Bill Text: IA HF68 | 2023-2024 | 90th General Assembly | Enrolled

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Bill Title: A bill for an act relating to education programs and funding by establishing an education savings account program, modifying certain school district categorical funding supplements and supplementary weighting, making appropriations, providing penalties, and including effective date and retroactive applicability provisions. (Formerly HSB 1.) Effective date: 01/24/2023, 07/01/2023. Applicability date: 01/01/2023.

Spectrum: Committee Bill

Status: (Passed) 2023-05-24 - Fiscal note. [HF68 Detail]

Download: Iowa-2023-HF68-Enrolled.html

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House File 68 - Enrolled
House File 68
AN ACT
RELATING TO EDUCATION PROGRAMS AND FUNDING BY ESTABLISHING AN
EDUCATION SAVINGS ACCOUNT PROGRAM, MODIFYING CERTAIN SCHOOL
DISTRICT CATEGORICAL FUNDING SUPPLEMENTS AND SUPPLEMENTARY
WEIGHTING, MAKING APPROPRIATIONS, PROVIDING PENALTIES, AND
INCLUDING EFFECTIVE DATE AND RETROACTIVE APPLICABILITY
PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
DIVISION I
SHORT TITLE
Section 1. SHORT TITLE. This Act shall be known and may be
cited as the “Students First Act”.
DIVISION II
EDUCATION SAVINGS ACCOUNT PROGRAM
Sec. 2. Section 256.9, Code 2023, is amended by adding the
following new subsection:
NEW SUBSECTION . 66. Adopt rules relating to the
administration of, and applications for, the education savings
account program pursuant to section 257.11B, including but not
limited to application processing timelines and information
required to be submitted by a parent or guardian.

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Sec. 3. Section 257.10, subsection 9, paragraph c,
subparagraph (1), Code 2023, is amended to read as follows:
(1) The unadjusted teacher salary supplement district cost
is the teacher salary supplement district cost per pupil for
each school district for a budget year multiplied by the sum
of the budget enrollment for that school district plus the
number of resident pupils in the school district that received
an education savings account payment under section 257.11B for
the base year .
Sec. 4. Section 257.10, subsection 10, paragraph c,
subparagraph (1), Code 2023, is amended to read as follows:
(1) The unadjusted professional development supplement
district cost is the professional development supplement
district cost per pupil for each school district for a budget
year multiplied by the sum of the budget enrollment for that
school district plus the number of resident pupils in the
school district that received an education savings account
payment under section 257.11B for the base year .
Sec. 5. Section 257.10, subsection 11, paragraph c,
subparagraph (1), Code 2023, is amended to read as follows:
(1) The unadjusted early intervention supplement district
cost is the early intervention supplement district cost per
pupil for each school district for a budget year multiplied
by the sum of the budget enrollment for that school district
plus the number of resident pupils in the school district that
received an education savings account payment under section
257.11B for the base year .
Sec. 6. Section 257.10, subsection 12, paragraph c,
subparagraph (1), Code 2023, is amended to read as follows:
(1) The unadjusted teacher leadership supplement district
cost is the teacher leadership supplement district cost per
pupil for each school district for a budget year multiplied
by the sum of the budget enrollment for that school district
plus the number of resident pupils in the school district that
received an education savings account payment under section
257.11B for the base year .
Sec. 7. NEW SECTION . 257.11B Education savings account
program.
1. For purposes of this section:

