Bill Text: IA SF2405 | 2023-2024 | 90th General Assembly | Enrolled

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Bill Title: A bill for an act modifying provisions related to the distribution formula for general state financial aid to community colleges and including applicability provisions. (Formerly SF 2373, SSB 3164.) Effective date: 07/01/2024. Applicability date: 07/01/2025.

Spectrum: Committee Bill

Status: (Passed) 2024-05-08 - Signed by Governor. S.J. 963. [SF2405 Detail]

Download: Iowa-2023-SF2405-Enrolled.html

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Senate File 2405 - Enrolled
Senate File 2405
AN ACT
MODIFYING PROVISIONS RELATED TO THE DISTRIBUTION FORMULA
FOR GENERAL STATE FINANCIAL AID TO COMMUNITY COLLEGES AND
INCLUDING APPLICABILITY PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
Section 1. Section 260C.18C, Code 2024, is amended to read
as follows:
260C.18C State aid distribution formula.
1. Purpose. A distribution plan for general state financial
aid to Iowa’s community colleges is established for the fiscal
year commencing July 1, 2005 2025 , and succeeding fiscal years.
Funds appropriated by the general assembly to the department
for general financial aid to community colleges shall be
allocated to each community college in the manner provided
under this section for the community colleges to provide
the highest quality educational opportunities and services,
as described in section 260C.1, to the greatest number of
students .
2. Definitions. As used in this section and section
260C.18D , unless the context otherwise requires:

Senate File 2405, p. 2
a. “Base funding allocation” means the amount of general
state financial aid all community colleges received in the base
year.
b. “Base year” means the fiscal year immediately preceding
the budget year.
c. “Below-average support per FTEE” for a community college
means the state-average combined support per FTEE minus the
combined support per FTEE for the community college if the
community college’s combined support per FTEE is less than the
state-average combined support per FTEE.
d. c. “Budget year” means the fiscal year for which moneys
are appropriated by the general assembly.
e. d. “Combined support” for a community college means
the total amount of moneys the community college received in
general state financial aid in the base year plus the community
college’s general fund property tax revenue, including utility
replacement, for the base year.
f. “Combined support per FTEE” for a community college
means the community college’s combined support divided by its
three-year rolling average full-time equivalent enrollment for
the three years prior to the base year.
g. “Contact hour” for a noncredit course equals fifty
minutes of contact between an instructor and students in a
scheduled course offering for which students are registered.
h. “Credit hour” , for purposes of community college funding
distribution, shall be as defined by the department by rule.
i. “Eligible credit courses” means all credit courses that
are eligible for general state financial aid which are part
of a department-approved program of study. The department
shall review and provide a determination should a question of
eligibility occur.
j. “Eligible growth support” for a community college is the
community college’s below-average support per FTEE multiplied
times its three-year rolling average full-time equivalent
enrollment.
k. “Eligible noncredit courses” means all noncredit courses
eligible for general state financial aid which fall under one
of the eligible categories for noncredit courses as defined
by rule of the department. The department shall review and

Senate File 2405, p. 3
provide a determination should a question of eligibility occur.
l. “Eligible student” means a student enrolled in eligible
credit or eligible noncredit courses. The department shall
review and provide a determination should a question of
eligibility occur.
m. e. “Fiscal year” means the period of twelve months
beginning on July 1 and ending on June 30.
n. One “full-time equivalent enrollment (FTEE)” equals
twenty-four credit hours for credit courses or six hundred
contact hours for noncredit courses generated by all eligible
students enrolled in eligible courses.
o. f. “General fund property tax revenue” means the amount
of moneys a community college raised or could have raised from
a property tax of twenty and one-fourth cents per thousand
dollars of assessed valuation on all taxable property in its
merged area collected for the base year.
p. g. “General state financial aid” means the amount of
general state financial aid the community college received from
the general fund.
q. “Inflation adjustment amount” means the inflation rate
minus two percentage points multiplied times the base funding
allocation. The inflation adjustment amount shall not be less
than zero.
r. “Inflation rate” means the average of the preceding
twelve-month percentage change, which shall be computed on
a monthly basis, in the consumer price index for all urban
consumers, not seasonally adjusted, published by the United
States department of labor, bureau of labor statistics,
calculated for the calendar year ending six months after the
beginning of the base year.
s. “State-average combined support per FTEE” means the
average of the combined support per FTEE for all community
colleges in the state in the base year.
t. “Three-year rolling average full-time equivalent
enrollment” means the average of the audited full-time
equivalent enrollment for a community college over the three
fiscal years prior to the base year as determined by the
department.
u. “Total growth support amount” means the sum of the

