House File 2481 - Reprinted HOUSE FILE 2481 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 2438) (SUCCESSOR TO HSB 647) (As Amended and Passed by the House April 10, 2018 ) A BILL FOR An Act relating to school funding by modifying provisions 1 relating to the collection of sales tax for deposit in the 2 secure an advanced vision for education fund, provisions 3 relating to the use of tax revenue from the secure an 4 advanced vision for education fund, and provisions relating 5 to the calculation of the additional property tax levy, and 6 making appropriations. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 8 HF 2481 (4) 87 md/jh/md

H.F. 2481 Section 1. Section 257.2, subsection 8, Code 2018, is 1 amended by adding the following new paragraph: 2 NEW PARAGRAPH . e. Foundation base supplement payments 3 received under section 257.16C. 4 Sec. 2. Section 257.4, subsection 1, paragraph a, Code 2018, 5 is amended by adding the following new subparagraph: 6 NEW SUBPARAGRAPH . (10) The amount of the foundation base 7 supplement payment to be received by the school district under 8 section 257.16C. 9 Sec. 3. Section 257.4, subsection 1, paragraph b, Code 2018, 10 is amended to read as follows: 11 b. For the budget year beginning July 1, 2008, and 12 succeeding budget years, the department of management shall 13 annually determine an adjusted additional property tax levy 14 and a statewide maximum adjusted additional property tax 15 levy rate, not to exceed the statewide average additional 16 property tax levy rate, calculated by dividing the total 17 adjusted additional property tax levy dollars statewide by the 18 statewide total net taxable valuation. For purposes of this 19 paragraph, the adjusted additional property tax levy shall be 20 that portion of the additional property tax levy corresponding 21 to the state cost per pupil multiplied by a school district’s 22 weighted enrollment, and then multiplied by one hundred 23 percent less the regular program foundation base per pupil 24 percentage pursuant to section 257.1 , and then reduced by the 25 amount of the property tax replacement payment to be received 26 under section 257.16B and the amount of the foundation base 27 supplement payment to be received under section 257.16C . The 28 district shall receive adjusted additional property tax levy 29 aid in an amount equal to the difference between the adjusted 30 additional property tax levy rate and the statewide maximum 31 adjusted additional property tax levy rate, as applied per 32 thousand dollars of assessed valuation on all taxable property 33 in the district. The statewide maximum adjusted additional 34 property tax levy rate shall be annually determined by the 35 -1- HF 2481 (4) 87 md/jh/md 1/ 12

H.F. 2481 department taking into account amounts allocated pursuant to 1 section 257.15, subsection 4 , and the balance of the property 2 tax equity and relief fund created in section 257.16A at the 3 end of the calendar year. 4 Sec. 4. Section 257.15, subsection 4, paragraph b, Code 5 2018, is amended to read as follows: 6 b. After lowering all school district adjusted additional 7 property tax levy rates to the statewide maximum adjusted 8 additional property tax levy rate under paragraph “a” , the 9 department of management shall use any remaining funds at the 10 end of the calendar year to further lower additional property 11 taxes by increasing for the budget year beginning the following 12 July 1, the state regular program foundation base per pupil 13 percentage under section 257.1 . Moneys used pursuant to this 14 paragraph shall supplant an equal amount of the appropriation 15 made from the general fund of the state pursuant to section 16 257.16 that represents the increase in state foundation aid. 17 Sec. 5. NEW SECTION . 257.16C Foundation base supplement 18 fund. 19 1. A foundation base supplement fund is created as a 20 separate and distinct fund in the state treasury under the 21 control of the department of management. Moneys in the fund 22 include revenues credited to the fund, appropriations made to 23 the fund, and other moneys deposited into the fund. 24 2. a. There is appropriated annually from the fund to 25 the department of management an amount necessary to make all 26 foundation base supplement payments under this section. The 27 department of management shall calculate each school district’s 28 foundation base supplement payment based on the distribution 29 methodology under paragraph “b” . 30 b. The moneys available in a fiscal year in the foundation 31 base supplement fund shall be distributed by the department 32 of revenue to each school district on a per pupil basis 33 calculated using each school district’s weighted enrollment, 34 as defined in section 257.6, for that fiscal year. However, 35 -2- HF 2481 (4) 87 md/jh/md 2/ 12

