Bill Text: IA HF546 | 2019-2020 | 88th General Assembly | Enrolled

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Bill Title: A bill for an act relating to school funding by modifying provisions relating to the collection of sales tax for deposit in the secure an advanced vision for education fund, provisions relating to the use of tax revenue from the secure an advanced vision for education fund, and provisions relating to the calculation of the additional property tax levy, and making appropriations. (Formerly HF 425.) Effective 7-1-19.

Spectrum: Committee Bill

Status: (Passed) 2019-05-24 - Signed by Governor. H.J. 1081. [HF546 Detail]

Download: Iowa-2019-HF546-Enrolled.html

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House File 546 - Enrolled
House File 546
AN ACT
RELATING TO SCHOOL FUNDING BY MODIFYING PROVISIONS RELATING
TO THE COLLECTION OF SALES TAX FOR DEPOSIT IN THE SECURE
AN ADVANCED VISION FOR EDUCATION FUND, PROVISIONS RELATING
TO THE USE OF TAX REVENUE FROM THE SECURE AN ADVANCED
VISION FOR EDUCATION FUND, AND PROVISIONS RELATING TO THE
CALCULATION OF THE ADDITIONAL PROPERTY TAX LEVY, AND MAKING
APPROPRIATIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
Section 1. Section 257.2, subsection 8, Code 2019, is
amended by adding the following new paragraph:
NEW PARAGRAPH . e. Foundation base supplement payments
received under section 257.16D.
Sec. 2. Section 257.4, subsection 1, paragraph a, Code 2019,
is amended by adding the following new subparagraph:
NEW SUBPARAGRAPH . (10) The amount of the foundation base
supplement payment to be received by the school district under
section 257.16D.
Sec. 3. Section 257.4, subsection 1, paragraph b, Code 2019,
is amended to read as follows:
b. For the budget year beginning July 1, 2008, and
succeeding budget years, the department of management shall
annually determine an adjusted additional property tax levy
and a statewide maximum adjusted additional property tax
levy rate, not to exceed the statewide average additional
property tax levy rate, calculated by dividing the total

House File 546, p. 2
adjusted additional property tax levy dollars statewide by the
statewide total net taxable valuation. For purposes of this
paragraph, the adjusted additional property tax levy shall be
that portion of the additional property tax levy corresponding
to the state cost per pupil multiplied by a school district’s
weighted enrollment, and then multiplied by one hundred
percent less the regular program foundation base per pupil
percentage pursuant to section 257.1 , and then reduced by the
amount of the property tax replacement payment to be received
under section 257.16B and the amount of the foundation base
supplement payment to be received under section 257.16D . The
district shall receive adjusted additional property tax levy
aid in an amount equal to the difference between the adjusted
additional property tax levy rate and the statewide maximum
adjusted additional property tax levy rate, as applied per
thousand dollars of assessed valuation on all taxable property
in the district. The statewide maximum adjusted additional
property tax levy rate shall be annually determined by the
department taking into account amounts allocated pursuant to
section 257.15, subsection 4 , and the balance of the property
tax equity and relief fund created in section 257.16A at the
end of the calendar year.
Sec. 4. Section 257.15, subsection 4, paragraph b, Code
2019, is amended to read as follows:
b. After lowering all school district adjusted additional
property tax levy rates to the statewide maximum adjusted
additional property tax levy rate under paragraph “a” , the
department of management shall use any remaining funds at the
end of the calendar year to further lower additional property
taxes by increasing for the budget year beginning the following
July 1, the state regular program foundation base per pupil
percentage under section 257.1 . Moneys used pursuant to this
paragraph shall supplant an equal amount of the appropriation
made from the general fund of the state pursuant to section
257.16 that represents the increase in state foundation aid.
Sec. 5. NEW SECTION . 257.16D Foundation base supplement
fund.
1. A foundation base supplement fund is created as a
separate and distinct fund in the state treasury under the

