HF 914 (LSB 2425YH (4) 91)

HOUSE FILE 914

BY  BAGNIEWSKI, WICHTENDAHL, KRESSIG, B. MEYER, LEVIN, KURTH, JACOBY, GOSA, OLSON, BROWN-POWERS, SRINIVAS, EHLERT, R. JOHNSON, and MATSON

A BILL FOR

An Act relating to education, including by modifying provisions related to the duties and powers of area education agencies, the department of education, and area education agency funding, and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
DIVISION OF SPECIAL EDUCATION OF THE DEPARTMENT OF EDUCATION

    Section 1.  Section 256.9, subsection 36, Code 2025, is amended by striking the subsection.
    Sec. 2.  Section 256B.3, subsections 16, 17, 18, 19, 20, 21, and 22, Code 2025, are amended by striking the subsections.
DIVISION II
AREA EDUCATION AGENCIES —— GENERAL PROVISIONS

    Sec. 3.  Section 273.2, subsections 1 and 3, Code 2025, are amended to read as follows:
   1.  There are established throughout the state nine area education agencies, each of which is under the general supervision of the director of the department of education, except as otherwise provided in this chapter governed by an area education agency board of directors. Each area education agency shall have an area education agency board of directors that shall serve in an advisory capacity. The boundaries of an area education agency shall not divide a school district. The director of the department of education shall change boundaries of area education agencies to take into account mergers of local school districts and changes in boundaries of local school districts, when necessary to maintain the policy of this chapter that a local school district shall not be a part of more than one area education agency.
   3.  a.  The area education agency board shall furnish educational services and programs as provided in  section 273.1, this section, sections 273.3 through 273.8, and chapter 256B to pupils enrolled in public or nonpublic schools located within its boundaries which are on the list of accredited schools pursuant to section 256.11, which request to receive such services. The programs and services provided shall be at least commensurate with programs and services existing on July 1, 1974. The programs and services provided to pupils enrolled in nonpublic schools shall be comparable to programs and services provided to pupils enrolled in public schools within constitutional guidelines.
   b.  The area education agency may furnish evidence-based professional development services to public or nonpublic schools which are on the list of accredited schools pursuant to section 256.11 if any of the following requirements are satisfied:
   (1)  The professional development service is included on the list developed by the director of the department of education pursuant to section 256.9, subsection 36.
   (2)  The director of the department of education grants approval to the area education agency to furnish the evidence-based professional development services.
    Sec. 4.  Section 273.2, subsections 5 and 13, Code 2025, are amended by striking the subsections.
    Sec. 5.  Section 273.3, subsections 1 and 12, Code 2025, are amended to read as follows:
   1.  Advise and consult with Determine the policies of the area education agency on policies and procedures for providing programs and services.
   12.  Area education agencies shall prepare Prepare an annual budget estimating income and expenditures for programs and services as provided in sections 273.1, 273.2, this section, sections 273.4 through 273.8, and chapter 256B within the limits of funds provided under section 256B.9 and chapter 257. The board shall submit the proposed budget to the director of the department of education for approval not later than March 1 of each year, and the director shall either approve or reject the proposed budget for changes within ten days after submission post notice of a public hearing on the proposed budget on the area education agency’s internet site and by publication in the newspaper of general circulation in the territory of the area education agency in which the principal place of business of a school district that is part of the area education agency is located. The notice shall specify the date, which shall be not later than March 1 of each year, the time, and the location of the public hearing. The proposed budget as approved by the director of the department of education board shall then be submitted to the state board of education, on forms provided by the department, no later than March 15 preceding the next fiscal year for approval. The state board shall review the proposed budget of each area education agency and shall before May 1, either grant approval or return the budget without approval with comments of the state board included. An unapproved budget shall be resubmitted to the state board for final approval not later than May 15. The state board shall give final approval only to budgets submitted by area education agencies accredited by the state board or that have been given conditional accreditation by the state board.