H.F. 2481 the amount of a school district’s foundation base supplement 1 payment for a budget year shall not exceed an amount equal to 2 the school district’s weighted enrollment for the budget year 3 multiplied by the amount for the budget year calculated under 4 section 257.16B, subsection 2, paragraph “f” , subparagraph 5 (2), as enacted in 2018 Iowa Acts, House File 2230, §4, minus 6 the amount of the school district’s property tax replacement 7 payment under section 257.16B for the budget year. 8 3. Notwithstanding section 8.33, any moneys remaining in 9 the foundation base supplement fund at the end of a fiscal year 10 shall not revert to any other fund but shall remain in the 11 foundation base supplement fund for use as provided in this 12 section for the following fiscal year. 13 Sec. 6. NEW SECTION . 257.51 Career academy fund —— grant 14 program. 15 1. A career academy fund is created and established as 16 a separate and distinct fund in the state treasury under the 17 control of the department of education. 18 2. a. In addition to moneys deposited in the career 19 academy fund pursuant to section 423F.2, the department of 20 education may accept gifts, grants, bequests, and other private 21 contributions, as well as state or federal funds, and shall 22 deposit the moneys in the fund to be used for purposes of 23 this section. Moneys in the fund are appropriated to the 24 department of education and shall be used for the purposes of 25 this section. 26 b. Notwithstanding section 8.33, moneys in the fund 27 that remain unencumbered or unobligated at the close of the 28 fiscal year shall not revert but shall remain available for 29 expenditure for the purposes of this section in succeeding 30 fiscal years. Notwithstanding section 12C.7, subsection 2, 31 interest earned on moneys in the career academy fund shall be 32 credited to the fund. 33 3. The department of education shall adopt rules to 34 establish and administer a career academy grant program 35 -3- HF 2481 (4) 87 md/jh/md 3/ 12

H.F. 2481 to provide for the allocation of money in the fund in 1 the form of competitive grants, not to exceed one million 2 dollars per grant, to school corporations for career academy 3 infrastructure, career academy equipment, or both, in 4 accordance with the goals of this section and to further the 5 goals of the establishment and operation of career academies 6 under section 258.15. The rules adopted by the department 7 of education shall specify the eligibility of applicants 8 and eligible items for grant funding. Priority for grants 9 shall first be given to applications to establish new career 10 academies that are organized as regional career and technical 11 education planning partnerships pursuant to section 258.14 with 12 three or more school districts. Subsequent priority shall 13 be given to applications for expanding and updating existing 14 facilities and infrastructure to serve as career academies. 15 Sec. 7. Section 423.2, subsection 11, paragraph b, 16 subparagraph (3), Code 2018, is amended to read as follows: 17 (3) Transfer one-sixth of the remaining revenues to the 18 secure an advanced vision for education fund created in section 19 423F.2 . This subparagraph (3) is repealed December 31, 2029 20 January 1, 2050 . 21 Sec. 8. Section 423.2, subsection 14, Code 2018, is amended 22 to read as follows: 23 14. The sales tax rate of six percent is reduced to five 24 percent on January 1, 2030 2050 . 25 Sec. 9. Section 423.5, subsection 5, Code 2018, is amended 26 to read as follows: 27 5. The use tax rate of six percent is reduced to five 28 percent on January 1, 2030 2050 . 29 Sec. 10. Section 423.43, subsection 1, paragraph b, Code 30 2018, is amended to read as follows: 31 b. Subsequent to the deposit into the general fund of 32 the state and after the transfer of such revenues collected 33 under chapter 423B , the department shall transfer one-sixth of 34 such remaining revenues to the secure an advanced vision for 35 -4- HF 2481 (4) 87 md/jh/md 4/ 12