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control of the department of management. Moneys in the fund
include revenues credited to the fund, appropriations made to
the fund, and other moneys deposited into the fund.
2. a. There is appropriated annually from the fund to
the department of management an amount necessary to make all
foundation base supplement payments under this section. The
department of management shall calculate each school district’s
foundation base supplement payment based on the distribution
methodology under paragraph “b” .
b. The moneys available in a fiscal year in the foundation
base supplement fund shall be distributed by the department
of management to each school district on a per pupil basis
calculated using each school district’s weighted enrollment,
as defined in section 257.6, for that fiscal year. However,
the amount of a school district’s foundation base supplement
payment for a budget year shall not exceed an amount equal to
the school district’s weighted enrollment for the budget year
multiplied by the amount for the budget year calculated under
section 257.16B, subsection 2, paragraph “f” , subparagraph
(2), minus the amount of the school district’s property tax
replacement payment under section 257.16B for the budget year.
3. Notwithstanding section 8.33, any moneys remaining in
the foundation base supplement fund at the end of a fiscal year
shall not revert to any other fund but shall remain in the
foundation base supplement fund for use as provided in this
section for the following fiscal year.
Sec. 6. NEW SECTION . 257.51 Career academy fund —— grant
program.
1. A career academy fund is created and established as
a separate and distinct fund in the state treasury under the
control of the department of education.
2. a. In addition to moneys deposited in the career
academy fund pursuant to section 423F.2, the department of
education may accept gifts, grants, bequests, and other private
contributions, as well as state or federal funds, and shall
deposit the moneys in the fund to be used for purposes of
this section. Moneys in the fund are appropriated to the
department of education and shall be used for the purposes of
this section.

House File 546, p. 4
b. Notwithstanding section 8.33, moneys in the fund
that remain unencumbered or unobligated at the close of the
fiscal year shall not revert but shall remain available for
expenditure for the purposes of this section in succeeding
fiscal years. Notwithstanding section 12C.7, subsection 2,
interest earned on moneys in the career academy fund shall be
credited to the fund.
3. The department of education shall adopt rules to
establish and administer a career academy grant program
to provide for the allocation of money in the fund in
the form of competitive grants, not to exceed one million
dollars per grant, to school corporations for career academy
infrastructure, career academy equipment, or both, in
accordance with the goals of this section and to further the
goals of the establishment and operation of career academies
under section 258.15. The rules adopted by the department
of education shall specify the eligibility of applicants
and eligible items for grant funding. Priority for grants
shall first be given to applications to establish new career
academies that are organized as regional centers pursuant
to chapter 258. Subsequent priority shall be given to
applications for expanding existing career academies.
Sec. 7. Section 423.2, subsection 12, Code 2019, is amended
to read as follows:
12. The sales tax rate of six percent is reduced to five
percent on January 1, 2030 2051 .
Sec. 8. Section 423.2A, subsection 2, paragraph c, Code
2019, is amended to read as follows:
c. Transfer one-sixth of the remaining revenues to the
secure an advanced vision for education fund created in section
423F.2 . This paragraph “c” is repealed December 31, 2029
January 1, 2051 .
Sec. 9. Section 423.5, subsection 4, Code 2019, is amended
to read as follows:
4. The use tax rate of six percent is reduced to five
percent on January 1, 2030 2051 .
Sec. 10. Section 423.43, subsection 1, paragraph b, Code
2019, is amended to read as follows:
b. Subsequent to the deposit into the general fund of

