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Senate OKs bill to allow school districts to refinance debt

School ConstructionBy Bob Eschliman
Editor

 

The Iowa Senate unanimously approved a bill Monday meant to provide local school districts with greater flexibility to leverage their construction debt.

Beginning with the upcoming school year that starts July 1, Senate File 485, if adopted, would allow school districts to impose a Physical Plant and Equipment Levy at a rate in excess of the levy rate limitations under Iowa Code 298.2. Currently, the maximum PPEL rate is set at $1.67 per $1,000 of assessed valuation – $0.33 per $1,000 plus a voter-approved component not to exceed $1.34 per $1,000 – which the district can borrow against to pay for projects. Nearly every school district in Iowa has voter-approved PPELs at the statutory limit.

Under SF 485, school districts may only exceed that limit if they have refunded or refinanced loan agreements entered into under Iowa Code 297.36 in compliance with a maturity period authorized by voters and if that results in a lower amount of interest paid on the loan agreement.

The bill provides, however, that the rate imposed by a school district under the provisions of the bill shall not exceed the rate imposed during the budget year in which the loan agreement was refunded or refinanced. The authorization to exceed the levy rate limitations terminates upon the maturity of the loan agreement after refunding or refinancing.

The bill’s floor manager, state Sen. Rob Hogg (D-Cedar Rapids), said the bill is meant to assist rural districts that may be experiencing declining property valuations as a result of shrinking populations. State Sen. Charles Schneider (R-West Des Moines) said the bill would save the taxpayers of a school district in his legislative district more than $400,000 in interest.

SF 485 was approved on a unanimous 48-0 vote without debate. State Sens. Mark Segabart (R-Vail) and Dick Dearden (D-Des Moines) were absent and excused from voting.

Although it was a Senate bill, the proposed legislation was exempt from Joint Rule 20 because it had been moved to the unfinished business calendar. Senators also unanimously adopted House File 563, a substitute bill for Senate File 422 – which amends Iowa Code as it relates to the verification of motor vehicle ownership for sale to vehicle recyclers – from the unfinished business calendar.

On the regular calendar, the Senate unanimously adopted House File 258. That bill prohibits peace officers from engaging in sex acts with individuals committed to the custody of the Iowa Department of Corrections or a judicial district department of correctional services, a juvenile placed at a juvenile placement facility, or a prisoner incarcerated in a county jail.

Senators also unanimously confirmed 13 gubernatorial appointees eligible for confirmation on the en bloc confirmation calendar. State Sen. Tom Courtney (D-Burlington) had requested the appointment of Geri Huser (D-Altoona) as director and member of the Iowa Utilities Board be placed on the individual confirmation calendar.