H.F. 2481 education fund created in section 423F.2 . This paragraph is 1 repealed December 31, 2029 January 1, 2050 . 2 Sec. 11. Section 423F.2, subsection 3, Code 2018, is amended 3 to read as follows: 4 3. a. The moneys available in a fiscal year in the secure 5 an advanced vision for education fund shall be distributed by 6 the department of revenue to each school district on a per 7 pupil basis calculated using each school district’s budget 8 enrollment, as defined in section 257.6 , for that fiscal year. 9 b. (1) Prior to distribution of moneys in the secure an 10 advanced vision for education fund to school districts, two 11 and one-tenths percent of the moneys available in a an amount 12 equal to the equity transfer amount for the fiscal year minus 13 the foundation base transfer amount for the fiscal year shall 14 be distributed and credited to the property tax equity and 15 relief fund created in section 257.16A, an amount equal to 16 the foundation base transfer amount shall be distributed and 17 credited to the foundation base supplement fund created in 18 section 257.16C, and an amount equal to the career academy 19 transfer amount for the fiscal year shall be distributed and 20 credited to the career academy fund created in section 257.51 . 21 (2) For purposes of this subsection, the equity transfer 22 amount is determined by multiplying the equity transfer 23 percentage by the amount of moneys available in the secure an 24 advanced vision for education fund in the fiscal year. 25 (a) For the fiscal year beginning July 1, 2017, the equity 26 transfer percentage is two and one-tenths percent. 27 (b) For each fiscal year beginning on or after July 1, 2018, 28 the equity transfer percentage is equal to the equity transfer 29 percentage for the immediately preceding fiscal year, unless 30 the amount of moneys available in the secure an advanced vision 31 for education fund in the fiscal year equals or exceeds one 32 hundred two percent of the amount of moneys available in the 33 fund for the immediately preceding fiscal year, in which case 34 the equity transfer percentage shall be the equity transfer 35 -5- HF 2481 (4) 87 md/jh/md 5/ 12

H.F. 2481 percentage for the immediately preceding fiscal year plus one 1 percent subject to the limitation in subparagraph division (c). 2 (c) If the equity transfer percentage calculated under 3 subparagraph division (b) exceeds twelve percent, the equity 4 transfer percentage for that fiscal year shall be twelve 5 percent. 6 (3) For purposes of this subsection, the foundation 7 base transfer amount equals the equity transfer amount for 8 the fiscal year under subparagraph (2) minus the sum of the 9 following: 10 (a) Two and one-tenths percent of the amount of the moneys 11 available in the secure an advanced vision for education fund 12 in the fiscal year. 13 (b) Two-thirds of the product of the equity transfer 14 percentage for the fiscal year minus two and one-tenths percent 15 multiplied by the moneys available in the secure an advanced 16 vision for education fund in the fiscal year. 17 (4) (a) For purposes of this subsection, the career academy 18 transfer amount for the fiscal year beginning July 1, 2018, is 19 one million dollars. 20 (b) For each fiscal year beginning on or after July 1, 21 2019, the career academy transfer amount is equal to the lesser 22 of five million dollars or the amount of the career academy 23 transfer amount for the immediately preceding fiscal year, 24 unless the amount of moneys available in the secure an advanced 25 vision for education fund in the fiscal year equals or exceeds 26 one hundred two and one-half percent of the amount of moneys 27 available in the fund for the immediately preceding fiscal 28 year, in which case the career academy transfer amount equals 29 the lesser of five million dollars or the sum of the amount 30 of the career academy transfer amount for the immediately 31 preceding fiscal year plus one-half percent of the amount of 32 moneys available in the secure an advanced vision for education 33 fund in the fiscal year following the deposit of revenues in 34 the property tax equity and relief fund and the foundation base 35 -6- HF 2481 (4) 87 md/jh/md 6/ 12

H.F. 2481 supplement fund. 1 Sec. 12. Section 423F.3, subsection 3, paragraph b, Code 2 2018, is amended to read as follows: 3 b. (1) If the board of directors intends to use funds for 4 purposes other than those listed in paragraph “a” , or change the 5 use of funds to purposes other than those listed in paragraph 6 “a” , the board shall adopt a revenue purpose statement or amend 7 an existing revenue purpose statement , subject to approval of 8 the electors, listing the proposed use of the funds. School 9 districts shall submit the statement to the voters no later 10 than sixty days prior to the expiration of any existing revenue 11 purpose statement or change in use not included in the existing 12 revenue purpose statement. 13 (2) (a) Notwithstanding any provision of law to the 14 contrary, for each school district with an existing revenue 15 purpose statement for the use of revenues from the secure an 16 advanced vision for education fund adopted under this paragraph 17 or adopted under another provision of law before July 1, 18 2018, such revenue purpose statement shall terminate and be 19 of no further force and effect on January 1, 2030, or the 20 expiration date of the revenue purpose statement, whichever is 21 earlier. If such a school district intends to use funds for 22 purposes other than those listed in paragraph “a” and does not 23 intend to operate without a revenue purpose statement on or 24 after January 1, 2030, or the expiration date of the revenue 25 purpose statement, whichever is earlier, the board of directors 26 shall submit a revenue purpose statement for approval by the 27 electors under subparagraph (1) on or after July 1, 2018, 28 and such revenue purpose statement submitted to the electors 29 shall include all proposed uses including those previously 30 approved by the electors, if applicable. The following, in 31 substantially the following form, shall be included in the 32 notice of the election published under paragraph “d” and 33 published on the school district’s internet site: 34 If a majority of eligible electors voting on the question 35 -7- HF 2481 (4) 87 md/jh/md 7/ 12