House File 546, p. 5
the state and after the transfer of such revenues collected
under chapter 423B , the department shall transfer one-sixth of
such remaining revenues to the secure an advanced vision for
education fund created in section 423F.2 . This paragraph is
repealed December 31, 2029 January 1, 2051 .
Sec. 11. Section 423F.2, subsection 3, Code 2019, is amended
to read as follows:
3. a. The moneys available in a fiscal year in the secure
an advanced vision for education fund shall be distributed by
the department of revenue 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.
b. (1) Prior to distribution of moneys in the secure an
advanced vision for education fund to school districts, two
and one-tenths percent of the moneys available in a an amount
equal to the equity transfer amount for the fiscal year minus
the foundation base transfer amount for the fiscal year shall
be distributed and credited to the property tax equity and
relief fund created in section 257.16A , an amount equal to
the foundation base transfer amount shall be distributed and
credited to the foundation base supplement fund created in
section 257.16D, and an amount equal to the career academy
transfer amount for the fiscal year shall be distributed and
credited to the career academy fund created in section 257.51 .
(2) For purposes of this subsection, the equity transfer
amount is determined by multiplying the equity transfer
percentage by the amount of moneys available in the secure an
advanced vision for education fund in the fiscal year.
(a) For the fiscal year beginning July 1, 2018, the equity
transfer percentage is two and one-tenth percent. For the
fiscal year beginning July 1, 2019, the equity transfer
percentage is three and one-tenth percent.
(b) For each fiscal year beginning on or after July 1, 2020,
the equity transfer percentage is equal to the equity transfer
percentage for the immediately preceding fiscal year, unless
the amount of moneys available in the secure an advanced vision
for education fund in the immediately preceding fiscal year
equals or exceeds one hundred two percent of the amount of
moneys available in the fund for the fiscal year prior to the

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immediately preceding fiscal year, in which case the equity
transfer percentage shall be the equity transfer percentage for
the immediately preceding fiscal year plus one percent subject
to the limitation in subparagraph division (c).
(c) If the equity transfer percentage calculated under
subparagraph division (b) exceeds thirty percent, the equity
transfer percentage for that fiscal year shall be thirty
percent.
(3) For purposes of this subsection, the foundation base
transfer amount for the fiscal year beginning July 1, 2019, is
zero, and for each fiscal year beginning on or after July 1,
2020, the foundation base transfer amount equals the equity
transfer amount for the fiscal year under subparagraph (2)
minus the sum of the following:
(a) Three and one-tenth percent of the amount of the moneys
available in the secure an advanced vision for education fund
in the fiscal year.
(b) One-half of the product of the equity transfer
percentage for the fiscal year minus three and one-tenth
percent multiplied by the moneys available in the secure an
advanced vision for education fund in the fiscal year.
(4) (a) For purposes of this subsection, the career academy
transfer amount for the fiscal year beginning July 1, 2019, is
one million dollars.
(b) For each fiscal year beginning on or after July 1,
2020, the career academy transfer amount is equal to the lesser
of five million dollars or the amount of the career academy
transfer amount for the immediately preceding fiscal year,
unless the amount of moneys available in the secure an advanced
vision for education fund in the immediately preceding fiscal
year equals or exceeds one hundred two and one-half percent of
the amount of moneys available in the fund for the fiscal year
prior to the immediately preceding fiscal year, in which case
the career academy transfer amount equals the lesser of five
million dollars or the sum of the amount of the career academy
transfer amount for the immediately preceding fiscal year plus
one-half percent of the amount of moneys available in the
secure an advanced vision for education fund in the fiscal year
following the deposit of revenues in the property tax equity

House File 546, p. 7
and relief fund and the foundation base supplement fund.
Sec. 12. Section 423F.3, subsection 3, paragraph b, Code
2019, is amended to read as follows:
b. (1) If the board of directors intends to use funds for
purposes other than those listed in paragraph “a” , or change the
use of funds to purposes other than those listed in paragraph
“a” , the board shall adopt a revenue purpose statement or amend
an existing revenue purpose statement , subject to approval of
the electors, listing the proposed use of the funds. School
districts shall submit the statement to the voters no later
than sixty days prior to the expiration of any existing revenue
purpose statement or change in use not included in the existing
revenue purpose statement.
(2) (a) Notwithstanding any provision of law to the
contrary, for each school district with an existing revenue
purpose statement for the use of revenues from the secure an
advanced vision for education fund adopted under this paragraph
or adopted under another provision of law before July 1,
2019, such revenue purpose statement shall terminate and be
of no further force and effect on January 1, 2031, or the
expiration date of the revenue purpose statement, whichever is
earlier. If such a school district intends to use funds for
purposes other than those listed in paragraph “a” and does not
intend to operate without a revenue purpose statement on or
after January 1, 2031, or the expiration date of the revenue
purpose statement, whichever is earlier, the board of directors
shall submit a revenue purpose statement for approval by the
electors under subparagraph (1) on or after July 1, 2019,
and such revenue purpose statement submitted to the electors
shall include all proposed uses including those previously
approved by the electors, if applicable. The following, in
substantially the following form, shall be included in the
notice of the election published under paragraph “d” and
published on the school district’s internet site:
If a majority of eligible electors voting on the question
fail to approve this revenue purpose statement, revenues
received by the school district from the secure an advanced
vision for education fund shall first be expended for . . . .
(State the purposes in the order listed in subsection 1 and as

