state percent 26 of growth for the budget year beginning July 1, 2025, modifying 27 provisions relating to the property tax replacement payment and 28 transportation equity payments, modifying provisions relating 29 to the regular program state cost per pupil, and establishing a 30 school funding supplement. 31 DIVISION I —— STATE AND CATEGORICAL PERCENT OF GROWTH AND 32 PROPERTY TAX REPLACEMENT PAYMENTS. The bill establishes a 33 state percent of growth of 2.25 percent for the budget year 34 beginning July 1, 2025. The state percent of growth is used 35 -8- LSB 2474HV (1) 91 jm/md 8/ 11

H.F. 319 to calculate the amount of supplemental state aid for a budget 1 year as part of the state school foundation program. The 2 bill also establishes a categorical state percent of growth 3 of 2.25 percent for the budget year beginning July 1, 2025. 4 The categorical state percent of growth is generally used to 5 calculate the amount of supplemental state aid for each of the 6 categorical funding supplements. 7 Code section 257.16B provides for school district property 8 tax replacement payments. For each budget year beginning on 9 or after July 1, 2024, the amount of each school district’s 10 property tax replacement payment is the product of the school 11 district’s weighted enrollment for the budget year multiplied 12 by the per pupil property tax replacement amount for the budget 13 year. The per pupil property tax replacement amount for budget 14 years beginning on or after July 1, 2024, is equal to the 15 sum of $153 plus the difference between the following: (1) 16 the regular program state cost per pupil for the budget year 17 beginning July 1, 2024, multiplied by 100 percent less the 18 regular program foundation base per pupil percentage; and (2) 19 the regular program state cost per pupil for the budget year 20 beginning July 1, 2021, multiplied by 100 percent less the 21 regular program foundation base per pupil percentage. 22 The bill modifies the property tax replacement payment 23 calculation for budget years beginning on or after July 1, 24 2025. For budget years beginning on or after July 1, 2025, 25 the amount of each school district’s property tax replacement 26 payment is the product of the school district’s weighted 27 enrollment for the budget year multiplied by the per pupil 28 property tax replacement amount for the budget year. The 29 per pupil property tax replacement amount for budget years 30 beginning on or after July 1, 2025, is equal to the sum of $153 31 plus the difference between the following: (1) the regular 32 program state cost per pupil for the budget year beginning July 33 1, 2025, multiplied by 100 percent less the regular program 34 foundation base per pupil percentage; and (2) the regular 35 -9- LSB 2474HV (1) 91 jm/md 9/ 11

H.F. 319 program state cost per pupil for the budget year beginning July 1 1, 2021, multiplied by 100 percent less the regular program 2 foundation base per pupil percentage. The regular program 3 foundation base per pupil percentage is 88.4 percent. 4 The division takes effect upon enactment. 5 DIVISION II —— STATE COST PER PUPIL. Under the bill, for 6 the budget year beginning July 1, 2025, the regular program 7 state cost per pupil is the regular program state cost per 8 pupil for the base year plus the regular program supplemental 9 state aid for the budget year, plus $10. Then with the budget 10 year beginning July 1, 2026, and succeeding budget years, the 11 regular program state cost per pupil will again be calculated 12 as the regular program state cost per pupil for the base year 13 plus the regular program supplemental state aid for the budget 14 year. 15 The division takes effect upon enactment. 16 DIVISION III —— SUPPLEMENTARY WEIGHTING FOR SHARED 17 OPERATIONAL FUNCTIONS. Current law provides that a school 18 district that shares with a political subdivision one or more 19 operational functions in certain specified areas for at least 20 20 percent of the school year shall be assigned a supplementary 21 weighting for each shared operational function. Under current 22 law, the maximum amount of additional weighting for which a 23 school district is eligible in a budget year is 21 additional 24 pupils. The bill increases the maximum amount of additional 25 weighting for which a school district is eligible in a budget 26 year from 21 additional pupils to 25 additional pupils, for 27 budget years beginning on or after July 1, 2025. 28 The division takes effect upon enactment. 29 DIVISION IV —— TRANSPORTATION EQUITY PAYMENTS. For each 30 fiscal year beginning on or after July 1, 2023, Code section 31 257.16C appropriates from the general fund of the state to the 32 transportation equity fund the sum of the amount appropriated 33 for the immediately preceding fiscal year plus the product of 34 the amount appropriated for the immediately preceding fiscal 35 -10- LSB 2474HV (1) 91 jm/md 10/ 11

H.F. 319 year multiplied by the categorical percent of growth for the 1 corresponding school budget year. The bill modifies the 2 appropriation for the fiscal year beginning July 1, 2025, such 3 that the total appropriated is equal to the amount necessary to 4 make all transportation equity aid payments. 5 The division takes effect upon enactment. 6 DIVISION V —— SCHOOL FUNDING SUPPLEMENT. The bill provides 7 a school district funding supplement for the fiscal year 8 beginning July 1, 2025, and appropriates from the general fund 9 of the state to the department of education for the fiscal year 10 beginning July 1, 2025, and ending June 30, 2026, $22,591,274 11 to make all school district funding supplement payments. 12 Each school district’s funding supplement amount shall be 13 equal to the portion of the $22,591,274 appropriation that 14 is proportionate to the school district’s budget enrollment 15 as a percentage of the statewide total budget enrollment for 16 the budget year beginning July 1, 2025. Such funds received 17 by a school district under the bill may be used for any school 18 general fund purpose. School district funding supplement 19 payments received by a school district shall be miscellaneous 20 income for purposes of Code chapter 257 and shall not be 21 included in district cost. 22 The division takes effect upon enactment. 23 -11- LSB 2474HV (1) 91 jm/md 11/ 11