House File 68, p. 3
a. “Nonpublic school” means the same as defined in section
285.16.
b. (1) “Qualified educational expenses” includes tuition
and fees at a nonpublic school, textbooks, fees or payments for
educational therapies, including tutoring or cognitive skills
training, curriculum fees, software, and materials for a course
of study for a specific subject matter or grade level, tuition
or fees for nonpublic online education programs, tuition for
vocational and life skills education approved by the department
of education, education materials and services for pupils with
disabilities from an accredited provider, including the cost of
paraprofessionals and assistants who are trained in accordance
with state law, standardized test fees, and advanced placement
examinations or examinations related to postsecondary education
admission or credentialing.
(2) “Qualified educational expenses” shall be limited to
the items described in subparagraph (1) and rules adopted
by the department to implement this section and does not
include transportation costs for the pupil, the cost of food
or refreshments consumed by the pupil, the cost of clothing
for the pupil, or the cost of disposable materials, including
but not limited to paper, notebooks, pencils, pens, and art
supplies.
c. “Resident” means the same as defined in section 282.1,
subsection 2.
2. a. (1) For the school budget year beginning July
1, 2023, the following pupils who attend a nonpublic school
for that school budget year shall be eligible to receive an
education savings account payment:
(a) A resident pupil who is eligible to enroll in
kindergarten.
(b) A resident pupil who is eligible to enroll in grades one
through twelve and was not enrolled in a nonpublic school for
the school year immediately preceding the school year for which
the education savings account payment is requested.
(c) A resident pupil who is eligible to enroll in grades
one through twelve and was enrolled in a nonpublic school year
immediately preceding the school year for which the education
savings account payment is requested if the pupil’s household

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has an annual income less than or equal to three hundred
percent of the most recently revised poverty income guidelines
published by the United States department of health and human
services.
(2) For the school budget year beginning July 1, 2024, the
following pupils who attend a nonpublic school for that school
budget year shall be eligible to receive an education savings
account payment:
(a) A resident pupil who is eligible to enroll in
kindergarten.
(b) A resident pupil who is eligible to enroll in grades one
through twelve and was not enrolled in a nonpublic school for
the school year immediately preceding the school year for which
the education savings account payment is requested.
(c) A resident pupil who is eligible to enroll in grades one
through twelve and was enrolled in a nonpublic school for the
school year immediately preceding the school year for which the
education savings account payment is requested if the pupil’s
household has an annual income less than or equal to four
hundred percent of the most recently revised poverty income
guidelines published by the United States department of health
and human services.
(d) A resident pupil who received an education savings
account payment in the immediately preceding school budget
year.
(3) For school budget years beginning on or after July
1, 2025, resident pupils eligible to enroll in kindergarten
through grade twelve who attend a nonpublic school for the
applicable school budget year shall be eligible to receive an
education savings account payment.
b. Education savings account payments shall be made
available to parents and guardians in the manner authorized
under subsection 5 for the payment of qualified educational
expenses as provided in this section. Parents and guardians
shall first use education savings account payments for all
qualified educational expenses that are tuition and fees for
which the parent or guardian is responsible for payment at the
pupil’s nonpublic school prior to using the education savings
account for other qualified educational expenses.

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3. a. On or after January 1, but on or before June 30,
preceding the school year for which the education savings
account payment is requested, the parent or guardian of an
eligible pupil may request an education savings account payment
by submitting an application to the department of education.
b. Within thirty days following submission of an
application, the department of education or third-party entity
shall notify the parent or guardian of each pupil approved
for the following school year and specify the amount of the
education savings account payment for the pupil, if known at
the time of the notice. As soon as practical following the
processing of all applications, the department of education or
third-party entity shall determine the number of pupils in each
school district approved for the school budget year and provide
such information to the department of management.
c. Education savings account payments shall only be approved
for one school year and applications must be submitted annually
for payments in subsequent school years.
4. Each education savings account payment shall be equal to
the regular program state cost per pupil for the same school
budget year.
5. An education savings account fund is created in
the state treasury under the control of the department of
education consisting of moneys appropriated to the department
of education for the purpose of providing education savings
account payments under this section. For the fiscal year
commencing July 1, 2023, and each succeeding fiscal year,
there is appropriated from the general fund of the state
to the department of education to be credited to the fund
the amount necessary to pay all education savings account
payments approved for that fiscal year. The director of the
department of education has all powers necessary to carry out
and effectuate the purposes, objectives, and provisions of this
section pertaining to the fund, including the power to do all
of the following:
a. Make and enter into contracts with a third-party entity
necessary for the administration of the program.
b. Procure insurance against any loss in connection with the
assets of the fund or require a surety bond.