    Sec. 6.  Section 273.3, subsection 26, Code 2025, is amended by striking the subsection.
    Sec. 7.  Section 273.5, unnumbered paragraph 1, Code 2025, is amended to read as follows:
   There shall be established a division of special education of the area education agency which shall provide for special education programs and services to the local school districts. The division of special education shall be headed by a director of special education who meets certification standards of the department of education. The director of special education shall be an employee of the division of special education of the department of education. The director of special education shall not be an employee of the area education agency, shall not receive compensation from the area education agency, shall not supervise or manage employees of the area education agency, and shall not directly provide special education services for the agency. The director of special education’s primary job duties and responsibilities to the area education agency are to provide oversight of the area education agency’s special education services. The director of special education shall also have the responsibility for implementation of state regulations and guidelines relating to special education programs and services. The director of special education shall have the following powers and duties:
    Sec. 8.  Section 273.11, Code 2025, is amended to read as follows:
   273.11  Standards for accrediting area education agency programs.
   1.  The state board of education shall develop standards and rules for the accreditation of area education agencies. Standards shall be general in nature, but at a minimum shall identify requirements addressing the services provided by each division, as well as identifying indicators of quality that will permit area education agencies, school districts, the division of special education of the department of education, and the general public to judge accurately the effectiveness of area education agency services.
   2.  Standards developed shall include, but are not limited to, the following:
   a.  Support for school-community planning, including a means of assessing needs, developing collaborative relationships among community agencies, establishing shared direction, and implementing program plans and reporting progress toward goals for all students, including students with disabilities.
   b.  Professional Evidence-based professional development programs that respond to current needs.
   c.  Support for curriculum development, instruction, and assessment for services that address the areas of reading, language arts, math, and science, using research-based methodologies, for all students, including students with disabilities.
   d.  Special education compliance and support.
   e.  Management services, including financial reporting and purchasing as requested and funded by local districts.
   f.  Support for instructional media services that supplement and support local district media centers and services.
   g.  Support for school technology planning and staff development for implementing instructional technologies.
   h.  A program and services evaluation and reporting system that includes information related to special education.
   i.  Support for school district libraries in accordance with section 273.2, subsection 4.
   j.  Support for early childhood service coordination for families and children, age birth through three years, to meet health, safety, and learning needs, including service coordination.
   k.  Timely submission of required reports and documents to the state board of education, the department of education, and the division of special education of the department of education.
   l.  Support for schools and school districts in analyzing student achievement data related to the learning environment, comparing data to the external knowledge base, and using that information to guide schools and school districts in setting goals and implementing actions to improve student learning for all students, including students with disabilities.
   m.  Support for addressing the diverse learning needs of all children and youths, including children and youths who are eligible for special education through services that include direct services to students with disabilities.
   n.  Support for schools and school districts to ensure compliance with rules adopted by the state board of education related to special education.
   o.  Support necessary to implement effective instruction for all students, including students with disabilities, through school technology services.
   p.  Support for students using educational programs and services in a manner that is consistent with the educational standards established pursuant to section 256.11.
   q.  Support for staff development and adult learners utilizing evidence-based professional development in a manner that meets the professional needs of staff and adult learners consistent with standards adopted by the state board of education.
   r.  Compliance with all relevant federal and state laws in the provision of services and supports to students with disabilities.
    Sec. 9.  Section 284.6, subsection 10, Code 2025, is amended to read as follows:
   10.  If funds are allocated for purposes of professional development pursuant to section 284.13, subsection 1, paragraph “c”, the department shall, in collaboration with the area education agencies, establish teacher development academies for public and nonpublic school-based teams of teachers and instructional leaders. Each academy shall include an institute and shall provide follow-up training and coaching.
    Sec. 10.  REPEAL.  2024 Iowa Acts, chapter 1002, sections 13, 14, and 19, are repealed.