H.F. 2481 fail to approve this revenue purpose statement, revenues 1 received by the school district from the secure an advanced 2 vision for education fund shall first be expended for . . . . 3 (State the purposes in the order listed in subsection 1 and as 4 required by subsection 4 of this section for which the revenues 5 received by the school district under this chapter will be 6 expended.) 7 (b) Unless a new revenue purpose statement is adopted by 8 the electors, the existing revenue purpose statement remains 9 in effect until January 1, 2030, or the expiration date of the 10 revenue purpose statement, whichever is earlier. If a revenue 11 purpose statement is terminated under the provisions of this 12 subparagraph, such termination shall not affect the validity 13 of or a first lien on bonds issued under section 423E.5, Code 14 2018, or section 423F.5 prior to the date the revenue purpose 15 statement is terminated under subparagraph division (a), or 16 the validity of a contract or other obligation of the school 17 district secured in whole or in part by or requiring the 18 payment of funds received under this chapter in effect prior 19 to the date the revenue purpose statement is terminated under 20 subparagraph division (a). 21 Sec. 13. Section 423F.3, subsection 5, paragraph b, Code 22 2018, is amended to read as follows: 23 b. The infeasibility cost-benefit analysis of remodeling, 24 reconstructing, or repairing existing buildings. 25 Sec. 14. Section 423F.3, subsection 5, Code 2018, is amended 26 by adding the following new paragraph: 27 NEW PARAGRAPH . i. Benefits and effects of the new 28 construction on student learning. 29 Sec. 15. Section 423F.3, subsection 6, Code 2018, is amended 30 by adding the following new paragraph: 31 NEW PARAGRAPH . 0d. Additionally, “school infrastructure” 32 includes school safety and security infrastructure. For 33 purposes of this paragraph, “school safety and security 34 infrastructure” includes but is not limited to safe rooms, 35 -8- HF 2481 (4) 87 md/jh/md 8/ 12

H.F. 2481 remote entry technology and equipment, security camera systems, 1 card access systems, and communication systems with access to 2 fire and police emergency frequencies. For purposes of this 3 paragraph, “school safety and security infrastructure” does 4 not include the cost of personnel, development of safety and 5 security plans, or training related to the implementation of 6 safety and security plans. 7 Sec. 16. Section 423F.3, Code 2018, is amended by adding the 8 following new subsection: 9 NEW SUBSECTION . 6A. a. Prior to approving the use 10 of revenues received under this chapter for an athletic 11 facility infrastructure project within the scope of the 12 school district’s approved revenue purpose statement or 13 pursuant to subsection 4 for a school district without an 14 approved revenue statement, the board of directors shall adopt 15 a resolution setting forth the proposal for the athletic 16 facility infrastructure project and hold an additional public 17 hearing on the issue of construction of the athletic facility. 18 Notice of the time and place of the public hearing shall be 19 published not less than ten nor more than twenty days before 20 the public hearing in a newspaper which is a newspaper of 21 general circulation in the school district. If at any time 22 prior to the fifteenth day following the hearing, the secretary 23 of the board of directors receives a petition containing the 24 required number of signatures and asking that the question 25 of the approval of the use of revenues for the athletic 26 facility infrastructure project be submitted to the voters 27 of the school district, the board of directors shall either 28 rescind the board’s resolution for the use of revenues for 29 the athletic facility infrastructure project or direct the 30 county commissioner of elections to submit the question to the 31 registered voters of the school district at an election held 32 on a date specified in section 39.2, subsection 4, paragraph 33 “c” . The petition must be signed by eligible electors equal 34 in number to not less than one hundred or thirty percent of 35 -9- HF 2481 (4) 87 md/jh/md 9/ 12