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c. Contract with a qualified firm, including but not limited
to the third-party entity under paragraph “a” , to allocate
funds from each pupil’s account for the payment of qualified
educational expenses by the pupil’s parent or guardian.
d. Require the qualified firm under paragraph “c” to
offer the department of education the capability of automated
clearinghouse transactions, electronic commerce transactions,
reimbursement transactions, and debit card payments in order to
meet the diverse needs of participating parents and guardians
to pay for qualified educational expenses. The director of
the department of education shall determine which transaction
capabilities will be available to participating parents and
guardians.
e. Reduce the possibility of waste, fraud, and abuse,
and ensure that any technology platform used for the program
meets the state’s highest security requirements, including
compliance.
f. Conduct audits or other reviews necessary to properly
administer the program.
g. Adopt rules for the administration of the fund and
accounts within the fund.
6. a. For each pupil approved for an education savings
account payment, the department of education or third-party
entity shall establish an individual account for that pupil
in the education savings account fund. The amount of the
pupil’s education savings account payment shall be deposited
into the pupil’s individual account on July 15 or thirty days
following submission of the application, whichever is later,
and such amount shall be immediately available for the payment
of qualified educational expenses incurred by the parent or
guardian for the pupil during that fiscal year using a payment
method authorized under subsection 5.
b. A nonpublic school or other provider of qualified
educational expenses that accepts payment from a parent or
guardian using funds from a pupil’s individual account in the
fund shall not refund, rebate, or share any portion of such
payment with the parent, guardian, or pupil.
c. Moneys remaining in a pupil’s individual account
upon conclusion of the fiscal year shall remain in the

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pupil’s individual account for the payment of qualified
educational expenses in future fiscal years during which the
pupil participates in the program until the pupil becomes
ineligible under the program or until the remaining amounts are
transferred to the state general fund under subsection 8.
7. A person who makes a false claim for the purpose of
obtaining an education savings account payment or who knowingly
receives the payment or makes a payment from an individual
account within the fund without being legally entitled to do
so is guilty of a fraudulent practice under chapter 714. The
false claim for an education savings account or a payment from
an individual account shall be disallowed. The department of
education or third-party entity shall also close the pupil’s
individual account in the fund and transfer any remaining
moneys in the account for deposit in the general fund of the
state. If the improperly obtained amounts have been disbursed
from the applicable individual account, the department of
education or third-party entity shall recover such amounts
from the parent or guardian, including by initiating legal
proceedings to recover such amounts, if necessary. A parent or
guardian who commits a fraudulent practice under this section
is prohibited from participating in the education savings
account program in the future.
8. Moneys remaining in a pupil’s individual account when the
pupil graduates from high school or turns twenty years of age,
whichever occurs first, shall be transferred by the department
of education for deposit in the general fund of the state.
9. a. A parent may appeal to the state board of education
any administrative decision the department of education or
third-party entity makes pursuant to this section, including
but not limited to determinations of eligibility, allowable
expenses, and removal from the program. The department or
third-party entity shall notify the parent or guardian in
writing of the appeal process at the same time the department
notifies the parent or guardian of the administrative decision.
The state board of education shall establish the appeals
process consistent with chapter 17A and shall post such appeal
process information on the state board of education’s internet
site.