DIVISION III
AREA EDUCATION AGENCIES —— FUNDING

    Sec. 11.  Section 257.9, Code 2025, is amended by adding the following new subsection:
   NEW SUBSECTION.  9A.  Area education agency professional development supplement state cost per pupil.  For the budget year beginning July 1, 2009, for the area education agency professional development supplement state cost per pupil, the department of management shall add together the professional development allocation made to each area education agency for the fiscal year beginning July 1, 2008, pursuant to section 284.13, subsection 1, paragraph “d”, Code 2009, and divide that sum by the statewide special education support services weighted enrollment for the fiscal year beginning July 1, 2009. The area education agency professional development supplement state cost per pupil for the budget year beginning July 1, 2010, and succeeding budget years, shall be the amount calculated by the department of management under this subsection for the base year plus a supplemental state aid amount that is equal to the professional development supplement categorical state percent of growth, pursuant to section 257.8, subsection 2, for the budget year, multiplied by the amount calculated by the department of management under this subsection for the base year.
    Sec. 12.  Section 257.10, subsection 7, Code 2025, is amended to read as follows:
   7.  Special education support services district cost.  Special education support services district cost for a school district for a budget year is equal to the special education support services district cost per pupil for the budget year multiplied by the special education support services weighted enrollment for the district for the budget year. If the special education support services district cost for a school district for a budget year is less than the special education support services district cost for that district for the base year, the department of management shall adjust the special education support services district cost for that district for the budget year to equal the special education support services district cost for the base year. Funds calculated under this subsection and received by a school district shall be used for special education support services. For budget years beginning on or after July 1, 2025, not less than ninety percent of funds calculated under this subsection and received by a school district shall be used by the school district for special education support services contracted from an area education agency. The contract between the school district and the area education agency shall not require the school district to describe the specific special education support services the school district will receive from the area education agency. The special education services provided by the area education agency to the school district pursuant to the contract shall not be limited by the amount of funding the school district provided to the area education agency.
    Sec. 13.  Section 257.16, subsection 4, Code 2025, is amended to read as follows:
   4.  Notwithstanding any provision to the contrary, if the governor orders budget reductions in accordance with section 8.31, the teacher salary supplement district cost, the professional development supplement district cost, the early intervention supplement district cost, and the teacher leadership supplement district cost as calculated under section 257.10, subsections 9, 10, 11, and 12, and the area education agency teacher salary supplement district cost and the area education agency professional development supplement district cost as calculated under section 257.37A, subsections 1 and 2, shall be paid in full as calculated and the reductions in the appropriations provided in accordance with this section shall be reduced from the remaining moneys appropriated pursuant to this section and shall be distributed on a per pupil basis calculated with the weighted enrollment determined in accordance with section 257.6, subsection 5.
    Sec. 14.  Section 257.35, subsection 1, paragraph a, subparagraph (3), Code 2025, is amended by striking the subparagraph and inserting in lieu thereof the following:
   (3)  For the fiscal year beginning July 1, 2025, and each fiscal year thereafter, the department of management shall deduct the amounts calculated for special education support services, media services, area education agency teacher salary supplement district cost, area education agency professional development supplement district cost, and educational services for each school district from the state aid due to the district pursuant to this chapter and shall pay the amounts to the respective area education agencies on a monthly basis from September 15 through June 15 during each school year. The department of management shall notify each school district of the amount of state aid deducted for these purposes and the balance of state aid shall be paid to the district. If a district does not qualify for state aid under this chapter in an amount sufficient to cover its amount due to the area education agency as calculated by the department of management, the school district shall pay the deficiency to the area education agency from other moneys received by the district, on a quarterly basis during each school year.
    Sec. 15.  Section 257.35, subsection 2, Code 2025, is amended to read as follows:
   2.  Notwithstanding the deduction and payment under subsection 1, the amounts specified for school districts and area education agencies in subsection 1, paragraph “a”, for the fiscal year beginning July 1, 2024, and each succeeding fiscal year, shall be reduced by the department of management by seven million five hundred thousand dollars. The department of management shall calculate a reduction such that such amounts shall be reduced proportionally to the amount that the district or agency would otherwise have received under this section if the reduction imposed pursuant to this subsection did not apply.
