Bill Number: S.B. 1007

                                                                                                             Pierce Floor Amendment

                                                                                                              Reference to: printed bill

                                                                                        Amendment drafted by: Leg Council

 

 

• Conforms Capital Outlay Revenue Limit and Soft Capital Allocation references to the establishment of District Additional Assistance.

 

• Conforms statutory references to the Early Graduation Scholarship Program that is repealed by the underlying bill.

 

• Codifies the bonding capacity for common or union high school districts at 10% of the district’s taxable property and at 20% of the district’s taxable property for unified school districts.
1. Specifies that the bonding increases apply to bonds passed in elections held both before and after the effective date of this act.

 

• Eliminates the English Language Learner Online Learning Pilot Program.

 

• Eliminates the appropriation of all monies deposited into the Education Learning and Accountability Fund service fee, donation and grant subaccount for use regarding the Education Learning and Accountability System.

 

• Requires the Department of Education (ADE) to transfer $10,000,000 to the state General Fund from the Arizona Structured English Immersion Fund.

 

School Facilities Board (SFB)

 

• Conforms SFB statute to reflect the repeal of the Building Renewal Fund formula.

 

• Requires school districts to report information required for the administration of the Building Renewal Grant fund no later than September 1, rather than October 15.

 

• Removes the moratorium on New School Construction and establishes qualifications school districts must meet for new construction funding.

 

 

Performance Funding

 

·         Establishes the Performance Incentive Fund (Fund) for school district and charter holder performance funding.

 

·         Requires ADE to distribute monies in the Fund to school districts and charter holders based on the annual achievement profiles compiled by ADE.

 

·         Outlines budgetary procedures and eligibility requirements for school districts and charter schools regarding the Fund.

 

School Emergency Readiness Pilot Program

 

• Requires $100,000 of the $3,646,400 state General Fund appropriation for the School Safety Program for FY 2014 to be used for a pilot program on school emergency readiness.

 

• Outlines membership, procedures and other requirements for the Pilot Program.

 

Fifty-first Legislature                                                    Pierce

First Special Session                                                   S.B. 1007

 

PIERCE FLOOR AMENDMENT

SENATE AMENDMENTS TO S.B. 1007

(Reference to printed bill)

 

Page 1, between lines 10 and 11, insert:

"Sec. 2.  Section 15-107, Arizona Revised Statutes, is amended to read:

START_STATUTE15-107.  School district overexpenditures; fiscal crisis teams; quarterly progress reports; fiscal management report; annual report; actions resulting from overexpenditures; professional development; definition

A.  A county school superintendent, within two business days, shall provide written notice to the department of education, if, in the county school superintendent's judgment, a school district has committed an overexpenditure under this section.  Notwithstanding any other law, a warrant shall not be drawn by a county school superintendent for an expenditure that is in excess of the amount budgeted and that has not been previously expended, unless the county school superintendent is notified in writing by the department of education that budget capacity exists as determined by the department based on information provided by the school district.

B.  The department of education, in conjunction with the county school superintendent, shall monitor the school district and provide technical assistance to the school district and to the county school superintendent to resolve the overexpenditure.

C.  If the department of education determines that the school district has failed to take appropriate action to resolve the overexpenditure or that the original notice of overexpenditure pursuant to subsection A of this section constitutes an overexpenditure that will cause the school district's overall expenditures to exceed the school district's general budget limit,  or unrestricted capital budget limit or soft capital allocation limit by fifty thousand dollars or one-half of one per cent, whichever is less, the department shall request that the matter be placed on the agenda of a meeting of the state board of education for action pursuant to this section.

D.  At the request of the department of education, the state board of education shall call a public meeting to consider overexpenditures by any school district.  The state board of education shall require the superintendent of the school district and any other school district personnel who may have information relevant to the overexpenditure to appear before the state board of education.  After testimony from all interested parties, the state board of education shall take one of the following actions:

1.  Require the department of education, in conjunction with the county school superintendent, to monitor the expenditures of the school district.

2.  Direct the department of education to contract with a level one fiscal crisis team.  The level one fiscal crisis team shall provide on-site oversight and off-site monitoring for the school district for no longer than twelve months and shall advise the school district on all financial issues and professional development training related to financial issues.

3.  Direct the department of education to contract with a level two fiscal crisis team.  The level two fiscal crisis team shall provide on-site oversight and off-site monitoring for the school district for no longer than twenty-four months, shall have the authority prescribed for level one fiscal crisis teams and may override any financial act or decision of the school district, including expenditures.

4.  Appoint a receiver who, subject to the discretion of the state board of education, may take any actions prescribed in section 15-103, subsection F.

E.  The level one and level two fiscal crisis teams shall be composed of at least one person who has knowledge of school finance and may include current or former school district financial officers, current or former school district business managers, certified public accountants and current or former school district superintendents.  The fiscal crisis teams shall not include employees of the state board of education or the department of education.

F.  The expenses incurred by a fiscal crisis team or by a receiver appointed pursuant to this section shall be paid by the school district.  The state board of education shall review the expenses and costs of each fiscal crisis team at least once each calendar quarter.

G.  Beginning ninety days after submitting the fiscal management report prescribed in subsection H of this section, the fiscal crisis team or receiver appointed pursuant to this section shall submit a detailed written quarterly progress report to the state board of education that includes all of the following:

1.  The results of the review of the school district's finances, including expenditures.

2.  The recommendations and decisions made by the fiscal crisis team or the receiver appointed pursuant to this section.

3.  The status of the fiscal management plan described pursuant to subsection H of this section.

4.  Recommendations to the state board of education on the content of professional development training related to overexpenditures.

5.  Any recommendations of potential action to be taken concerning professional certificates issued to school district personnel by the state board of education or the department of education.  The state board of education shall review the recommendations submitted pursuant to this paragraph and shall take appropriate action.

H.  After appointment, the fiscal crisis team or the receiver appointed pursuant to this section shall review the financial affairs of the school district and may work with school finance personnel at the department of education to ensure that the finances of the school district are in compliance with the laws of this state.  A school district that has been assigned a fiscal crisis team or a receiver pursuant to this section shall submit, in consultation with the receiver or the fiscal crisis team, a fiscal management report to the state board of education within one hundred twenty days after the date that the state board of education appointed the receiver or the fiscal crisis team.  The fiscal management report shall include the following:

1.  A description of the fiscal management plan that has been implemented to correct the overexpenditure, including the following:

(a)  The manner in which the fiscal management plan will address the findings and recommendations of the fiscal crisis team.

