Bill Text: IA SF304 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act relating to school district funding by establishing a district cost per pupil equity budget adjustment, modifying limitations on the cash reserves, and including effective date provisions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2017-02-27 - Subcommittee: Sinclair, Quirmbach, and Rozenboom. S.J. 412. [SF304 Detail]
Download: Iowa-2017-SF304-Introduced.html
Senate File 304 - Introduced SENATE FILE BY SMITH A BILL FOR 1 An Act relating to school district funding by establishing a 2 district cost per pupil equity budget adjustment, modifying 3 limitations on the cash reserves, and including effective 4 date provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 1684XS (4) 87 md/sc/jh PAG LIN 1 1 Section 1. Section 257.2, subsection 2, Code 2017, is 1 2 amended by striking the subsection. 1 3 Sec. 2. NEW SECTION. 257.14A District cost per pupil equity 1 4 ==== budget adjustment. 1 5 1. The board of directors of a school district with a 1 6 regular program district cost per pupil that is less than the 1 7 highest regular program district cost per pupil among all 1 8 school districts in the state for the same budget year that 1 9 wishes to receive the budget adjustment under this section may 1 10 adopt a resolution requesting the budget adjustment by May 15 1 11 preceding the budget year and shall within ten days of adoption 1 12 of the resolution notify the department of management of the 1 13 amount of the budget adjustment requested, subject to the 1 14 limitations of subsection 2, paragraph "a". The department of 1 15 management shall approve the budget adjustment for an amount 1 16 not to exceed the maximum budget adjustment amount authorized 1 17 under subsection 2, paragraph "a". 1 18 2. a. For budget years beginning on or after July 1, 1 19 2017, each school district for which a budget adjustment is 1 20 approved under subsection 1 shall be eligible for a budget 1 21 adjustment for that budget year in an amount not to exceed 1 22 the lesser of the difference between the school district's 1 23 regular program district cost per pupil and the highest regular 1 24 program district cost per pupil among all school districts 1 25 in the state multiplied by the district's budget enrollment 1 26 and the difference between the school district's cash reserve 1 27 limitation under section 298.10, subsection 3, and fifteen 1 28 percent of the school district's general fund expenditures for 1 29 the year previous to the base year minus the unexpended fund 1 30 balance for the year previous to the base year. The resolution 1 31 adopted under subsection 1 may specify a budget adjustment 1 32 amount that is less than the maximum amount authorized under 1 33 this paragraph. 1 34 b. The school district shall fund the budget adjustment 1 35 by using cash reserve funds, interest on cash reserve funds 2 1 earned during the base year, or both. If, however, the school 2 2 district funds the budget adjustment solely with interest on 2 3 cash reserve funds earned during the base year, the amount of 2 4 the budget adjustment shall not reduce the school district's 2 5 cash reserve limitation determined under section 298.10, 2 6 subsection 3, paragraph "b". 2 7 3. A budget adjustment received under this section shall 2 8 not affect the eligibility for or amount of any other budget 2 9 adjustment authorized by law for the same budget year. In 2 10 addition, a budget adjustment under this section shall be 2 11 limited to the budget year for which the adjustment was 2 12 authorized and shall not be included in any computation of a 2 13 school district's cost for any future budget year. 2 14 Sec. 3. Section 257.34, Code 2017, is amended to read as 2 15 follows: 2 16 257.34 Cash reserve information. 2 17 1. If a school district receives less state school 2 18 foundation aid under section 257.1 than is due under that 2 19 section for a base year and the school district uses funds 2 20 from its cash reserve during the base year to make up for 2 21 the amount of state aid not paid, the board of directors of 2 22 the school district shall include in its general fund budget 2 23 document information about the amount of the cash reserve used 2 24 to replace state school foundation aid not paid. 2 25 2. If a school district uses funds from its cash reserve, 2 26 including interest earned on such funds, during the base year 2 27 to fund a budget adjustment under section 257.14A, the board of 2 28 directors of the school district shall include in its general 2 29 fund budget document information about the amount of the cash 2 30 reserve used for such purpose. 2 31 Sec. 4. Section 298.10, subsection 3, Code 2017, is amended 2 32 to read as follows: 2 33 3. a.ForExcept as provided in paragraph "b", for fiscal 2 34 years beginning on or after July 1, 2012, the cash reserve 2 35 levy for a budget year shall not exceed twenty percent of the 3 1 general fund expenditures for the year previous to the base 3 2 year minus the unexpended fund balance, as defined in section 3 3 257.2, for the year previous to the base year. 3 4 b. For fiscal years beginning on or after July 1, 2018, the 3 5 cash reserve levy for a school district that received a budget 3 6 adjustment under section 257.14A, shall not exceed the amount 3 7 determined under paragraph "a" minus the sum of all budget 3 8 adjustments received by the district under section 257.14A for 3 9 all previous budget years, excluding those budget years for 3 10 which the budget adjustment was funded solely with interest 3 11 earned on cash reserve funds. 