    Sec. 16.  Section 257.35, subsection 17, paragraph b, Code 2025, is amended to read as follows:
   b.  Notwithstanding subsection 1, and in addition to the reductions applicable pursuant to subsection 2 and paragraph “a” of this subsection, the state aid for area education agencies and the portion of the combined district cost calculated for these agencies related to professional development expenditures for the fiscal year beginning July 1, 2022, and ending June 30, 2023, shall be reduced by the department of management by an amount equal to the sum of the area education agency professional development supplement district cost for all area education agencies determined under section 257.37A, subsection 2, Code 2022, for the budget year beginning July 1, 2022. The reduction for each area education agency shall be equal to the area education agency’s professional development district cost determined under section 257.37A, subsection 2, Code 2022, for the budget year beginning July 1, 2022. The amounts reduced under this paragraph shall be considered funds paid to school districts and area education agencies under chapter 284 for purposes of requirements for providing professional development opportunities.
    Sec. 17.  Section 257.36, subsection 1, Code 2025, is amended to read as follows:
   1.  Notwithstanding chapters 256B and 273 and sections of this chapter relating to the moneys available to school districts and area education agencies for special education support services, for each school year, the department of education may direct the department of management to deduct amounts from the portions of school district budgets that fund special education support services in an area education agency. The total amount deducted for a school district in an area shall be based upon excess special education support services unreserved and undesignated fund balances in that school district or paid by the school district to an area education agency for a school year that remain unreserved and undesignated as determined by the department of education. The department of management shall determine the amount deducted from each school district in an area education agency on a proportional basis. The department of management shall determine from the amounts deducted from the portions of school district budgets that fund area education agency special education support services the amount that would have been local property taxes and the amount that would have been state aid and for the next following budget year shall increase the district’s total state school aid available under this chapter for area education agency special education support services and reduce the district’s property tax levy for area education agency special education support services by the amount necessary for the property tax portion of the deductions made under this section during the budget year.
    Sec. 18.  Section 257.37, Code 2025, is amended to read as follows:
   257.37  Funding media and educational services.
   Media services and educational services provided by a school district or through the area education agency agencies shall be funded, to the extent provided, by an addition to the combined district cost of each school district, determined as follows:
   1.  For the budget year beginning July 1, 1991, and succeeding budget years, the total amount funded in each area for media services shall be computed as provided in this subsection. For the budget year beginning July 1, 1991, the total amount funded in each area for media services in the base year shall be divided by the enrollment served in the base year to provide an area media services cost per pupil in the base year, and the department of management shall compute the state media services cost per pupil in the base year which is equal to the average of the area media services costs per pupil in the base year. For the budget year beginning July 1, 1991, and succeeding budget years, the department of management shall compute the supplemental state aid for media services in the budget year by multiplying the state media services cost per pupil in the base year times the state percent of growth for the budget year, and the total amount funded in each area for media services cost in the budget year equals the area media services cost per pupil in the base year plus the supplemental state aid for media services in the budget year times the enrollment served in the budget year. For fiscal years beginning before July 1, 2025, funds Funds shall be paid to area education agencies as provided in section 257.35. For fiscal years beginning on or after July 1, 2024, funds not required to be paid to an area education agency may be used by the school district for any school district general fund purpose.
   2.  Up to thirty percent of the budget of an area for media services may be expended for media resource material including the purchase or replacement of material required in section 273.6, subsection 1. Funds shall be paid to area education agencies as provided in section 257.35.