(b)  A timeline for complete resolution of the overexpenditure.

(c)  A detailed explanation of the methods and procedures that will be implemented to prevent future overexpenditures.

(d)  The identification of any issues that need to be resolved before the fiscal management plan may be fully implemented.

(e)  The identification of any long-term issues resulting from the overexpenditure that will extend to future fiscal years.

2.  A description of the manner in which the fiscal management plan was developed, including identification of the role of the fiscal crisis team or the receiver, the role of the school district governing board and the role of the administrators of the school district.

I.  On or before December 31, the state board of education shall submit an annual report to the governor, the president of the senate and the speaker of the house of representatives.  The state board shall provide a copy of this report to the secretary of state and the director of the Arizona state library, archives and public records.  The annual report shall include the following:

1.  A summarized compilation of the fiscal management reports submitted by school districts pursuant to subsection H of this section.

2.  The actions taken by the state board of education, the department of education, school districts, fiscal crisis teams and receivers during the most recently completed fiscal year.

3.  Recommendations regarding improvements to the laws of this state or to administrative actions required under the laws of this state.

J.  A school district that is assigned a level two fiscal crisis team or a receiver pursuant to this section shall require professional development training for school district governing board members and appropriate administrative personnel of the school district, including the school district superintendent, who are involved in district finances and budgeting, as determined by the level two fiscal crisis team or by the receiver.  The professional development training shall be selected from a list approved by the state board of education, and the cost of the professional development training shall be paid by the school district.  Governing board members and district administrative personnel shall complete at least twelve hours of professional development training within one hundred twenty days after the assignment of a level two fiscal crisis team or the appointment of a receiver.  The fiscal crisis team or the receiver shall report to the state board of education whether the professional development training requirements prescribed in this subsection have been met.

K.  A school district governing board member who fails to complete the professional development training within the time prescribed in subsection J of this section is guilty of nonfeasance in office, and the state board of education shall forward a complaint to the attorney general.  The attorney general may bring an action in superior court against a school district governing board member for failure to comply with the professional development training requirements prescribed in subsection J of this section. If a court determines that a school district governing board member failed to comply with the professional development training requirements prescribed in subsection J of this section, the court shall issue an order removing the school district governing board member from office.  Any vacancy in the office of the school district governing board as a result of a court order issued pursuant to this subsection shall be filled in the manner provided by law.

L.  If any of the administrative personnel of the school district fail fails to complete the professional development training within the time prescribed in subsection J of this section, the state board of education may take appropriate action concerning current certificates held by that person.

M.  All information received and records or reports kept by the state board of education during an investigation resulting from a complaint against a receiver appointed pursuant to this section or section 15‑103 are confidential and not a public record.

N.  For the purposes of this section, "overexpenditure" means an expenditure in excess of any of the following:

1.  The general budget limit of the school district or the amount budgeted by the school district, whichever is less.

2.  The unrestricted capital budget limit of the school district or the amount budgeted for capital by the school district, whichever is less.

3.  The soft capital allocation limit of the school district or the amount budgeted for soft capital by the school district, whichever is less." END_STATUTE

Renumber to conform

Page 2, line 28, after "total" insert "charter"

Page 3, line 8, after "and" insert "charter"

Page 4, line 38, after "the" insert "charter"

Page 5, line 8, after the third "the" insert "charter"

Page 7, strike lines 14 through 45

Strike pages 8 and 9

Page 10, strike lines 1 through 16, insert:

"Sec. 4.  Section 15-241, Arizona Revised Statutes, is amended to read:

START_STATUTE15-241.  School and school district accountability; failing schools tutoring fund; classification label for school districts and charter school operators

A.  The department of education shall compile an annual achievement profile for each public school and school district.

B.  Each school and school district shall submit to the department any data that is required and requested and that is necessary to compile the achievement profile.  A school or school district that fails to submit the information that is necessary is not eligible to receive monies from the classroom site fund established by section 15‑977.

C.  The department shall establish a baseline achievement profile for each school and school district.  The baseline achievement profile shall be used to determine a standard measurement of acceptable academic progress for each school and school district and a school and school district classification pursuant to subsection H of this section.  Any disclosure of educational records compiled by the department of education pursuant to this section shall comply with the family educational rights and privacy act of 1974 (20 United States Code section 1232g).

D.  The achievement profile for schools and school districts that offer instruction in kindergarten programs and grades one through eight, or any combination of those programs or grades, shall include the following school academic performance indicators:

1.  The Arizona measure of academic progress.  The department shall compute the extent of academic progress made by the pupils in each school and school district during the course of each year.

2.  The Arizona instrument to measure standards test.  The department shall compute the percentage of pupils who meet or exceed the standard on the Arizona instrument to measure standards test, as prescribed by the state board of education.  The superintendent of public instruction and the department may calculate academic gain on the Arizona instrument to measure standards test according to each of the school classifications prescribed in subsection G of this section on a statewide basis, for each school district in this state and for each school by determining the average scale scores for students in the current academic year as compared to the average scale scores for the previous academic year for the same students.

3.  The results of English language learners tests administered pursuant to section 15‑756, subsection B, section 15‑756.05 and section 15‑756.06.

E.  The achievement profile for schools and school districts that offer instruction in grades nine through twelve, or any combination of those grades, shall include the following school academic performance indicators:

1.  The Arizona measure of academic progress.  The department shall compute the extent of academic progress made by the pupils at each school.

2.  The Arizona instrument to measure standards test.  The department shall compute the percentage of pupils pursuant to subsection G of this section who meet or exceed the standard on the Arizona instrument to measure standards test, as prescribed by the state board of education.  The superintendent of public instruction and the department may calculate academic gain on the Arizona instrument to measure standards test according to each of the school classifications prescribed in subsection G of this section on a statewide basis, for each school district in this state and for each school by determining the average scale scores for students in the current academic year as compared to the average scale scores for the previous academic year for the same students.

3.  The annual dropout rate.

4.  The annual graduation rate.

5.  The results of English language learners tests administered pursuant to section 15‑756, subsection B, section 15‑756.05 and section 15‑756.06.

F.  Schools and school districts that offer instruction in all or a combination of the grades specified in subsections D and E of this section shall include a single achievement profile for that school and school district that includes the school academic performance indicators specified in subsections D and E of this section.