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b. The state board of education shall refer cases of
substantial misuse of education savings account program funds
to the attorney general for the purpose of collection or for
the purpose of a criminal investigation if the state board of
education obtains evidence of fraudulent use of an account.
10. a. This section shall not be construed to authorize
the state or any political subdivision of the state to exercise
authority over any nonpublic school or construed to require a
nonpublic school to modify its academic standards for admission
or educational program in order to receive payment from a
parent or guardian using funds from a pupil’s account in the
education savings account fund.
b. This section shall not be construed to expand the
authority of the state or any political subdivision of the
state to impose regulations upon any nonpublic school that are
not necessary to implement this section.
c. A nonpublic school that accepts payment from a parent or
guardian using funds from a pupil’s account in the education
savings account fund is not an agent of this state or of a
political subdivision of this state.
d. Rules adopted by the department of education to implement
this section that impose an undue burden on a nonpublic school
are invalid.
e. A nonpublic school that accepts payment from a parent or
guardian using funds from a pupil’s account in the education
savings account fund shall be given the maximum freedom
possible to provide for the educational needs of the school’s
students, consistent with state and federal law.
11. a. Each pupil participating in the education savings
account program is required to take all applicable state and
federally required student assessments and the results of
those assessments shall be provided to the pupil’s parents or
guardians and reported to the department of education.
b. The department of education shall compile all such
reported assessment results in order to analyze student
proficiency and academic progress among those pupils
participating in the program, including analysis of graduation
rates, proficiency, and progress based on grade level,
gender, race, and household income level. The results of the

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department’s analysis shall be included in the annual condition
of education report.
Sec. 8. Section 422.7, Code 2023, is amended by adding the
following new subsection:
NEW SUBSECTION . 44. Subtract, to the extent included, the
amount of an education savings account payment under section
257.11B received by the taxpayer for payment of qualified
educational expenses.
Sec. 9. EMERGENCY RULES. The department of education
may adopt emergency rules under section 17A.4, subsection 3,
and section 17A.5, subsection 2, paragraph “b”, to implement
the provisions of the section of this Act enacting section
256.9, subsection 66, and section 257.11B, and the rules shall
be effective immediately upon filing unless a later date is
specified in the rules. Any rules adopted in accordance with
this section shall also be published as a notice of intended
action as provided in section 17A.4.
Sec. 10. EFFECTIVE DATE. This division of this Act, being
deemed of immediate importance, takes effect upon enactment.
Sec. 11. RETROACTIVE APPLICABILITY. The following applies
retroactively to tax years beginning on or after January 1,
2023:
The section of this division of this Act enacting section
422.7, subsection 44.
DIVISION III
SCHOOL DISTRICT CATEGORICAL FUNDING
Sec. 12. Section 257.10, subsection 9, paragraph d, Code
2023, is amended to read as follows:
d. For the budget year beginning July 1, 2009, the use
of the funds calculated under this subsection shall comply
with the 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 subsection or available for
use as provided in subsection 10, paragraph “d” , subsection 12,
paragraph “d” , or section 257.46, subsection 3, shall comply
with the requirements of chapter 284 and shall be distributed
to teachers pursuant to section 284.3A and shall comply with
the requirements of chapter 284 related to such distribution

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under section 284.3A .
Sec. 13. Section 257.10, subsection 10, paragraph d, Code
2023, is amended to read as follows:
d. The use of the funds calculated under this subsection
and any amount designated for professional development purposes
from the school district’s flexibility account under section
298A.2, subsection 2 , shall comply with the requirements of
chapter 284 . If all professional development requirements of
chapter 284 are met and funds received under this subsection
remain unexpended and unobligated at the end of a fiscal year
beginning on or after July 1, 2017, the school district may
transfer all or a portion of such unexpended and unobligated
funds for deposit in the school district’s flexibility account
established under section 298A.2, subsection 2 . At the end
of a fiscal year beginning on or after July 1, 2022, the
school district may use all or a portion of funds under this
subsection for the purposes authorized under subsection 9,
paragraph “d” .
Sec. 14. Section 257.10, subsection 12, paragraph d, Code
2023, is amended to read as follows:
d. For Except as otherwise allowed under this paragraph,
for the budget year beginning July 1, 2014, and succeeding
budget years, the use of the funds calculated under this
subsection shall comply with the requirements of chapter 284
and shall be distributed to teachers pursuant to section
284.15 . The funds shall be used only to increase the payment
for a teacher assigned to a leadership role pursuant to a
framework or comparable system approved pursuant to section
284.15 ; to increase the percentages of teachers assigned to
leadership roles; to increase the minimum teacher starting
salary to thirty-three thousand five hundred dollars; to
cover the costs for the time mentor and lead teachers are not
providing instruction to students in a classroom; for coverage
of a classroom when an initial or career teacher is observing
or co-teaching with a teacher assigned to a leadership role;
for professional development time to learn best practices
associated with the career pathways leadership process; and for
other costs associated with a framework or comparable system
approved by the department of education under section 284.15