Senate File 2405, p. 4
eligible growth support for all the community colleges.
3. Distribution formula. Moneys appropriated by the general
assembly from the general fund to the department for community
college purposes for general state financial aid for a budget
year shall be allocated to each community college by the
department as follows:
a. If the inflation rate is equal to two percent or less:
(1) Base funding allocation. The moneys shall first
be allocated in the amount of general state financial aid
each community college received in the base year. If the
appropriation is less than the total of the amount of general
state financial aid each community college received in the base
year, the moneys shall be allocated in the same proportion as
the allocation of general state financial aid each community
college received in the base year.
(2) Marginal cost adjustment. After the base funding has
been allocated, each community college shall be allocated up to
an additional two percent of its base funding allocation. The
community college’s allocation shall be in the same proportion
as the allocation of general state financial aid each community
college received in the base year.
(3) Three-year rolling average of full-time equivalent
enrollment. If the increase in the total state general aid
exceeds two percent over the base funding allocation, an amount
up to an additional one percent of the base funding allocation
shall be distributed based upon each community college’s
proportional share of the three-year rolling average full-time
equivalent enrollments for all community colleges.
(4) Extraordinary growth adjustment. If the increase in
total state general aid exceeds three percent over the base
funding allocation, an amount up to an additional one percent
of the base funding allocation shall be distributed as follows:
(a) Forty percent of the moneys shall be allocated based
upon each community college’s proportional share of the
three-year rolling average full-time equivalent enrollments for
all community colleges.
(b) Sixty percent of the moneys shall be allocated to
community colleges that have eligible growth support. The
allocation shall be based upon the proportional share that each

Senate File 2405, p. 5
community college’s eligible growth support bears to the total
growth support amount. Once the moneys allocated under this
subparagraph division equal the total growth support amount,
the remaining moneys allocated under this subparagraph shall be
allocated as provided in subparagraph division (a).
(5) Additional three-year rolling average FTEE
allocation. If the increase in total state general aid
exceeds four percent over the base funding allocation, all
remaining moneys shall be distributed based upon each college’s
proportional share of the three-year rolling average full-time
equivalent enrollments for all community colleges Annually,
on or before October 31 of each year, the presidents of
the community colleges and the chancellors of the community
colleges who serve as the chief executive officers of such
community colleges shall establish a distribution formula for
general state aid to the community colleges for the succeeding
budget year . When determining the distribution formula
pursuant to this paragraph, the presidents and chancellors
shall consider the enrollment and combined support for each
community college, along with any other factor deemed relevant
by the presidents and chancellors. The distribution formula
shall not allocate funding to a community college that is below
the general state financial aid the community college received
in any previous budget year, unless there is a reduction in the
base funding allocation. The distribution formula requires the
approval of at least ten of the presidents and chancellors. If
the presidents and chancellors approve a distribution formula
pursuant to this paragraph, the presidents and chancellors
shall transmit the distribution formula to the department, and
the department shall implement the distribution formula.
b. If the inflation rate is greater than two percent but
less than four percent:
(1) Base funding allocation. The moneys shall first
be allocated in the amount of general state financial aid
each community college received in the base year. If the
appropriation is less than the total of the amount of general
state financial aid each community college received in the base
year, the moneys shall be allocated in the same proportion as
the allocation of general state financial aid each community

Senate File 2405, p. 6
college received in the base year.
(2) Marginal cost adjustment. After the base funding has
been allocated, each community college shall be allocated up to
an additional two percent of its base funding allocation. The
community college’s allocation shall be in the same proportion
as the allocation of general state financial aid each community
college received in the base year.
(3) Three-year rolling average of full-time equivalent
enrollment. If the increase in the total state general aid
exceeds two percent over the base funding allocation, an amount
up to an additional one percent of the base funding allocation
shall be distributed based upon each community college’s
proportional share of the three-year rolling average full-time
equivalent enrollments for all community colleges.
(4) Extraordinary growth adjustment. If the increase in
total state general aid exceeds three percent over the base
funding allocation, an amount up to an additional one percent
of the base funding allocation shall be based as follows:
(a) Forty percent of the moneys shall be allocated based
upon each community college’s proportional share of the
three-year rolling average full-time equivalent enrollments for
all community colleges.
(b) Sixty percent of the moneys shall be allocated to
community colleges that have eligible growth support. The
allocation shall be based upon the proportional share that each
community college’s eligible growth support bears to the total
growth support amount. Once the moneys allocated under this
subparagraph division equal the total growth support amount,
the remaining moneys allocated under this subparagraph shall be
allocated as provided in subparagraph division (a).
(5) Inflation adjustment. If the increase in total
state general aid exceeds four percent over the base funding
allocation, an amount up to the inflation adjustment amount
shall be distributed to each community college in the same
proportion as the allocation of general state financial aid
each community college received in the base year.
(6) Additional three-year rolling average FTEE
allocation. If there are remaining moneys to be distributed
under this paragraph after distributing moneys under