G.  Subject to final adoption by the state board of education, the department shall determine the criteria for each school and school district classification using a research based methodology.  The methodology shall include the performance of pupils at all achievement levels, account for pupil mobility, account for the distribution of pupil achievement at each school and school district and include longitudinal indicators of academic performance.  Fifty per cent of the school and school district classification determination shall consist of academic performance measurements.  Fifty per cent of the academic performance measurement shall consist of a measurement of academic gain for all pupils enrolled at the school or school district and fifty per cent of the academic performance measurements shall consist of a measurement of the twenty-five per cent of pupils with the lowest academic performance measurement enrolled at the school or school district.  For the purposes of this subsection, "research based methodology" means the systematic and objective application of statistical and quantitative research principles to determine a standard measurement of acceptable academic progress for each school and school district.

H.  Except as provided in subsection EE of this section, the achievement profile shall be used to determine a school and school district classification that uses a letter grade system as follows:

1.  A school or school district assigned a letter grade of A shall demonstrate an excellent level of performance.

2.  A school or school district assigned a letter grade of B shall demonstrate an above average level of performance.

3.  A school or school district assigned a letter grade of C shall demonstrate an average level of performance.

4.  A school or school district assigned a letter grade of D shall demonstrate a below average level of performance.

5.  A school or school district assigned a letter grade of F shall demonstrate a failing level of performance.  The state board of education may also assign a school a letter grade of F if the state board of education determines that the school is among the "persistently lowest-achieving schools" in the state under the federal school accountability requirements pursuant to section 1003(g) of the elementary and secondary education act (20 United States Code section 6303).

I.  The classification for each school and the criteria used to determine classification pursuant to subsection G of this section shall be included on the school report card prescribed in section 15‑746.

J.  Subject to final adoption by the state board of education, the department of education shall develop a parallel achievement profile for accommodation schools, alternative schools as defined by the state board of education and extremely small schools as defined by the state board of education for the purposes of this section.

K.  If a school is assigned a letter grade of D, within ninety days after receiving notice of the designation, the governing board shall develop an improvement plan for the school, submit a copy of the plan to the superintendent of public instruction and the county educational service agency and supervise the implementation of the plan.  The plan shall include necessary components as identified by the state board of education.  Within thirty days after submitting the improvement plan to the superintendent of public instruction and the county educational service agency, the governing board shall hold a special public meeting in each school that has been assigned a letter grade of D and shall present the respective improvement plans that have been developed for each school.  The school district governing board, within thirty days of receiving notice of the designation, shall provide written notification of the classification to each residence within the attendance area of the school.  The notice shall explain the improvement plan process and provide information regarding the public meeting required by this subsection.

L.  A school that has not submitted an improvement plan pursuant to subsection K of this section is not eligible to receive monies from the classroom site fund established by section 15‑977 for every day that a plan has not been received by the superintendent of public instruction within the time specified in subsection K of this section plus an additional ninety days.  The state board of education shall require the superintendent of the school district to testify before the board and explain the reasons that an improvement plan for that school has not been submitted.

M.  If a charter school is assigned a letter grade of D, within thirty days the school shall notify the parents of the students attending the school of the classification.  The notice shall explain the improvement plan process and provide information regarding the public meeting required by this subsection.  Within ninety days of receiving the classification, the charter holder shall present an improvement plan to the charter sponsor at a public meeting and submit a copy of the plan to the superintendent of public instruction.  The improvement plan shall include necessary components as identified by the state board of education.  For every day that an improvement plan is not received by the superintendent of public instruction and the county educational service agency, the school is not eligible to receive monies from the classroom site fund established by section 15‑977 for every day that a plan has not been received by the superintendent of public instruction within the time specified in subsection K of this section plus an additional ninety days.  The charter holder shall appear before the sponsoring board and explain why the improvement plan has not been submitted.

N.  The department of education shall establish an appeals process, to be approved by the state board of education, for a school to appeal data used to determine the achievement profile of the school.  The criteria established shall be based on mitigating factors and may include a visit to the school site by the department of education.

O.  If a school is assigned a letter grade of D for a third consecutive year, the department of education shall visit the school site to confirm the classification data and to review the implementation of the school's improvement plan.  The school shall be assigned a letter grade of F unless an alternate letter grade is assigned after an appeal pursuant to subsection N of this section.  A school that is assigned a letter grade of D for less than three consecutive years may also be assigned a letter grade of F if the state board of education determines that there is no reasonable likelihood that the school will achieve an average level of performance within the next two years.

P.  The school district governing board, within thirty days of receiving notice of the school being assigned a letter grade of F, shall provide written notification of the classification to each residence in the attendance area of the school.  The notice shall explain the improvement plan process and provide information regarding the public meeting required by subsection S of this section.

Q.  The superintendent of public instruction in collaboration with the county educational service agency, based on need, shall assign a solutions team to a school assigned a letter grade of D, a school assigned a letter grade of F or any other school pursuant to a mutual agreement between the department of education and the school comprised composed of master teachers, fiscal analysts and curriculum assessment experts who are certified by the state board of education as Arizona academic standards technicians.  The department of education or the county educational service agency may hire or contract with administrators, principals and teachers who have demonstrated experience with the characteristics and situations in a school assigned a letter grade of D or F and may use these personnel as part of the solutions team.  The department of education shall work with staff at the school to assist in curricula alignment and shall instruct teachers on how to increase pupil academic progress, considering the school's achievement profile.  The solutions team shall consider the existing improvement plan to assess the need for changes to curriculum, professional development and resource allocation and shall present a statement of its findings to the school administrator and district superintendent.  Within forty‑five days after the presentation of the solutions team's statement of findings, the school district governing board, in cooperation with each school within the school district that is assigned a letter grade of D and its assigned solutions team representative, shall develop and submit to the department of education and the county educational service agency an action plan that details the manner in which the school district will assist the school as the school incorporates the findings of the solutions team into the improvement plan.  The department of education shall review the action plan and shall either accept the action plan or return the action plan to the school district for modification.  If the school district does not submit an approved action plan within forty‑five days, the state board of education may direct the superintendent of public instruction to withhold up to ten per cent of state monies that the school district would otherwise be entitled to receive each month until the plan is submitted to the department of education and the county educational service agency, at which time those monies shall be returned to the school district.