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required by subsection 4 of this section for which the revenues
received by the school district under this chapter will be
expended.)
(b) Unless a new revenue purpose statement is adopted by
the electors, the existing revenue purpose statement remains
in effect until January 1, 2031, or the expiration date of the
revenue purpose statement, whichever is earlier. If a revenue
purpose statement is terminated under the provisions of this
subparagraph, such termination shall not affect the validity
of or a first lien on bonds issued under section 423E.5, Code
2019, or section 423F.5 prior to the date the revenue purpose
statement is terminated under subparagraph division (a), or
the validity of a contract or other obligation of the school
district secured in whole or in part by or requiring the
payment of funds received under this chapter in effect prior
to the date the revenue purpose statement is terminated under
subparagraph division (a).
Sec. 13. Section 423F.3, subsection 5, paragraph b, Code
2019, is amended to read as follows:
b. The infeasibility cost-benefit analysis of remodeling,
reconstructing, or repairing existing buildings.
Sec. 14. Section 423F.3, subsection 5, Code 2019, is amended
by adding the following new paragraph:
NEW PARAGRAPH . i. Benefits and effects of the new
construction on student learning.
Sec. 15. Section 423F.3, subsection 6, Code 2019, is amended
by adding the following new paragraph:
NEW PARAGRAPH . 0d. Additionally, “school infrastructure”
includes school safety and security infrastructure. For
purposes of this paragraph, “school safety and security
infrastructure” includes but is not limited to safe rooms,
remote entry technology and equipment, security camera systems,
card access systems, and communication systems with access to
fire and police emergency frequencies. For purposes of this
paragraph, “school safety and security infrastructure” does
not include the cost of personnel, development of safety and
security plans, or training related to the implementation of
safety and security plans. It is the intent of the general
assembly that each school district prioritize the use of

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revenues under this chapter for secure entries for the
district’s attendance centers before expending such revenues
for athletic facility infrastructure projects.
Sec. 16. Section 423F.3, Code 2019, is amended by adding the
following new subsection:
NEW SUBSECTION . 6A. a. Prior to approving the use
of revenues received under this chapter for an athletic
facility infrastructure project within the scope of the
school district’s approved revenue purpose statement or
pursuant to subsection 4 for a school district without an
approved revenue statement, the board of directors shall adopt
a resolution setting forth the proposal for the athletic
facility infrastructure project and hold an additional public
hearing on the issue of construction of the athletic facility.
Notice of the time and place of the public hearing shall be
published not less than ten nor more than twenty days before
the public hearing in a newspaper which is a newspaper of
general circulation in the school district. If at any time
prior to the fifteenth day following the hearing, the secretary
of the board of directors receives a petition containing the
required number of signatures and asking that the question
of the approval of the use of revenues for the athletic
facility infrastructure project be submitted to the voters
of the school district, the board of directors shall either
rescind the board’s resolution for the use of revenues for
the athletic facility infrastructure project or direct the
county commissioner of elections to submit the question to the
registered voters of the school district at an election held
on a date specified in section 39.2, subsection 4, paragraph
“c” . The petition must be signed by eligible electors equal
in number to not less than one hundred or thirty percent of
the number of voters at the last preceding election of school
officials under section 277.1, whichever is greater. If a
majority of those voting on the question favors the use of the
revenues for the athletic facility infrastructure project, the
board shall be authorized to approve such use by resolution of
the board. If a majority of those voting on the question does
not favor the use of the revenues for the athletic facility
infrastructure project, the board of directors shall rescind

