Bill
HF 579
HF 579 lets Iowa districts raise the local MSA cap from 2.5% to 5.0% of regular program cost, but only if voters approve, with a faster phased-in schedule.
Note on bill identity
- The packet you provided contains materials for Iowa House File 579 (2025) concerning dropout-prevention funding and modified supplemental amounts (MSAs). The initial header in your prompt naming a Minnesota project appears to be inconsistent with the bill text and fiscal notes. This summary covers the Iowa HF 579 materials provided.
Summary — purpose and intent
- HF 579 changes how much additional local spending authority (a modified supplemental amount, or MSA) a school district may obtain for programs serving at‑risk students, students in alternative programs/schools, returning dropouts, and dropout‑prevention programs. The bill raises the statutory cap on the MSA ratio from 2.50% of a district’s total regular program district cost to a maximum of 5.00%, phased in over multiple years. Any increase for a district only takes effect if approved by the district’s voters.
Key provisions
- Cap increase: Raises the allowable MSA ratio so the district cap may reach 5.00%.
- Voter approval required: A district must approve the higher limit at election; authorization may be for specified years or until rescinded by later election.
- Ballot and rescission rules: The bill specifies methods and requirements for placing the proposition on the ballot and for rescinding authorization (text references procedure in statute).
- Application timing: Applications to the School Budget Review Committee (SBRC) for FY2027 programming must be filed after Jan 15, 2026 and before Mar 1, 2026 (per existing statute).
- Amendment H‑1042 (adopted by the House) sped up the phase‑in: the cap increases by 0.50 percentage points per year (instead of 0.25) until 5.00% is reached.
Phase‑in schedules
- Original version (0.25% per year): FY2026 2.50%; FY2027 2.75%; … FY2036 5.00%.
- Amended/passed House version (0.50% per year): FY2026 2.50%; FY2027 3.00%; FY2028 3.50%; FY2029 4.00%; FY2030 4.50%; FY2031 5.00%.
Fiscal impact and assumptions
- No State fiscal cost (MSA authority increases are funded via local property tax levies; SBRC authorization does not create additional State aid).
- Fiscal notes (two versions) estimate the maximum increase in local school district spending authority (illustrative maximums assuming all eligible districts adopt and levy the full allowance):
- Amended (house‑passed) estimate: FY2027 +$2.6M; FY2028 +$6.2M; FY2029 +$12.1M; FY2030 +$19.7M; FY2031 +$28.2M (local match estimates included in fiscal note).
- Original (slower ramp) estimate: FY2027 +$1.2M; FY2028 +$2.6M; FY2029 +$4.2M; FY2030 +$6.2M; … FY2036 +$28.2M.
- Election cost: If all ~197 impacted districts hold elections, estimated aggregate election cost to district general funds ≈ $2.6M (assumes $8K–$18K per election; avg $13K).
- Fiscal note assumptions include: districts will apply for and levy the maximum allowed, not reduce other levies, carryforwards = zero, enrollment and costs per pupil constant.
Who is affected
- Local school districts (especially the ~197 districts below 5.00% capacity) — they could gain greater local spending authority for dropout‑prevention/alternative/at‑risk programming if voters approve.
- Local property taxpayers — because MSAs are funded via property tax levies, increased levies are possible where voters approve.
- The SBRC and Department of Education — procedural role in application review; DE expected to update applications at no additional cost.
Legislative status and timeline
- Introduced Feb 24, 2025; House amendment H‑1042 (changing the phase‑in rate to 0.5%/yr) adopted March 12, 2025; passed the House March 12, 2025 (yeas 92, nays 4). Subsequent actions: committee reports and referrals (placed on calendar; referred to Ways & Means Apr 8, 2025). Companion bill: SF 525.
Bottom line
- HF 579 allows Iowa school districts—subject to voter approval—to increase the local MSA cap from 2.5% up to 5.0% of regular program district cost, phased in over several years (House‑passed version reaches 5% by FY20231). The change increases local spending authority (potentially funded by local property taxes) but has no direct State cost.
Compiled from official sources — confirm details with the bill’s official record.
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