R.  The parent or the guardian of the pupil may apply to the department of education, in a manner determined by the department of education, for a certificate of supplemental instruction from the failing schools tutoring fund established by this section.  Pupils attending a school assigned a letter grade of D or F or a pupil who has failed to pass one or more portions of the Arizona instrument to measure standards test in grades eight through twelve in order to graduate from high school may select an alternative tutoring program in academic standards from a provider that is certified by the state board of education.  To qualify, the provider must state in writing a level of academic improvement for the pupil that includes a timeline for improvement that is agreed to by the parent or guardian of the pupil.  The state board of education shall annually review academic performance levels for providers certified pursuant to this subsection and may remove a provider at a public hearing from an approved list of providers if that provider fails to meet its stated level of academic improvement.  The state board of education shall determine the application guidelines and the maximum value for each certificate of supplemental instruction.  The state board of education shall annually complete a market survey in order to determine the maximum value for each certificate of supplemental instruction.  This subsection shall not be construed to require the state to provide additional monies beyond the monies provided pursuant to section 42‑5029, subsection E, paragraph 7.

S.  Within sixty days of receiving notification of a school being assigned a letter grade of F, the school district governing board shall evaluate needed changes to the existing improvement plan for the school, consider recommendations from the solutions team, submit a copy of the plan to the superintendent of public instruction and the county educational service agency and supervise the implementation of the plan.  Within thirty days after submitting the improvement plan to the superintendent of public instruction, the governing board shall hold a public meeting in each school that has been assigned a letter grade of F and shall present the respective improvement plans that have been developed for each school.

T.  A school that has not submitted an improvement plan pursuant to subsection S of this section is not eligible to receive monies from the classroom site fund established by section 15‑977 for every day that a plan has not been received by the superintendent of public instruction within the time specified in subsection S of this section plus an additional ninety days.  The state board of education shall require the superintendent of the school district to testify before the board and explain the reasons that an improvement plan for that school has not been submitted.

U.  If a charter school is assigned a letter grade of F, the department of education shall immediately notify the charter school's sponsor.  The charter school's sponsor shall either take action to restore the charter school to acceptable performance or revoke the charter school's charter.  Within thirty days the school shall notify the parents of the students attending the school of the classification and of any pending public meetings to review the issue.

V.  A school that has been assigned a letter grade of F shall be evaluated by the department of education to determine if the school failed to properly implement its school improvement plan, align the curriculum with academic standards, provide teacher training, prioritize the budget or implement other proven strategies to improve academic performance.  After visiting the school site pursuant to subsection O of this section, the department of education shall submit to the state board of education a recommendation to proceed pursuant to subsections Q, R and S of this section or that the school be subject to a public hearing to determine if the school failed to properly implement its improvement plan and the reasons for the department's recommendation.

W.  If the department does recommend a public hearing, the state board of education shall meet and may provide by a majority vote at the public hearing for the continued operation of the school as allowed by this subsection.  The state board of education shall determine whether governmental, nonprofit and private organizations may submit applications to the state board to fully or partially manage the school.  The state board's determination shall include:

1.  If and to what extent the local governing board may participate in the operation of the school including personnel matters.

2.  If and to what extent the state board of education shall participate in the operation of the school.

3.  Resource allocation pursuant to subsection Y of this section.

4.  Provisions for the development and submittal of a school improvement plan to be presented in a public meeting at the school.

5.  A suggested time frame for the alternative operation of the school.

X.  The state board shall periodically review the status of a school that is operated by an organization other than the school district governing board to determine whether the operation of the school should be returned to the school district governing board.  Before the state board makes a determination, the state board or its designee shall meet with the school district governing board or its designee to determine the time frame, operational considerations and the appropriate continuation of existing improvements that are necessary to assure a smooth transition of authority from the other organization back to the school district governing board.

Y.  If an alternative operation plan is provided pursuant to subsection W of this section, the state board of education shall pay for the operation of the school and shall adjust the school district's soft capital allocation pursuant to section 15‑962, capital outlay revenue limit district additional assistance pursuant to section 15‑961, base support level pursuant to section 15‑943, monies distributed from the classroom site fund established by section 15‑977 and transportation support level pursuant to section 15‑945 to accurately reflect any reduction in district services that are no longer provided to that school by the district.  The state board of education may modify the school district's revenue control limit, the district support level and the general budget limit calculated pursuant to section 15‑947 by an amount that corresponds to this reduction in services.  The state board of education shall retain the portion of state aid that would otherwise be due the school district for the school and shall distribute that portion of state aid directly to the organization that contracts with the state board of education to operate the school.

Z.  If the state board of education determines that a charter school failed to properly implement its improvement plan, the sponsor of the charter school shall revoke the charter school's charter.

AA.  If there are more than two schools in a district and more than one‑half, or in any case more than five, of the schools in the district are assigned a letter grade of F for more than two consecutive years, in the next election of members of the governing board the election ballot shall contain the following statement immediately above the listing of governing board candidates:

Within the last five years, (number of schools) schools in the ________ school district have been assigned a letter grade of F or designated as "schools failing to meet academic standards" by the superintendent of public instruction.

BB.  At least twice each year the department of education shall publish in a newspaper of general circulation in each county of this state a list of schools that are assigned a letter grade of F.

CC.  The failing schools tutoring fund is established consisting of monies collected pursuant to section 42‑5029, subsection E as designated for this purpose.  The department of education shall administer the fund.  The department of education may use monies from the fund to purchase materials designed to assist students to meet the Arizona academic standards and to achieve a passing score on the Arizona instrument to measure standards test in order to graduate from high school.

DD.  The department of education may develop a classification label for school districts and charter school operators.  If the department of education develops a classification label for school districts and charter school operators, the classification label may be developed from the following components:

1.  Measures of academic progress.

2.  Pupil assessment data.

3.  The attendance rates and graduation rates of pupils who are educated in that charter school operator's charter schools or in that school district's schools.

4.  The percentage of the parents of pupils enrolled in that charter school operator's charter schools or in that school district's schools that categorizes the quality of their child's education as excellent on a parental rating of school quality.

EE.  The state board of education shall determine appropriate modifications to the criteria used to calculate achievement profiles for schools that participate in the board examination system prescribed in chapter 7, article 6 of this title.

FF.  The state board of education shall adopt guidelines to include supplementary training in reading instruction for teachers who provide instruction to pupils in a kindergarten program or grade one, two or three in an improvement plan pursuant to subsection K of this section.

GG.  In addition to any other corrective procedures prescribed in this section and section 15‑241.01, a school that has been assigned a letter grade of D or F for two consecutive years shall implement a science, technology, engineering and mathematics intervention strategy under the supervision of the state board of education.