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with the goals of improving instruction and elevating the
quality of teaching and student learning. If all requirements
for the school district for the use of funds calculated
under this subsection are met and funds received under this
subsection remain unexpended and unobligated at the end of a
fiscal year beginning on or after July 1, 2020, the school
district may transfer all or a portion of such unexpended
and unobligated funds for deposit in the school district’s
flexibility account established under section 298A.2,
subsection 2 . At the end of a fiscal year beginning on or after
July 1, 2022, school districts may use all or a portion of
funds under this subsection for the purposes authorized under
subsection 9, paragraph “d” , and, notwithstanding any provision
of law to the contrary, school districts shall not be required
to participate in or comply with section 284.15 in order to
continue to receive funding under this subsection.
Sec. 15. Section 257.11, subsection 5, Code 2023, is amended
to read as follows:
5. Shared operational functions —— increased student
opportunities —— budget years beginning in 2014 through 2024
2034 .
a. (1) In order to provide additional funding to increase
student opportunities and redirect more resources to student
programming for school districts that share operational
functions, a district that shares with a political subdivision
one or more operational functions of a curriculum director,
master social worker, independent social worker, work-based
learning coordinator, special education director, mental health
professional who holds a statement of recognition issued by the
board of educational examiners, college and career transition
counselor or coordinator, school resource officer, or school
counselor, or one or more operational functions in the areas
of superintendent management, business management, human
resources, transportation, or operation and maintenance for at
least twenty percent of the school year shall be assigned a
supplementary weighting for each shared operational function.
A school district that shares an operational function in
the area of superintendent management shall be assigned a
supplementary weighting of nine pupils for the function. A

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school district that shares an operational function in the area
of business management, human resources, transportation, or
operation and maintenance shall be assigned a supplementary
weighting of five pupils for the function. A school district
that shares the operational functions of a curriculum director;
a master social worker or an independent social worker licensed
under chapters 147 and 154C ; a work-based learning coordinator;
a special education director; a mental health professional
who holds a statement of recognition issued by the board
of educational examiners; a college and career transition
counselor or coordinator; a school resource officer; or a
school counselor shall be assigned a supplementary weighting of
three pupils for the function. The additional weighting shall
be assigned for each discrete operational function shared.
However, a school district may receive the additional weighting
under this subsection for sharing the services of an individual
with a political subdivision or another school district even if
the type of operational function performed by the individual
for the school district and the type of operational function
performed by the individual for the political subdivision or
another school district are not the same operational function,
so long as either both operational functions are eligible for
weighting under this subsection or the operational function
the individual performs for the school district is special
education director. In either case, the school district
shall be assigned the additional weighting for the type of
operational function that the individual performs for the
school district, and the school district shall not receive
additional weighting for any other function performed by the
individual. The operational function sharing arrangement does
not need to be a newly implemented sharing arrangement to
receive supplementary weighting under this subsection .
(2) For the purposes of this paragraph “a” :
(a) “College and career transition counselor or coordinator”
means a licensed school counselor or an appropriately trained
individual responsible for providing direct services to
students, parents, families, schools, and postsecondary
institutions to support college preparation and postsecondary
success, such as college preparation, financial aid processing,