H.F. 2481 the number of voters at the last preceding election of school 1 officials under section 277.1, whichever is greater. If a 2 majority of those voting on the question favors the use of the 3 revenues for the athletic facility infrastructure project, the 4 board shall be authorized to approve such use by resolution of 5 the board. If a majority of those voting on the question does 6 not favor the use of the revenues for the athletic facility 7 infrastructure project, the board of directors shall rescind 8 the board’s resolution for the use of revenues for the athletic 9 facility infrastructure project. If a petition is not received 10 by the board of directors within the prescribed time period, 11 the board of directors may approve the use of revenues for 12 the athletic facility infrastructure project without voter 13 approval. 14 b. After fourteen days from the date of the hearing under 15 paragraph “a” or fourteen days after the date of the election 16 held under paragraph “a” , if applicable, whichever is later, an 17 action shall not be brought questioning the board of directors’ 18 authority to use funds for the athletic facility infrastructure 19 project or questioning the legality of any proceedings in 20 connection with the authorization of such use. 21 c. For purposes of this subsection: 22 (1) “Athletic facility” means a building or structure, or 23 portion thereof, that is not physically attached to a student 24 attendance center. 25 (2) “Athletic facility infrastructure project” means a school 26 infrastructure project that includes in whole or in part the 27 construction of an athletic facility. 28 (3) “Construction” does not include repair or maintenance 29 of an existing facility. 30 Sec. 17. Section 423F.4, Code 2018, is amended to read as 31 follows: 32 423F.4 Borrowing authority for school districts. 33 1. A Subject to the conditions established under subsection 34 2, a school district may anticipate its share of the revenues 35 -10- HF 2481 (4) 87 md/jh/md 10/ 12

H.F. 2481 under section 423F.2 by issuing bonds in the manner provided in 1 section 423E.5 , Code 2018 . However, to the extent any school 2 district has issued bonds anticipating the proceeds of an 3 extended local sales and services tax for school infrastructure 4 purposes imposed by a county pursuant to former chapter 423E, 5 Code and Code Supplement 2007, prior to July 1, 2008, the 6 pledge of such revenues for the payment of principal and 7 interest on such bonds shall be replaced by a pledge of its 8 share of the revenues under section 423F.2 . 9 2. a. Bonds issued on or after July 1, 2018, shall not be 10 sold at public sale as provided in chapter 75, or at a private 11 sale, without notice and hearing. Notice of the time and place 12 of the public hearing shall be published not less than ten nor 13 more than twenty days before the public hearing in a newspaper 14 which is a newspaper of general circulation in the school 15 district. 16 b. For bonds subject to the requirements of paragraph 17 “a” , if at any time prior to the fifteenth day following the 18 hearing, the secretary of the board of directors receives a 19 petition containing the required number of signatures and 20 asking that the question of the issuance of such bonds be 21 submitted to the voters of the school district, the board shall 22 either rescind its adoption of the resolution or direct the 23 county commissioner of elections to submit the question to the 24 registered voters of the school district at an election held 25 on a date specified in section 39.2, subsection 4, paragraph 26 “c” . The petition must be signed by eligible electors equal 27 in number to not less than one hundred or thirty percent of 28 the number of voters at the last preceding election of school 29 officials under section 277.1, whichever is greater. If the 30 board submits the question at an election and a majority of 31 those voting on the question favors issuance of the bonds, the 32 board shall be authorized to issue the bonds. 33 c. After fourteen days from the date of the hearing under 34 paragraph “a” or fourteen days after the date of the election 35 -11- HF 2481 (4) 87 md/jh/md 11/ 12

H.F. 2481 held under paragraph “b” , if applicable, whichever is later, 1 an action shall not be brought questioning the legality of 2 any bonds or the power of the authority to issue any bonds 3 or to the legality of any proceedings in connection with the 4 authorization or issuance of the bonds. 5 Sec. 18. Section 423F.6, Code 2018, is amended to read as 6 follows: 7 423F.6 Repeal. 8 This chapter is repealed December 31, 2029 January 1, 2050 . 9 Sec. 19. STATE MANDATE FUNDING SPECIFIED. In accordance 10 with section 25B.2, subsection 3, the state cost of requiring 11 compliance with any state mandate included in this Act shall 12 be paid by a school district from state school foundation aid 13 received by the school district under section 257.16. This 14 specification of the payment of the state cost shall be deemed 15 to meet all of the state funding-related requirements of 16 section 25B.2, subsection 3, and no additional state funding 17 shall be necessary for the full implementation of this Act 18 by and enforcement of this Act against all affected school 19 districts. 20 -12- HF 2481 (4) 87 md/jh/md 12/ 12