HH.  In addition to any other corrective procedures prescribed in this section a school district that has been assigned a letter grade of D or F for two consecutive years shall implement a parent involvement strategy.  The parent involvement strategy shall be included in the school improvement plans plan for each applicable school within the district, as prescribed in subsection K of this section." END_STATUTE

Renumber to conform

Page 10, between lines 24 and 25, insert:

"Sec. 6.  Section 15-341, Arizona Revised Statutes, is amended to read:

START_STATUTE15-341.  General powers and duties; immunity; delegation

A.  The governing board shall:

1.  Prescribe and enforce policies and procedures for the governance of the schools, not inconsistent with law or rules prescribed by the state board of education.

2.  Exclude from schools all books, publications, papers or audiovisual materials of a sectarian, partisan or denominational character.  This paragraph shall not be construed to prohibit the elective course permitted by section 15‑717.01.

3.  Manage and control the school property within its district.

4.  Acquire school furniture, apparatus, equipment, library books and supplies for the use of the schools.

5.  Prescribe the curricula and criteria for the promotion and graduation of pupils as provided in sections 15‑701 and 15‑701.01.

6.  Furnish, repair and insure, at full insurable value, the school property of the district.

7.  Construct school buildings on approval by a vote of the district electors.

8.  Make in the name of the district conveyances of property belonging to the district and sold by the board.

9.  Purchase school sites when authorized by a vote of the district at an election conducted as nearly as practicable in the same manner as the election provided in section 15‑481 and held on a date prescribed in section 15‑491, subsection E, but such authorization shall not necessarily specify the site to be purchased and such authorization shall not be necessary to exchange unimproved property as provided in section 15‑342, paragraph 23.

10.  Construct, improve and furnish buildings used for school purposes when such buildings or premises are leased from the national park service.

11.  Purchase school sites or construct, improve and furnish school buildings from the proceeds of the sale of school property only on approval by a vote of the district electors.

12.  Hold pupils to strict account for disorderly conduct on school property.

13.  Discipline students for disorderly conduct on the way to and from school.

14.  Except as provided in section 15‑1224, deposit all monies received by the district as gifts, grants and devises with the county treasurer who shall credit the deposits as designated in the uniform system of financial records.  If not inconsistent with the terms of the gifts, grants and devises given, any balance remaining after expenditures for the intended purpose of the monies have been made shall be used for reduction of school district taxes for the budget year, except that in the case of accommodation schools the county treasurer shall carry the balance forward for use by the county school superintendent for accommodation schools for the budget year.

15.  Provide that, if a parent or legal guardian chooses not to accept a decision of the teacher as provided in section 15‑521, paragraph 3  4, the parent or legal guardian may request in writing that the governing board review the teacher's decision.  This paragraph shall not be construed to release school districts from any liability relating to a child's promotion or retention.

16.  Provide for adequate supervision over pupils in instructional and noninstructional activities by certificated or noncertificated personnel.

17.  Use school monies received from the state and county school apportionment exclusively for payment of salaries of teachers and other employees and contingent expenses of the district.

18.  Make an annual report to the county school superintendent on or before October 1 in the manner and form and on the blanks prescribed by the superintendent of public instruction or county school superintendent.  The board shall also make reports directly to the county school superintendent or the superintendent of public instruction whenever required.

19.  Deposit all monies received by school districts other than student activities monies or monies from auxiliary operations as provided in sections 15‑1125 and 15‑1126 with the county treasurer to the credit of the school district except as provided in paragraph 20 of this subsection and sections 15‑1223 and 15‑1224, and the board shall expend the monies as provided by law for other school funds.

20.  Establish bank accounts in which the board during a month may deposit miscellaneous monies received directly by the district.  The board shall remit monies deposited in the bank accounts at least monthly to the county treasurer for deposit as provided in paragraph 19 of this subsection and in accordance with the uniform system of financial records.

21.  Prescribe and enforce policies and procedures for disciplinary action against a teacher who engages in conduct that is a violation of the policies of the governing board but that is not cause for dismissal of the teacher or for revocation of the certificate of the teacher.  Disciplinary action may include suspension without pay for a period of time not to exceed ten school days.  Disciplinary action shall not include suspension with pay or suspension without pay for a period of time longer than ten school days. The procedures shall include notice, hearing and appeal provisions for violations that are cause for disciplinary action.  The governing board may designate a person or persons to act on behalf of the board on these matters.

22.  Prescribe and enforce policies and procedures for disciplinary action against an administrator who engages in conduct that is a violation of the policies of the governing board regarding duties of administrators but that is not cause for dismissal of the administrator or for revocation of the certificate of the administrator.  Disciplinary action may include suspension without pay for a period of time not to exceed ten school days.  Disciplinary action shall not include suspension with pay or suspension without pay for a period of time longer than ten school days.  The procedures shall include notice, hearing and appeal provisions for violations that are cause for disciplinary action.  The governing board may designate a person or persons to act on behalf of the board on these matters.  For violations that are cause for dismissal, the provisions of notice, hearing and appeal in chapter 5, article 3 of this title shall apply.  The filing of a timely request for a hearing suspends the imposition of a suspension without pay or a dismissal pending completion of the hearing.

23.  Notwithstanding sections 13‑3108 and 13‑3120, prescribe and enforce policies and procedures that prohibit a person from carrying or possessing a weapon on school grounds unless the person is a peace officer or has obtained specific authorization from the school administrator.

24.  Prescribe and enforce policies and procedures relating to the health and safety of all pupils participating in district sponsored practice sessions or games or other interscholastic athletic activities, including:

(a)  The provision of water.