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and transition to postsecondary institution enrollment.
(b) “Political subdivision” means a city, township, county,
school corporation, merged area, area education agency,
institution governed by the state board of regents, or any
other governmental subdivision.
(c) “School resource officer” means the same as defined in
34 U.S.C. §10389.
(d) “Work-based learning coordinator” means an appropriately
trained individual responsible for facilitating authentic,
engaging work-based learning experiences for learners and
educators in partnership with employers and others to enhance
learning by connecting the content and skills that are
necessary for future careers.
b. (1) Notwithstanding paragraph “a” , subparagraph (1),
each operational function assigned a supplementary weighting
of five pupils under paragraph “a” , subparagraph (1), shall
instead be assigned a supplementary weighting of four pupils
for the school budget years beginning on or after July 1, 2022,
July 1, 2023, and July 1, 2024 but before July 1, 2035 .
(2) Notwithstanding paragraph “a” , subparagraph (1), each
operational function assigned a supplementary weighting of
three pupils under paragraph “a” , subparagraph (1), shall
instead be assigned a supplementary weighting of two pupils for
the school budget years beginning on or after July 1, 2022,
July 1, 2023, and July 1, 2024 but before July 1, 2035 .
c. School districts that share operational functions with
other school districts are not required to be contiguous school
districts. If two or more districts sharing operational
functions are not contiguous to each other, the districts
separating those districts are not required to be a party to
the operational functions sharing arrangement.
d. Supplementary weighting pursuant to this subsection shall
be available to a school district during the period commencing
with the budget year beginning July 1, 2014, through the
budget year beginning July 1, 2024 2034 . The maximum amount
of additional weighting for which a school district shall be
eligible in a budget year is twenty-one additional pupils.
Criteria for determining the qualification of operational
functions for supplementary weighting shall be determined by

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the department by rule, through consideration of increased
student opportunities.
e. Supplementary weighting pursuant to this subsection shall
be available to an area education agency during the period
commencing with the budget year beginning July 1, 2014, through
the budget year beginning July 1, 2024 2034 . The minimum
amount of additional funding for which an area education
agency shall be eligible in a budget year is thirty thousand
dollars, and the maximum amount of additional funding for which
an area education agency shall be eligible is two hundred
thousand dollars. The department of management shall annually
set a weighting for each area education agency to generate
the approved operational sharing expense using the area
education agency’s special education cost per pupil amount and
foundation level. Criteria for determining the qualification
of operational functions for supplementary weighting shall be
determined by the department by rule, through consideration of
increased student opportunities.
f. This subsection is repealed effective July 1, 2025 2035 .
Sec. 16. Section 257.46, subsection 3, Code 2023, is amended
to read as follows:
3. If any portion of the gifted and talented program budget
remains unexpended at the end of the budget year, the remainder
shall be carried over to the subsequent budget year and added
to the gifted and talented program budget for that year. At
the end of a fiscal year beginning on or after July 1, 2022,
the school district may use all or a portion of funds for the
purposes authorized under subsection 9, paragraph “d” .
Sec. 17. Section 284.15, subsection 7, Code 2023, is amended
to read as follows:
7. The department shall establish criteria and a process
for application and approval of the framework established
under subsection 1 , and for comparable systems that meet the
requirements of section 284.16 or 284.17 , which a school
district may implement pursuant to subsection 6 in order to
receive teacher leadership supplement foundation aid calculated
under section 257.10, subsection 12 .

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Sec. 18. EFFECTIVE DATE. This division of this Act, being
deemed of immediate importance, takes effect upon enactment.
______________________________ ______________________________
PAT GRASSLEY AMY SINCLAIR
Speaker of the House President of the Senate
I hereby certify that this bill originated in the House and
is known as House File 68, Ninetieth General Assembly.
______________________________
MEGHAN NELSON
Chief Clerk of the House
Approved _______________, 2023 ______________________________
KIM REYNOLDS
Governor