   3.  For the budget year beginning July 1, 1991, and succeeding budget years, the total amount funded in each area for educational services shall be computed as provided in this subsection. For the budget year beginning July 1, 1991, the total amount funded in each area for educational services in the base year shall be divided by the enrollment served in the area in the base year to provide an area educational services cost per pupil in the base year, and the department of management shall compute the state educational services cost per pupil in the base year, which is equal to the average of the area educational services costs per pupil in the base year. For the budget year beginning July 1, 1991, and succeeding budget years, the department of management shall compute the supplemental state aid for educational services by multiplying the state educational services cost per pupil in the base year times the state percent of growth for the budget year, and the total amount funded in each area for educational services for the budget year equals the area educational services cost per pupil for the base year plus the supplemental state aid for educational services in the budget year times the enrollment served in the area in the budget year. For fiscal years beginning before July 1, 2025, funds Funds shall be paid to area education agencies as provided in section 257.35. For fiscal years beginning on or after July 1, 2024, funds not required to be paid to an area education agency may be used by the school district for any school district general fund purpose.
   4.  “Enrollment served” means the basic enrollment of all school districts within the boundaries of the area education agency plus the number of nonpublic school pupils served by the area education agency with media services or educational services, as applicable, except that if a nonpublic school pupil or a pupil attending another district under a whole grade sharing agreement or open enrollment receives services through an area other than the area of the pupil’s residence, the pupil shall be deemed to be served by the area of the pupil’s residence, which shall by contractual arrangement reimburse the area through which the pupil actually receives services. Each school district shall include in the enrollment report submitted pursuant to section 257.6, subsection 1, the number of nonpublic school pupils within each school district for media and educational services served by the area. However, the school district shall not include in the enrollment report nonpublic school pupils receiving classes or services funded entirely by federal grants or allocations.
   5.  a.  If an area education agency does not serve nonpublic school pupils in a manner comparable to services provided public school pupils for media and educational services, as determined by the state board of education, the state board shall instruct the department of management to reduce the funds for media services and educational services within the area one time by an amount to compensate for such reduced services. The media services budget shall be reduced by an amount equal to the product of the cost per pupil in basic enrollment for the budget year for media services times the difference between the enrollment served and the basic enrollment recorded for the area. The educational services budget shall be reduced by an amount equal to the product of the cost per pupil in basic enrollment for the budget year for educational services times the difference between the enrollment served and the basic enrollment recorded for the area.
   b.  This subsection applies only to media and educational services which cannot be diverted for religious purposes.
   c.  Notwithstanding this subsection, an area education agency shall distribute to nonpublic schools media materials purchased wholly or partially with federal funds in a manner comparable to the distribution of such media materials to public schools as determined by the director of the department of education.
   6.  For the budget year beginning July 1, 2002, and each succeeding budget year, notwithstanding the requirements of this section for determining the budgets and funding of media services and education services, an area education agency or school district may, within the limits of the total of the funds provided for the budget years pursuant to section 257.35, expend for special education support services an amount that exceeds the payment for special education support services pursuant to section 257.35 in order to maintain the level of required special education support services in the area education agency or the school district, as applicable.
    Sec. 19.  Section 257.37A, Code 2025, is amended to read as follows:
   257.37A  Area education agency salary supplement funding.
   1.  Area education agency teacher salary supplement cost per pupil and district cost.
   1.  a.  For the budget year beginning July 1, 2009, the department of management shall add together the teacher compensation allocation made to each area education agency for the fiscal year beginning July 1, 2008, pursuant to section 284.13, subsection 1, paragraph “i”, Code 2009, and the phase II allocation made to each area education agency for the fiscal year beginning July 1, 2008, pursuant to section 294A.9, Code 2009, and divide that sum by the special education support services weighted enrollment in the fiscal year beginning July 1, 2009, to determine the area education agency teacher salary supplement cost per pupil. For the budget year beginning July 1, 2010, and succeeding budget years, the area education agency teacher salary supplement district cost per pupil for each area education agency for a budget year is the area education agency teacher salary supplement district cost per pupil for the base year plus the area education agency teacher salary supplement supplemental state aid amount for the budget year.