(b)  Guidelines, information and forms, developed in consultation with a statewide private entity that supervises interscholastic activities, to inform and educate coaches, pupils and parents of the dangers of concussions and head injuries and the risks of continued participation in athletic activity after a concussion.  The policies and procedures shall require that, before a pupil participates in an athletic activity, the pupil and the pupil's parent must sign an information form at least once each school year that states that the parent is aware of the nature and risk of concussion.  The policies and procedures shall require that a pupil who is suspected of sustaining a concussion in a practice session, game or other interscholastic athletic activity be immediately removed from the athletic activity.  A coach from the pupil's team or an official or a licensed health care provider may remove a pupil from play.  A team parent may also remove the parent's own child from play.  A pupil may return to play on the same day if a health care provider rules out a suspected concussion at the time the pupil is removed from play.  On a subsequent day, the pupil may return to play if the pupil has been evaluated by and received written clearance to resume participation in athletic activity from a health care provider who has been trained in the evaluation and management of concussions and head injuries.  A health care provider who is a volunteer and who provides clearance to participate in athletic activity on the day of the suspected injury or on a subsequent day is immune from civil liability with respect to all decisions made and actions taken that are based on good faith implementation of the requirements of this subdivision, except in cases of gross negligence or wanton or wilful neglect. A school district, school district employee, team coach, official or team volunteer or a parent or guardian of a team member is not subject to civil liability for any act, omission or policy undertaken in good faith to comply with the requirements of this subdivision or for a decision made or an action taken by a health care provider.  A group or organization that uses property or facilities owned or operated by a school district for athletic activities shall comply with the requirements of this subdivision.  A school district and its employees and volunteers are not subject to civil liability for any other person or organization's failure or alleged failure to comply with the requirements of this subdivision.  This subdivision does not apply to teams that are based in another state and that participate in an athletic activity in this state.  For the purposes of this subdivision, athletic activity does not include dance, rhythmic gymnastics, competitions or exhibitions of academic skills or knowledge or other similar forms of physical noncontact activities, civic activities or academic activities, whether engaged in for the purposes of competition or recreation. For the purposes of this subdivision, "health care provider" means a physician who is licensed pursuant to title 32, chapter 13 or 17, an athletic trainer who is licensed pursuant to title 32, chapter 41, a nurse practitioner who is licensed pursuant to title 32, chapter 15, and a physician assistant who is licensed pursuant to title 32, chapter 25.

25.  Prescribe and enforce policies and procedures regarding the smoking of tobacco within school buildings.  The policies and procedures shall be adopted in consultation with school district personnel and members of the community and shall state whether smoking is prohibited in school buildings. If smoking in school buildings is not prohibited, the policies and procedures shall clearly state the conditions and circumstances under which smoking is permitted, those areas in a school building that may be designated as smoking areas and those areas in a school building that may not be designated as smoking areas.

26.  Establish an assessment, data gathering and reporting system as prescribed in chapter 7, article 3 of this title.

27.  Provide special education programs and related services pursuant to section 15‑764, subsection A to all children with disabilities as defined in section 15‑761.

28.  Administer competency tests prescribed by the state board of education for the graduation of pupils from high school.

29.  Ensure that insurance coverage is secured for all construction projects for purposes of general liability, property damage and workers' compensation and secure performance and payment bonds for all construction projects.

30.  Keep on file the resumes of all current and former employees who provide instruction to pupils at a school.  Resumes shall include an individual's educational and teaching background and experience in a particular academic content subject area.  A school district shall inform parents and guardians of the availability of the resume information and shall make the resume information available for inspection on request of parents and guardians of pupils enrolled at a school.  This paragraph shall not be construed to require any school to release personally identifiable information in relation to any teacher or employee, including the teacher's or employee's address, salary, social security number or telephone number.

31.  Report to local law enforcement agencies any suspected crime against a person or property that is a serious offense as defined in section 13-706 or that involves a deadly weapon or dangerous instrument or serious physical injury and any conduct that poses a threat of death or serious physical injury to employees, students or anyone on the property of the school.  This paragraph does not limit or preclude the reporting by a school district or an employee of a school district of suspected crimes other than those required to be reported by this paragraph.  For the purposes of this paragraph, "dangerous instrument", "deadly weapon" and "serious physical injury" have the same meanings prescribed in section 13‑105.

32.  In conjunction with local law enforcement agencies and local medical facilities, develop an emergency response plan for each school in the school district in accordance with minimum standards developed jointly by the department of education and the division of emergency management within the department of emergency and military affairs.

33.  Provide written notice to the parents or guardians of all students affected in the school district at least ten days prior to a public meeting to discuss closing a school within the school district.  The notice shall include the reasons for the proposed closure and the time and place of the meeting.  The governing board shall fix a time for a public meeting on the proposed closure no less than ten days before voting in a public meeting to close the school.  The school district governing board shall give notice of the time and place of the meeting.  At the time and place designated in the notice, the school district governing board shall hear reasons for or against closing the school.  The school district governing board is exempt from this paragraph if it is determined by the governing board that the school shall be closed because it poses a danger to the health or safety of the pupils or employees of the school.  A governing board may consult with the school facilities board for technical assistance and for information on the impact of closing a school.  The information provided from the school facilities board shall not require the governing board to take or not take any action.

34.  Incorporate instruction on Native American history into appropriate existing curricula.

35.  Prescribe and enforce policies and procedures allowing pupils who have been diagnosed with anaphylaxis by a health care provider licensed pursuant to title 32, chapter 13, 14, 17 or 25 or by a registered nurse practitioner licensed and certified pursuant to title 32, chapter 15 to carry and self-administer emergency medications, including auto‑injectable epinephrine, while at school and at school sponsored activities.  The pupil's name on the prescription label on the medication container or on the medication device and annual written documentation from the pupil's parent or guardian to the school that authorizes possession and self-administration is sufficient proof that the pupil is entitled to the possession and self‑administration of the medication.  The policies shall require a pupil who uses auto-injectable epinephrine while at school and at school sponsored activities to notify the nurse or the designated school staff person of the use of the medication as soon as practicable.  A school district and its employees are immune from civil liability with respect to all decisions made and actions taken that are based on good faith implementation of the requirements of this paragraph, except in cases of wanton or wilful neglect.

36.  Allow the possession and self-administration of prescription medication for breathing disorders in handheld inhaler devices by pupils who have been prescribed that medication by a health care professional licensed pursuant to title 32.  The pupil's name on the prescription label on the medication container or on the handheld inhaler device and annual written documentation from the pupil's parent or guardian to the school that authorizes possession and self-administration shall be sufficient proof that the pupil is entitled to the possession and self‑administration of the medication.  A school district and its employees are immune from civil liability with respect to all decisions made and actions taken that are based on a good faith implementation of the requirements of this paragraph.

37.  Prescribe and enforce policies and procedures to prohibit pupils from harassing, intimidating and bullying other pupils on school grounds, on school property, on school buses, at school bus stops, at school sponsored events and activities and through the use of electronic technology or electronic communication on school computers, networks, forums and mailing lists that include the following components:

(a)  A procedure for pupils, parents and school district employees to confidentially report to school officials incidents of harassment, intimidation or bullying.  The school shall make available written forms designed to provide a full and detailed description of the incident and any other relevant information about the incident.

(b)  A requirement that school district employees report in writing suspected incidents of harassment, intimidation or bullying to the appropriate school official and a description of appropriate disciplinary procedures for employees who fail to report suspected incidents that are known to the employee.

(c)  A requirement that, at the beginning of each school year, school officials provide all pupils with a written copy of the rights, protections and support services available to a pupil who is an alleged victim of an incident reported pursuant to this paragraph.

