SF 2183 (LSB 6045XS (5) 91)

SENATE FILE 2183

BY  SINCLAIR and DICKEY

A BILL FOR

An Act providing for the Iowa individual income tax checkoff for public schools and the public school checkoff fund, making appropriations, and providing for implementation of the checkoff on the return.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  257.52  Public school checkoff fund —— appropriation.
   1.  A public school fund is created in the state treasury under the control of the department of management. The fund is composed of moneys appropriated or available to and obtained or accepted by the treasurer of state for deposit in the fund. The fund shall include moneys transferred to the fund pursuant to an income tax checkoff provided in chapter 422, subchapter II, if applicable. Notwithstanding section 12C.7, subsection 2, interest earned on moneys in the fund shall be credited to and remain in the fund. Section 8.33 does not apply to moneys in the fund.
   2.  There is appropriated from the fund to the department of management for the fiscal year beginning July 1, 2027, and for each fiscal year thereafter, any moneys available in the fund to make the payments to school districts required under subsection 3.
   3.  The moneys appropriated to the department of management under this section shall be used to provide a funding supplement to each school district for the fiscal year beginning July 1, 2027, and for each fiscal year thereafter. The moneys available in a fiscal year in the fund shall be distributed by the department of management to each school district on a per pupil basis calculated using each school district’s budget enrollment, as defined in section 257.6, for that fiscal year.
   4.  The moneys received by a school district shall be miscellaneous income, shall be deposited in the general fund of the school district, may be used for any school general fund purpose during any school budget year beginning on or after July 1, 2027, and shall not be included in district cost.
    Sec. 2.  NEW SECTION.  422.12M  Income tax checkoff for public schools
   1.  A person who files an individual or a joint income tax return with the department of revenue under section 422.13 may designate one dollar or more to be paid to public schools to be distributed pursuant to section 257.52. If the refund due on the return or the payment remitted with the return is insufficient to pay the additional amount designated by the taxpayer to the public schools, the amount designated shall be reduced to the remaining amount remitted with the return. The designation of a contribution to public schools under this section is irrevocable.
   2.  The director of revenue shall draft the income tax form to allow the designation of contributions to public schools on the tax return. The department of revenue, on or before January 31, shall transfer the total amount designated on the tax return forms due in the preceding calendar year to the public school checkoff fund as provided in section 257.52. However, before a checkoff pursuant to this section shall be permitted, all liabilities on the books of the department and accounts identified as owing under section 421.65 shall be satisfied.
   3.  The department of revenue shall adopt rules to administer this section.
   4.  This section is subject to repeal under section 422.12E.
    Sec. 3.  IMPLEMENTATION.  The checkoff created in this Act shall be eligible for placement on the individual income tax return form for the tax year beginning January 1, 2026.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill provides that taxpayers filing individual income tax returns will be allowed to designate $1 or more on the return to be paid to the public school checkoff fund. The bill creates the public school checkoff fund in the state treasury under the control of the department of management (DOM). The bill requires the department of revenue to annually remit moneys collected from the checkoff to the fund. For the fiscal year beginning July 1, 2027, and each fiscal year thereafter, moneys available in the fund are appropriated to DOM to be used to provide a funding supplement to each school district during the fiscal year. The moneys shall be distributed by DOM to each school district on a per pupil basis calculated using each school district’s budget enrollment as defined in Code section 257.6. The moneys received by a school district from the checkoff shall be considered miscellaneous income and may be used for any general fund purpose and shall not be included in district cost.
   The bill provides that the checkoff is eligible for placement on the individual tax return form for the tax year beginning January 1, 2026, and that it is subject to repeal under Code section 422.12E, which allows no more than four checkoffs on the individual tax return form and provides for the automatic repeal of the two checkoffs receiving the least in contributions over a two-year period. Currently, there are two checkoffs that appear on the individual income tax return: the checkoff for the fish and game protection fund and the checkoff for the child abuse prevention program fund.