   2.  b.  For the budget year beginning July 1, 2010, and succeeding budget years, if the department of management determines that the unadjusted area education agency teacher salary supplement district cost of an area education agency for a budget year is less than one hundred percent of the unadjusted area education agency teacher salary supplement district cost for the base year for the area education agency, the area education agency shall receive a budget adjustment for that budget year equal to the difference.
   3.  a.  c.  (1)  The unadjusted area education agency teacher salary supplement district cost is the area education agency teacher salary supplement district cost per pupil for each area education agency for a budget year multiplied by the special education support services weighted enrollment for that area education agency.
   b.  (2)  The total area education agency teacher salary supplement district cost is the sum of the unadjusted area education agency teacher salary supplement district cost plus the budget adjustment for that budget year.
   4.  d.  For the budget year beginning July 1, 2009, the use of the funds calculated under this section subsection shall comply with requirements of chapter 284 and shall be distributed to teachers pursuant to section 284.3A. For the budget year beginning July 1, 2010, and succeeding budget years, the use of the funds calculated under this section subsection shall comply with the requirements of chapter 284 and shall be distributed to teachers pursuant to section 284.3A.
   2.  Area education agency professional development supplement cost per pupil and district cost.
   a.  For the budget year beginning July 1, 2009, the department of management shall divide the area education agency professional development supplement made to each area education agency for the fiscal year beginning July 1, 2008, pursuant to section 284.13, subsection 1, paragraph “d”, Code 2009, by the special education support services weighted enrollment in the fiscal year beginning July 1, 2009, to determine the professional development supplement cost per pupil. For the budget year beginning July 1, 2010, and succeeding budget years, the area education agency professional development supplement district cost per pupil for each area education agency for a budget year is the area education agency professional development supplement district cost per pupil for the base year plus the area education agency professional amount for the budget year.
   b.  For the budget year beginning July 1, 2010, and succeeding budget years, if the department of management determines that the unadjusted area education agency professional development supplement district cost of an area education agency for a budget year is less than one hundred percent of the unadjusted area education agency professional development supplement district cost for the base year for the area education agency, the area education agency shall receive a budget adjustment for that budget year equal to the difference.
   c.  (1)  The unadjusted area education agency professional development supplement district cost is the area education agency professional development supplement district cost per pupil for each area education agency for a budget year multiplied by the special education support services weighted enrollment for that area education agency.
   (2)  The total area education agency professional development supplement district cost is the sum of the unadjusted area education agency professional development supplement district cost plus the budget adjustment for that budget year.
   d.  The use of the funds calculated under this subsection shall comply with the requirements of chapter 284.
    Sec. 20.  Section 284.3A, subsection 4, Code 2025, is amended to read as follows:
   4.  The teacher salary supplement district cost as calculated under section 257.10, subsection 9, and the area education agency teacher salary supplement district cost as calculated under section 257.37A, subsection 1, are not subject to a uniform reduction in accordance with section 8.31.
    Sec. 21.  Section 284.4, subsection 1, paragraph b, subparagraph (3), Code 2025, is amended to read as follows:
   (3)  Determine, following the adoption of the Iowa professional development model by the state board of education, the use and distribution of the professional development funds calculated and paid to the school district or agency as provided in section 257.9, subsection 9A, or section 257.10, subsection 10, based upon school district or agency, attendance center, and individual teacher and professional development plans.
