Bill Text: IA HF599 | 2015-2016 | 86th General Assembly | Enrolled
Bill Title: A bill for an act relating to the division of assets and liabilities of school districts involved in a reorganization or dissolution and including applicability provisions. Effective 7-1-15.
Spectrum: Committee Bill
Status: (Passed) 2015-05-01 - Signed by Governor. H.J. 976. [HF599 Detail]
Download: Iowa-2015-HF599-Enrolled.html
House File 599 - Enrolled
HOUSE FILE
BY COMMITTEE ON EDUCATION
(SUCCESSOR TO HSB 206)
\5
A BILL FOR
\1
House File 599
AN ACT
RELATING TO THE DIVISION OF ASSETS AND LIABILITIES OF SCHOOL
DISTRICTS INVOLVED IN A REORGANIZATION OR DISSOLUTION AND
INCLUDING APPLICABILITY PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
Section 1. Section 275.12, Code 2015, is amended by adding
the following new subsection:
NEW SUBSECTION. 4A. a. The area education agency board in
reviewing a petition as provided in sections 275.15 and 275.16
that is not subject to the division of assets and liabilities
provisions in sections 275.29 through 275.31 shall review the
proposal for dividing liability for payment of outstanding
bonds issued under section 423E.5 or 423F.4, required to be
included under section 275.28, and may change or amend the
proposal in any manner, including to specify a different
division for the reorganized districts or a different method of
payment or retirement of the bonds as may be required by law,
justice, equity, and the interest of the people. The review
conducted by the area education agency, including any resulting
change to the proposal, shall ensure that the reorganized
district's estimated revenue under section 423F.2 is sufficient
for the payment of principal and interest on the outstanding
bonds required to be paid in the budget year following the
reorganization.
b. For bonds issued under section 423E.5 or 423F.4, the
approval of the reorganization at election creates a lien on
the revenues from the secure an advanced vision for education
fund received by the reorganized district designated in the
proposal approved by the area education agency, subject to the
same priority as provided by the affected school district that
issued the bonds.
Sec. 2. Section 275.28, Code 2015, is amended to read as
follows:
275.28 Plan of division of assets and liabilities.
In addition to setting up the territory to comprise the
reorganized districts, a reorganization petition may shall
provide for a division of assets and liabilities of the old
districts between affected among the reorganized districts. If
no provision is made in the petition for division of assets and
liabilities, or if However, if territory is excluded from the
reorganized district by the petition or by the area education
agency board of directors, the division of all assets and
liabilities shall be made under the provisions of sections
275.29 to 275.31.
Sec. 3. Section 275.29, Code 2015, is amended to read as
follows:
275.29 Division of assets and liabilities after
reorganization.
1. Between July 1 and July 20, or on a date determined by
agreement of the initial board and the boards of districts
receiving territory of the school districts affected, but
not later than August 30, the initial board of directors of
the newly formed school district shall meet with the boards
of the school districts affected by the organization of the
new school corporation, including the boards of districts
receiving territory of the school districts affected, for the
purpose of reaching joint agreement on an equitable division
of the assets of the several school corporations or parts
of school corporations and an equitable distribution of the
liabilities of the school districts affected corporations or
parts of corporations. In addition, if outstanding bonds
are general obligation indebtedness is in existence in any
district, the initial board of directors of the newly formed
school district shall meet with the boards of all school
districts affected prior to April 15 prior to the school year
the reorganization is effective to determine the distribution
of liability for payment of the general obligation bonded
indebtedness between the districts so that the newly formed
district may certify its budget under the procedures specified
in chapter 24. The boards shall consider the mandatory levy
required in section 76.2 and shall assure the satisfaction of
outstanding obligations of each affected school corporation.
If the petition includes plans for the distribution of the
bonded indebtedness, the exclusion of territory from the
reorganized district does not require action pursuant to this
section. If a school district affected by the reorganization
has outstanding bonds issued under section 423E.5 or 423F.4,
the joint agreement shall assure that the estimated revenue
under section 423F.2 for each district to which liability for
payment of such bonds is assigned is sufficient for the payment
of principal and interest on the outstanding bonds required to
be paid in the budget year following reorganization.
2. For bonds issued under section 423E.5 or 423F.4, the
approval of the joint agreement creates a lien on the revenues
from the secure an advanced vision for education fund received
by the school district to which liability is assigned, subject
to the same priority as provided by the affected school
district that issued the bonds.
Sec. 4. Section 275.30, Code 2015, is amended to read as
follows:
275.30 Arbitration.
1. If the boards cannot agree on such division and
distribution, the matters on which they differ shall be decided
by disinterested arbitrators, one selected by the initial board
of directors of the newly formed district, one by each of the
boards of directors of the school districts affected, and one
selected jointly by the boards of directors of contiguous
districts receiving territory of the school district districts
affected. If the number of arbitrators selected is even, a
disinterested arbitrator shall be added, and one selected by
the area education agency administrator.