Senate File 2405, p. 7
subparagraph (5), all remaining moneys shall be distributed
based upon each community college’s proportional share of the
three-year rolling average full-time equivalent enrollments
for all community colleges If the presidents of the community
colleges and the chancellors of the community colleges who
serve as the chief executive officers of such community
colleges fail to approve a distribution formula on or before
October 31 pursuant to paragraph “a” , the department shall
establish the distribution formula for general state aid
to the community colleges for the succeeding budget year .
When determining the distribution formula pursuant to this
paragraph, the department shall consider the enrollment
and combined support for each community college, along with
any other factor deemed relevant by the department. The
distribution formula shall not allocate funding to a community
college that is below the general state financial aid the
community college received in any previous budget year, unless
there is a reduction in the base funding allocation.
c. If the inflation rate equals or exceeds four percent:
(1) Base funding allocation. The moneys shall first
be allocated in the amount of general state financial aid
each community college received in the base year. If the
appropriation is less than the total of the amount of general
state financial aid each community college received in the base
year, the moneys shall be allocated in the same proportion as
the allocation of general state financial aid each community
college received in the base year.
(2) Marginal cost adjustment. After the base funding has
been allocated, each community college shall be allocated up to
an additional two percent of its base funding allocation. The
community college’s allocation shall be in the same proportion
as the allocation of general state financial aid each community
college received in the base year.
(3) Three-year rolling average of full-time equivalent
enrollment. If the increase in the total state general aid
exceeds two percent over the base funding allocation, an amount
up to an additional one percent of the base funding allocation
shall be distributed based upon each community college’s
proportional share of the three-year rolling average full-time

Senate File 2405, p. 8
equivalent enrollments for all community colleges.
(4) Inflation adjustment. If the increase in total state
general aid exceeds three percent over the base funding
allocation, an amount up to the inflation adjustment amount
shall be distributed to each community college in the same
proportion as the allocation of general state financial aid
each community college received in the base year.
(5) Extraordinary growth adjustment. If there are
remaining moneys to be distributed under this paragraph after
distributing moneys under subparagraph (4), an amount up to an
additional one percent of the base funding allocation shall be
based as follows:
(a) Forty percent of the moneys shall be allocated based
upon each community college’s proportional share of the
three-year rolling average full-time equivalent enrollments for
all community colleges.
(b) Sixty percent of the moneys shall be allocated to
community colleges that have eligible growth support. The
allocation shall be based upon the proportional share that each
community college’s eligible growth support bears to the total
growth support amount. Once the moneys allocated under this
subparagraph division equal the total growth support amount,
the remaining moneys allocated under this subparagraph shall be
allocated as provided in subparagraph division (a).
(6) Additional three-year rolling average FTEE
allocation. If there are remaining moneys to be distributed
under this paragraph after distributing moneys under
subparagraph (5), all remaining moneys shall be distributed
based upon each community college’s proportional share of the
three-year rolling average full-time equivalent enrollments for
all community colleges.
4. Information supplied by colleges and adoption of rules.
a. Each community college shall provide information in
the manner and form as determined by the department. If
a community college fails to provide the information as
requested, the department shall estimate the full-time
equivalent enrollment of that college.
b. Each community college shall complete and submit an
annual student enrollment audit to the department. Adjustments

Senate File 2405, p. 9
to community college state general aid allocations shall be
made based on student enrollment audit outcomes.
c. The department shall adopt rules under chapter 17A as
necessary for the allocation of general state financial aid.
Sec. 2. APPLICABILITY. This Act applies to budget years
beginning on or after July 1, 2025.
______________________________ ______________________________
AMY SINCLAIR PAT GRASSLEY
President of the Senate Speaker of the House
I hereby certify that this bill originated in the Senate and
is known as Senate File 2405, Ninetieth General Assembly.
______________________________
W. CHARLES SMITHSON
Secretary of the Senate
Approved _______________, 2024 ______________________________
KIM REYNOLDS
Governor