3 12 Sec. 5. Section 298A.2, Code 2017, is amended to read as 3 13 follows: 3 14 298A.2 General fund. 3 15 1. All moneys received by a school corporation from taxes 3 16 and other sources must be accounted for in the general fund, 3 17 except moneys required by law to be accounted for in another 3 18 fund. 3 19 2. Interest earned on cash reserve funds during a budget 3 20 year may be added to the district's existing cash reserve 3 21 amount within the general fund or may be designated by the 3 22 school board to fund a budget adjustment under section 257.14A 3 23 for the following budget year. Interest amounts designated to 3 24 be used for a budget adjustment under section 257.14A shall not 3 25 be included in district cost. 3 26 Sec. 6. IMPLEMENTATION. Notwithstanding the deadline 3 27 for adopting a resolution to approve the budget adjustment 3 28 in section 257.14A, subsection 1, for the school budget 3 29 year beginning July 1, 2017, the resolution of the board of 3 30 directors of a school district shall be approved not later than 3 31 June 10, 2017. 3 32 Sec. 7. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 3 33 immediate importance, takes effect upon enactment. 3 34 EXPLANATION 3 35 The inclusion of this explanation does not constitute agreement with 4 1 the explanation's substance by the members of the general assembly. 4 2 This bill establishes a district cost per pupil equity 4 3 budget adjustment and modifies limitations on the amount 4 4 of allowable school district cash reserves. The board of 4 5 directors of a school district with a regular program district 4 6 cost per pupil that is less than the highest regular program 4 7 district cost per pupil among all school districts in the 4 8 state for the same budget year may annually adopt a resolution 4 9 requesting to receive the budget adjustment authorized in 4 10 the bill. Following adoption of the resolution the board of 4 11 directors must, within 10 days of its adoption, notify the 4 12 department of management of the amount of the budget adjustment 4 13 requested. The department of management shall approve the 4 14 budget adjustment for an amount not to exceed the maximum 4 15 budget adjustment amount authorized in the bill. 4 16 For budget years beginning on or after July 1, 2017, each 4 17 approved school district is eligible for a budget adjustment 4 18 for that budget year in an amount not to exceed the lesser of 4 19 the difference between the school district's regular program 4 20 district cost per pupil and the highest regular program 4 21 district cost per pupil among all school districts in the 4 22 state multiplied by the district's budget enrollment and 4 23 the difference between the school district's cash reserve 4 24 limitation under Code section 298.10, subsection 3, and 15 4 25 percent of the school district's general fund expenditures 4 26 for the year previous to the base year minus the unexpended 4 27 fund balance for the year previous to the base year. The 4 28 budget adjustment amount may be less than the maximum amount 4 29 authorized under the bill. The bill requires the school 4 30 district to fund the budget adjustment using cash reserve 4 31 funds, interest earned on cash reserve funds, or both. If, 4 32 however, the school district funds the budget adjustment solely 4 33 with interest earned on cash reserve funds during the base 4 34 year, the amount of the budget adjustment shall not reduce the 4 35 school district's cash reserve limitation provided for in the 5 1 bill. 5 2 The bill specifies that the budget adjustment received does 5 3 not affect the eligibility for or amount of any other budget 5 4 adjustment authorized by law for the same budget year and that 5 5 the budget adjustment under the bill is limited to the budget 5 6 year for which the adjustment was authorized and shall not be 5 7 included in any computation of a school district's cost for any 5 8 future budget year. 5 9 Under the bill, if a school district uses funds from its cash 5 10 reserve, including interest earned on such funds, during the 5 11 base year to fund a budget adjustment authorized in the bill, 5 12 the board of directors of the school district shall include in 5 13 its general fund budget document information about the amount 5 14 of the cash reserve used for such purpose. 5 15 The bill provides that interest earned on cash reserve 5 16 funds during a budget year may be added to the district's 5 17 existing cash reserve amount within the general fund or may 5 18 be designated by the school board to be used to fund a budget 5 19 adjustment authorized in the bill. However, the interest 5 20 amounts so designated shall not be included in district cost. 5 21 Currently, Code section 298.10 directs the department of 5 22 management to limit the school district's cash reserve levy to 5 23 a level that is not in excess of 20 percent of the general fund 5 24 expenditures for the year previous to the base year minus the 5 25 unexpended fund balance for the year previous to the base year. 5 26 The bill provides that for fiscal years beginning on or after 5 27 July 1, 2018, the cash reserve levy for a school district that 5 28 received a budget adjustment under the bill shall not exceed 5 29 the amount determined under the current law limitation minus 5 30 the sum of all budget adjustments received by the district 5 31 under the bill for all previous budget years, excluding those 5 32 budget years for which the budget adjustment was funded solely 5 33 with interest earned on cash reserve funds. 5 34 Notwithstanding the May 15 deadline for adopting a 5 35 resolution to approve the budget adjustment provided for in the 6 1 bill, for the school budget year beginning July 1, 2017, the 6 2 resolution of the board of directors of a school district must 6 3 be approved not later than June 10, 2017. 6 4 The bill takes effect upon enactment. LSB 1684XS (4) 87 md/sc/jh