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the board’s resolution for the use of revenues for the athletic
facility infrastructure project. If a petition is not received
by the board of directors within the prescribed time period,
the board of directors may approve the use of revenues for
the athletic facility infrastructure project without voter
approval.
b. After fourteen days from the date of the hearing under
paragraph “a” or fourteen days after the date of the election
held under paragraph “a” , if applicable, whichever is later, an
action shall not be brought questioning the board of directors’
authority to use funds for the athletic facility infrastructure
project or questioning the legality of any proceedings in
connection with the authorization of such use.
c. For purposes of this subsection:
(1) “Athletic facility” means a building or structure, or
portion thereof, that is not physically attached to a student
attendance center.
(2) “Athletic facility infrastructure project” means a school
infrastructure project that includes in whole or in part the
construction of an athletic facility.
(3) “Construction” does not include repair or maintenance
of an existing facility.
Sec. 17. Section 423F.4, Code 2019, is amended to read as
follows:
423F.4 Borrowing authority for school districts.
1. A Subject to the conditions established under subsection
2, a school district may anticipate its share of the revenues
under section 423F.2 by issuing bonds in the manner provided in
section 423E.5 , Code 2019 . However, to the extent any school
district has issued bonds anticipating the proceeds of an
extended local sales and services tax for school infrastructure
purposes imposed by a county pursuant to former chapter 423E,
Code and Code Supplement 2007, prior to July 1, 2008, the
pledge of such revenues for the payment of principal and
interest on such bonds shall be replaced by a pledge of its
share of the revenues under section 423F.2 .
2. a. Bonds issued on or after July 1, 2019, shall not be
sold at public sale as provided in chapter 75, or at a private
sale, without notice and hearing. Notice of the time and place

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of the public hearing shall be published not less than ten nor
more than twenty days before the public hearing in a newspaper
which is a newspaper of general circulation in the school
district.
b. For bonds subject to the requirements of paragraph
“a” , if at any time prior to the fifteenth day following the
hearing, the secretary of the board of directors receives a
petition containing the required number of signatures and
asking that the question of the issuance of such bonds be
submitted to the voters of the school district, the board shall
either rescind its adoption of the resolution or direct the
county commissioner of elections to submit the question to the
registered voters of the school district at an election held
on a date specified in section 39.2, subsection 4, paragraph
“c” . The petition must be signed by eligible electors equal
in number to not less than one hundred or thirty percent of
the number of voters at the last preceding election of school
officials under section 277.1, whichever is greater. If the
board submits the question at an election and a majority of
those voting on the question favors issuance of the bonds, the
board shall be authorized to issue the bonds.
c. After fourteen days from the date of the hearing under
paragraph “a” or fourteen days after the date of the election
held under paragraph “b” , if applicable, whichever is later,
an action shall not be brought questioning the legality of
any bonds or the power of the authority to issue any bonds
or to the legality of any proceedings in connection with the
authorization or issuance of the bonds.
Sec. 18. Section 423F.6, Code 2019, is amended to read as
follows:
423F.6 Repeal.
This chapter is repealed December 31, 2029 January 1, 2051 .
Sec. 19. STATE MANDATE FUNDING SPECIFIED. In accordance
with section 25B.2, subsection 3, the state cost of requiring
compliance with any state mandate included in this Act shall
be paid by a school district from state school foundation aid
received by the school district under section 257.16. This
specification of the payment of the state cost shall be deemed
to meet all of the state funding-related requirements of

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section 25B.2, subsection 3, and no additional state funding
shall be necessary for the full implementation of this Act
by and enforcement of this Act against all affected school
districts.
______________________________ ______________________________
LINDA UPMEYER CHARLES SCHNEIDER
Speaker of the House President of the Senate
I hereby certify that this bill originated in the House and
is known as House File 546, Eighty-eighth General Assembly.
______________________________
CARMINE BOAL
Chief Clerk of the House
Approved _______________, 2019 ______________________________
KIM REYNOLDS
Governor