(d)  If an incident is reported pursuant to this paragraph, a requirement that school officials provide a pupil who is an alleged victim of the incident with a written copy of the rights, protections and support services available to that pupil.

(e)  A formal process for the documentation of reported incidents of harassment, intimidation or bullying and for the confidentiality, maintenance and disposition of this documentation.  School districts shall maintain documentation of all incidents reported pursuant to this paragraph for at least six years.  The school shall not use that documentation to impose disciplinary action unless the appropriate school official has investigated and determined that the reported incidents of harassment, intimidation or bullying occurred. If a school provides documentation of reported incidents to persons other than school officials or law enforcement, all individually identifiable information shall be redacted.

(f)  A formal process for the investigation by the appropriate school officials of suspected incidents of harassment, intimidation or bullying, including procedures for notifying the alleged victim on completion and disposition of the investigation.

(g)  Disciplinary procedures for pupils who have admitted or been found to have committed incidents of harassment, intimidation or bullying.

(h)  A procedure that sets forth consequences for submitting false reports of incidents of harassment, intimidation or bullying.

(i)  Procedures designed to protect the health and safety of pupils who are physically harmed as the result of incidents of harassment, intimidation and bullying, including, if appropriate, procedures to contact emergency medical services or law enforcement agencies, or both.

(j)  Definitions of harassment, intimidation and bullying.

38.  Prescribe and enforce policies and procedures regarding changing or adopting attendance boundaries that include the following components:

(a)  A procedure for holding public meetings to discuss attendance boundary changes or adoptions that allows public comments.

(b)  A procedure to notify the parents or guardians of the students affected.

(c)  A procedure to notify the residents of the households affected by the attendance boundary changes.

(d)  A process for placing public meeting notices and proposed maps on the school district's website for public review, if the school district maintains a website.

(e)  A formal process for presenting the attendance boundaries of the affected area in public meetings that allows public comments.

(f)  A formal process for notifying the residents and parents or guardians of the affected area as to the decision of the governing board on the school district's website, if the school district maintains a website.

(g)  A formal process for updating attendance boundaries on the school district's website within ninety days of an adopted boundary change.  The school district shall send a direct link to the school district's attendance boundaries website to the department of real estate.

(h)  If the land that a school was built on was donated within the past five years, a formal process to notify the entity that donated the land affected by the decision of the governing board.

39.  If the state board of education determines that the school district has committed an overexpenditure as defined in section 15-107, provide a copy of the fiscal management report submitted pursuant to section 15-107, subsection H on its website and make copies available to the public on request.  The school district shall comply with a request within five business days after receipt.

40.  Ensure that the contract for the superintendent is structured in a manner in which up to twenty per cent of the total annual salary included for the superintendent in the contract is classified as performance pay.  This paragraph shall not be construed to require school districts to increase total compensation for superintendents.  Unless the school district governing board votes to implement an alternative procedure at a public meeting called for this purpose, the performance pay portion of the superintendent's total annual compensation shall be determined as follows:

(a)  Twenty‑five per cent of the performance pay shall be determined based on the percentage of academic gain determined by the department of education of pupils who are enrolled in the school district compared to the academic gain achieved by the highest ranking of the fifty largest school districts in this state.  For the purposes of this subdivision, the department of education shall determine academic gain by the academic growth achieved by each pupil who has been enrolled at the same school in a school district for at least five consecutive months measured against that pupil's academic results in the 2008‑2009 school year.  For the purposes of this subdivision, of the fifty largest school districts in this state, the school district with pupils who demonstrate the highest statewide percentage of overall academic gain measured against academic results for the 2008‑2009 school year shall be assigned a score of 100 and the school district with pupils who demonstrate the lowest statewide percentage of overall academic gain measured against academic results for the 2008‑2009 school year shall be assigned a score of 0.

(b)  Twenty‑five per cent of the performance pay shall be determined by the percentage of parents of pupils who are enrolled at the school district who assign a letter grade of "A" to the school on a survey of parental satisfaction with the school district.  The parental satisfaction survey shall be administered and scored by an independent entity that is selected by the governing board and that demonstrates sufficient expertise and experience to accurately measure the results of the survey.  The parental satisfaction survey shall use standard random sampling procedures and provide anonymity and confidentiality to each parent who participates in the survey.  The letter grade scale used on the parental satisfaction survey shall direct parents to assign one of the following letter grades:

(i)  A letter grade of "A" if the school district is excellent.

(ii)  A letter grade of "B" if the school district is above average.

(iii)  A letter grade of "C" if the school district is average.

(iv)  A letter grade of "D" if the school district is below average.

(v)  A letter grade of "F" if the school district is a failure.

(c)  Twenty‑five per cent of the performance pay shall be determined by the percentage of teachers who are employed at the school district and who assign a letter grade of "A" to the school on a survey of teacher satisfaction with the school.  The teacher satisfaction survey shall be administered and scored by an independent entity that is selected by the governing board and that demonstrates sufficient expertise and experience to accurately measure the results of the survey.  The teacher satisfaction survey shall use standard random sampling procedures and provide anonymity and confidentiality to each teacher who participates in the survey.  The letter grade scale used on the teacher satisfaction survey shall direct teachers to assign one of the following letter grades:

(i)  A letter grade of "A" if the school district is excellent.

(ii)  A letter grade of "B" if the school district is above average.

(iii)  A letter grade of "C" if the school district is average.

(iv)  A letter grade of "D" if the school district is below average.

(v)  A letter grade of "F" if the school district is a failure.

(d)  Twenty‑five per cent of the performance pay shall be determined by other criteria selected by the governing board.

41.  Maintain and store permanent public records of the school district as required by law.  Notwithstanding section 39‑101, the standards adopted by the Arizona state library, archives and public records for the maintenance and storage of school district public records shall allow school districts to elect to satisfy the requirements of this paragraph by maintaining and storing these records either on paper or in an electronic format, or a combination of a paper and electronic format.

42.  Adopt in a public meeting and implement by school year 2013‑2014 policies for principal evaluations.  Before the adoption of principal evaluation policies, the school district governing board shall provide opportunities for public discussion on the proposed policies.  The policies shall describe:

(a)  The principal evaluation instrument, including the four performance classifications adopted by the governing board pursuant to section 15‑203, subsection A, paragraph 38.

(b)  Alignment of professional development opportunities to the principal evaluations.

(c)  Incentives for principals in one of the two highest performance classifications pursuant to section 15‑203, subsection A, paragraph 38, which may include:

(i)  Multiyear contracts pursuant to section 15‑503.