    Sec. 22.  Section 284.6, subsections 8 and 9, Code 2025, are amended to read as follows:
   8.  For each year in which a school district receives funds calculated and paid to school districts for professional development pursuant to section 257.10, subsection 10, or section 257.37A, subsection 2, the school district shall create quality professional development opportunities. Not less than thirty-six hours in the school calendar, held outside of the minimum school day, shall be set aside during nonpreparation time or designated professional development time to allow practitioners to collaborate with each other to deliver educational programs and assess student learning, or to engage in peer review pursuant to section 284.8, subsection 1. The funds may be used to implement the professional development provisions of the teacher career paths and leadership roles specified in section 284.15, including but not limited to providing professional development to teachers, including additional salaries for time beyond the normal negotiated agreement; activities and pay to support a beginning teacher mentoring and induction program that meets the requirements of section 284.5; pay for substitute teachers, professional development materials, speakers, and professional development content; textbooks and curriculum materials used for classroom purposes if such textbooks and curriculum materials include professional development; administering assessments pursuant to section 256.7, subsection 21, paragraph “b”, subparagraphs (1) and (2), if such assessments include professional development; and costs associated with implementing the individual professional development plans. The use of the funds shall be balanced between school district, attendance center, and individual professional development plans, making every reasonable effort to provide equal access to all teachers.
   9.  Moneys received pursuant to section 257.10, subsection 10, or section 257.37A, subsection 2, shall be maintained as a separate listing within a school district’s or area education agency’s budget for funds received and expenditures made pursuant to this subsection. The department shall not require a school district or area education agency to allocate a specific amount or percentage of moneys received pursuant to section 257.10, subsection 10, or section 257.37A, subsection 2, for professional development related to implementation of the core curriculum under section 256.7, subsection 26. A school district shall certify to the department how the school district allocated the funds and that moneys received under this subsection were used to supplement, not supplant, the professional development opportunities the school district would otherwise make available. For budget years beginning on or after July 1, 2017, all or a portion of the moneys received pursuant to section 257.10, subsection 10, that remain unexpended and unobligated at the end of a fiscal year may, pursuant to section 257.10, subsection 10, paragraph “d”, be transferred for deposit in the school district’s flexibility account established under section 298A.2, subsection 2.
    Sec. 23.  EFFECTIVE DATE.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 24.  APPLICABILITY.  This division of this Act applies July 1, 2025, for school budget years beginning on or after that date.
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, including by modifying provisions related to the duties and powers of area education agencies, the department of education, and area education agency funding.
   DIVISION I —— DIVISION OF SPECIAL EDUCATION OF THE DEPARTMENT OF EDUCATION. Current law requires the director of the department of education to develop and distribute to school districts, accredited nonpublic schools, and area education agencies a list of evidence-based professional development services that an area education agency may provide to a public school or accredited nonpublic school. The bill strikes these provisions.
   Current law requires the division of special education within the department of education to oversee the operation of each area education agency to ensure the area education agency complies with all applicable federal and state laws related to special education; develop and distribute to school districts and accredited nonpublic schools a process to facilitate the development of individualized education programs and assist individualized education program teams with decisions regarding free appropriate public education and placement for students enrolled in accredited nonpublic schools; provide professional learning and other support materials and tools for individualized education program teams; provide information to individualized education program teams and public agencies that nonpublic schools shall be considered a placement option so long as the individualized education program of a child with a disability does not require some other arrangement; develop and distribute to school districts professional learning and other materials for meaningful consultation for representatives of area education agencies, school districts, and accredited nonpublic schools; establish sustainable accountability and data collection systems related to special education; and develop and distribute to school districts and accredited nonpublic schools an implementation plan related to identifying, evaluating, and promoting strategies and models for providing special education and related services with accredited nonpublic schools. The bill strikes these provisions.
   DIVISION II —— AREA EDUCATION AGENCIES —— GENERAL PROVISIONS. Current law provides that each area education agency is under the general supervision of the director of the department of education and that the area education agency board of directors serves in an advisory capacity. The bill provides that each area education agency is governed by a board of directors. The bill makes conforming changes.
   The bill modifies provisions related to students that an area education agency may provide services to. Current law provides that an area education agency may furnish evidence-based professional development services to public or nonpublic schools which are on the list of accredited schools if certain specified requirements are satisfied. The bill strikes this provision.