2. The decision of the arbitrators shall be made in writing
and filed with the secretary of the new corporation, and
a party to the proceedings may appeal the decision to the
district court by serving notice on the secretary of the new
corporation within twenty days after the decision is filed.
The appeal shall be tried in equity and a decree entered
determining the entire matter, including the levy, collection,
and distribution of any necessary taxes.
3. a. If a school district affected by the reorganization
has outstanding bonds issued under section 423E.5 or 423F.4,
the arbitrators' decision and any decision of the court on
appeal shall assure that the estimated revenue under section
423F.2 for each district to which liability for payment of such
bonds is assigned is sufficient for the payment of principal
and interest on the outstanding bonds required to be paid in
the budget year following reorganization.
b. The issuance of the arbitrators' decision or court
decision on appeal creates a lien on the revenues from the
secure an advanced vision for education fund received by the
district to which the liability for payment of the bonds were
assigned, subject to the same priority as provided by the
affected school district that issued the bonds.
Sec. 5. Section 275.53, subsection 1, Code 2015, is amended
to read as follows:
1. The commission shall send a copy of its dissolution
proposal or shall inform the board that it cannot agree upon
a dissolution proposal not later than one year following the
date of the organizational meeting of the commission. If
the dissolving school district has outstanding bonds issued
under section 423E.5 or 423F.4, the proposal shall require
each school district receiving territory from the dissolving
district to assume liability for the payment of a portion
of such bonds that is equal to the percentage of the total
number of resident pupils from the dissolving district who
lived in the territory received during the last year of the
dissolving district's existence. The commission shall also
send a copy of the dissolution proposal to the boards of
directors of all school districts to which area of the affected
dissolving school district will be attached. If the board of
a district to which area of the affected dissolving school
district will be attached objects to the attachment, within
ten days following receipt of the dissolution proposal the
board shall send its objections in writing to the commission.
The commission may consider the objections and may modify the
dissolution proposal. If the dissolution proposal is modified,
the commission shall notify the boards of directors of all
school districts to which area of the affected dissolving
school district will be attached.
Sec. 6. Section 275.54, subsection 4, Code 2015, is amended
to read as follows:
4. a. If the board of a district to which area of the
affected dissolving school district will be attached objects
to the division of assets and liabilities contained in the
dissolution proposal, the matter shall be decided by a panel
of disinterested arbitrators. The panel shall consist of one
arbitrator selected jointly by each affected district districts
objecting to the provisions of the dissolution proposal, one
selected jointly by each the affected district districts in
favor of the provisions of the dissolution proposal, and one
selected by each the dissolving district. If the number of
arbitrators selected is even, a disinterested arbitrator
shall be selected by the administrator of the area education
agency to which the dissolving district or districts belong
belongs. The decision of the arbitrators shall be made in
writing and filed with the secretary of the new corporation
each affected school district. A party to the proceedings may
appeal the decision to the district court by serving notice
on the secretary of the new school corporation each affected
school district within twenty days after the decision is filed.
The appeal shall be tried in equity and a decree entered
determining the entire matter, including the levy, collection,
and distribution of any necessary taxes.
b. If the dissolving district has outstanding bonds issued
under section 423E.5 or 423F.4, the arbitrators' decision and
any decision of the court on appeal shall require each school
district receiving territory from the dissolving district to
assume liability for the payment of a portion of such bonds
that is equal to the percentage of the total number of resident
pupils from the dissolving district who lived in the territory
received during the last year of the dissolving district's
existence.
Sec. 7. Section 275.55, Code 2015, is amended by adding the
following new subsection:
NEW SUBSECTION. 5. For bonds issued under section 423E.5
or 423F.4, the approval of the dissolution at election creates
a lien on the revenues from the secure an advanced vision for
education fund received by the district to which liability
for payment of a portion of such bonds, subject to the same
priority as provided by the dissolving school district.
However, such a lien is limited to the extent required to
satisfy payments for the portion of the liability assigned to
the district.
Sec. 8. APPLICABILITY. This Act applies to reorganization
petitions and dissolution proposals filed under chapter 275 on
or after July 1, 2015.
KRAIG PAULSEN
Speaker of the House
PAM JOCHUM
President of the Senate
I hereby certify that this bill originated in the House and
is known as House File 599, Eighty=sixth General Assembly.
CARMINE BOAL
Chief Clerk of the House
Approved , 2015
TERRY E. BRANSTAD
Governor
-1-
