By attorneys Rachel Fritz, Jenna Sabroske and Conner Wasson
On May 17, 2024, Governor Reynolds signed Senate File 2368 into law. The law will require school districts to publish information on all school buildings. The law also imposes new requirements related to district-owned real estate, including that school districts cannot prohibit the sale of real estate to an “educational institution” and, when offering school building properties for sale, school districts must accept a bid from an educational institution, if the educational institution had the highest bid.
Publication of Information on School Buildings
Beginning on July 1, every school district must publish the following information on its website:
1. The square footage of each school building owned by the school district.
2. The enrollment capacity of each attendance center owned by the school district.
3. How each school building owned by the school district is currently utilized by the school district.
4. School buildings owned by the school district that are vacant.
Prohibition on Restrictions Preventing Sale to an Educational Institution
Senate File 2368 prohibits school districts from entering into agreements that prohibit the sale of real property to an “educational institution,” which is defined to include other school districts, nonpublic schools, charter schools under Iowa Code Chapter 256E or 256F, community colleges established under Iowa Code Chapter 260C, the state training school under Iowa Code Chapter 233A, and accredited private institutions as defined in Iowa Code section 256.183. School districts should consult legal counsel to determine the enforceability of existing use restrictions that predate the effective date of Senate File 2368.
Sale of School Building Properties
If a school board offers to sell real estate that contains a building or structure, Senate File 2368 requires the school board to sell the property to an “educational institution” (as defined above) if it submits the highest bid. Moreover, if a school district offers the property for sale and the highest bidder is an educational institution, then the school district must sell the property for the offered highest-bid price. However, purchase agreements already approved and accepted prior to July 1, 2024 will be unaffected by this new requirement, even if the transaction is not closed prior to July 1, 2024, since the new requirement only impacts acceptance of bids.
Senate File 2368 changes the requirements for accepting offers for the sale of school buildings after July 1, 2024. However, no change is being made to the existing public hearing procedural requirements for authorizing a sale of real estate. Moving forward, school districts should seek assistance and guidance from legal counsel on real estate sales to ensure compliance with Senate File 2368.
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