   Current law requires area education agencies to prepare a proposed annual budget and submit the proposed budget to the director of the department of education for approval not later than March 1 of each year. Under current law, the director is required to either approve or reject the proposed budget for changes within 10 days after submission. The bill modifies this provision to require area education agencies to prepare a proposed annual budget and post notice of a public hearing on the proposed budget on the area education agency’s internet site and by publication in the newspaper of general circulation in the territory of the area education agency in which the principal place of business of a school district that is part of the area education agency is located. The notice shall specify the date, which shall be not later than March 1 of each year, the time, and the location of the public hearing.
   Current law requires an area education agency to, on a quarterly basis, prepare and submit to each school district that receives services from the area education agency a report that includes certain specified financial and programmatic information. The bill strikes this provision.
   Current law requires that the director of special education within each area education agency be an employee of the division of special education of the department of education and not be an employee of the area education agency, receive compensation from the area education agency, supervise or manage employees of the area education agency, or directly provide special education services for the agency. Current law also provides that the director of special education’s primary job duties and responsibilities to the area education agency are to provide oversight of the area education agency’s special education services. The bill strikes these provisions.
   The bill modifies provisions related to the standards used by the state board of education for the accreditation of area education agencies.
   The bill repeals certain specified provisions of 2024 Iowa Acts, chapter 1002, related to the accreditation of area education programs that were to take effect July 1, 2025.
   DIVISION III —— AREA EDUCATION AGENCIES —— FUNDING. The bill modifies provisions related to the calculation of the area education agency professional development supplement state cost per pupil.
   Current law provides that funds calculated under Code section 257.10(7) (special education support services district cost) and received by a school district are required to be used for special education support services. Current law also provides that for budget years beginning on or after July 1, 2025, not less than 90 percent of funds calculated under Code section 257.10(7) and received by a school district are required to be used by the school district for special education support services contracted from an area education agency. The contract between the school district and the area education agency shall not require the school district to describe the specific special education support services the school district will receive from the area education agency. The special education services provided by the area education agency to the school district pursuant to the contract shall not be limited by the amount of funding the school district provided to the area education agency. The bill strikes these provisions.
   The bill provides that for the fiscal year beginning July 1, 2025, and each fiscal year thereafter, the department of management is required to deduct the amounts calculated for special education support services, media services, area education agency teacher salary supplement district cost, area education agency professional development supplement district costs, and educational services for each school district from the state aid due to the district pursuant to Code chapter 257 and pay the amounts to the respective area education agencies on a monthly basis from September 15 through June 15 during each school year. The bill requires the department of management to notify each school district of the amount of state aid deducted for these purposes and the balance of state aid is required to be paid to the district. If a district does not qualify for state aid under Code chapter 257 in an amount sufficient to cover its amount due to the area education agency as calculated by the department of management, the school district is required to pay the deficiency to the area education agency from other moneys received by the district, on a quarterly basis during each school year.
   Current law provides that, notwithstanding the deduction and payment called for under Code section 257.35(1), the amounts specified for school districts and area education agencies in Code section 257.35(1)(a) for the fiscal year beginning July 1, 2024, and each succeeding fiscal year, shall be reduced by the department of management by $7.5 million. The bill provides that this reduction does not apply to fiscal years after the fiscal year beginning July 1, 2024.
   The bill modifies provisions related to moneys available to school districts and area education agencies for special education support services and the funding and provisions related to the media and educational services provided by school districts or through area education agencies, including by modifying Code section 257.37 (funding media and educational services) to strike a provision that state funds that are not required to be paid to an area education agency may be used by the school district for any school district general fund purpose and by modifying the definition of “enrollment served” in Code section 257.37.
   The bill modifies Code section 257.37A (area education agency salary supplement funding), including by providing that, if the department of management determines that the unadjusted area education agency professional development supplement district cost of an area education agency for a budget year is less than 100 percent of the unadjusted area education agency professional development supplement district cost for the base year for the area education agency, the area education agency shall receive a budget adjustment for that budget year equal to the difference.
   The division takes effect upon enactment and applies July 1, 2025, for school budget years beginning on or after that date.