(ii)  Incentives to work at schools that are assigned a letter grade of D or F pursuant to section 15‑241.

(d)  Transfer and contract processes for principals designated in the lowest performance classification pursuant to section 15‑203, subsection A, paragraph 38.

B.  Notwithstanding subsection A, paragraphs 7, 9 and 11 of this section, the county school superintendent may construct, improve and furnish school buildings or purchase or sell school sites in the conduct of an accommodation school.

C.  If any school district acquires real or personal property, whether by purchase, exchange, condemnation, gift or otherwise, the governing board shall pay to the county treasurer any taxes on the property that were unpaid as of the date of acquisition, including penalties and interest.  The lien for unpaid delinquent taxes, penalties and interest on property acquired by a school district:

1.  Is not abated, extinguished, discharged or merged in the title to the property.

2.  Is enforceable in the same manner as other delinquent tax liens.

D.  The governing board may not locate a school on property that is less than one‑fourth mile from agricultural land regulated pursuant to section 3‑365, except that the owner of the agricultural land may agree to comply with the buffer zone requirements of section 3‑365.  If the owner agrees in writing to comply with the buffer zone requirements and records the agreement in the office of the county recorder as a restrictive covenant running with the title to the land, the school district may locate a school within the affected buffer zone.  The agreement may include any stipulations regarding the school, including conditions for future expansion of the school and changes in the operational status of the school that will result in a breach of the agreement.

E.  A school district, its governing board members, its school council members and its employees are immune from civil liability for the consequences of adoption and implementation of policies and procedures pursuant to subsection A of this section and section 15‑342.  This waiver does not apply if the school district, its governing board members, its school council members or its employees are guilty of gross negligence or intentional misconduct.

F.  A governing board may delegate in writing to a superintendent, principal or head teacher the authority to prescribe procedures that are consistent with the governing board's policies.

G.  Notwithstanding any other provision of this title, a school district governing board shall not take any action that would result in a reduction of pupil square footage unless the governing board notifies the school facilities board established by section 15‑2001 of the proposed action and receives written approval from the school facilities board to take the action.  A reduction includes an increase in administrative space that results in a reduction of pupil square footage or sale of school sites or buildings, or both.  A reduction includes a reconfiguration of grades that results in a reduction of pupil square footage of any grade level.  This subsection does not apply to temporary reconfiguration of grades to accommodate new school construction if the temporary reconfiguration does not exceed one year.  The sale of equipment that results in a reduction that falls below the equipment requirements prescribed in section 15‑2011, subsection B is subject to commensurate withholding of school district capital outlay revenue limit district additional assistance monies pursuant to the direction of the school facilities board.  Except as provided in section 15‑342, paragraph 10, proceeds from the sale of school sites, buildings or other equipment shall be deposited in the school plant fund as provided in section 15‑1102.

H.  Subsections C through G of this section apply to a county board of supervisors and a county school superintendent when operating and administering an accommodation school. END_STATUTE

Sec. 7.  Section 15-393, Arizona Revised Statutes, is amended to read:

START_STATUTE15-393.  Joint technical education district governing board; report; definition

A.  The management and control of the joint district are vested in the joint technical education district governing board, including the content and quality of the courses offered by the district, the quality of teachers who provide instruction on behalf of the district, the salaries of teachers who provide instruction on behalf of the district and the reimbursement of other entities for the facilities used by the district.  Unless the governing boards of the school districts participating in the formation of the joint district vote to implement an alternative election system as provided in subsection B of this section, the joint board shall consist of five members elected from five single member districts formed within the joint district.  The single member district election system shall be submitted as part of the plan for the joint district pursuant to section 15‑392 and shall be established in the plan as follows:

1.  The governing boards of the school districts participating in the formation of the joint district shall define the boundaries of the single member districts so that the single member districts are as nearly equal in population as is practicable, except that if the joint district lies in part in each of two or more counties, at least one single member district may be entirely within each of the counties comprising the joint district if this district design is consistent with the obligation to equalize the population among single member districts.

2.  The boundaries of each single member district shall follow election precinct boundary lines, as far as practicable, in order to avoid further segmentation of the precincts.

3.  A person who is a registered voter of this state and who is a resident of the single member district is eligible for election to the office of joint board member from the single member district.  The terms of office of the members of the joint board shall be as prescribed in section 15‑427, subsection B.  An employee of a joint technical education district or the spouse of an employee shall not hold membership on a governing board of a joint technical education district by which the employee is employed.  A member of one school district governing board or joint technical education district governing board is ineligible to be a candidate for nomination or election to or serve simultaneously as a member of any other governing board, except that a member of a governing board may be a candidate for nomination or election for any other governing board if the member is serving in the last year of a term of office.  A member of a governing board shall resign the member's seat on the governing board before becoming a candidate for nomination or election to the governing board of any other school district or joint technical education district, unless the member of the governing board is serving in the last year of a term of office.

4.  Nominating petitions shall be signed by the number of qualified electors of the single member district as provided in section 16‑322.

B.  The governing boards of the school districts participating in the formation of the joint district may vote to implement any other alternative election system for the election of joint district board members.  If an alternative election system is selected, it shall be submitted as part of the plan for the joint district pursuant to section 15‑392, and the implementation of the system shall be as approved by the United States justice department.

C.  The joint technical education district shall be subject to the following provisions of this title:

1.  Chapter 1, articles 1 through 6.

2.  Sections 15‑208, 15‑210, 15‑213 and 15‑234.

3.  Articles 2, 3 and 5 of this chapter.

4.  Section 15‑361.

5.  Chapter 4, articles 1, 2 and 5.

6.  Chapter 5, articles 1, 2 and 3.

7.  Sections 15‑701.01, 15‑722, 15‑723, 15‑724, 15‑727, 15‑728, 15‑729 and 15‑730.

8.  Chapter 7, article 5.

9.  Chapter 8, articles 1, 3 and 4.

10.  Sections 15‑828 and 15‑829.

11.  Chapter 9, article 1, article 6, except for section 15‑995, and article 7.

12.  Sections 15‑941, 15‑943.01, 15‑948, 15‑952, 15‑953 and 15‑973.

13.  Sections 15‑1101 and 15‑1104.

14.  Chapter 10, articles 2, 3, 4 and 8.

D.  Notwithstanding subsection C of this section, the following apply to a joint technical education district:

1.  A joint district may issue bonds for the purposes specified in section 15‑1021 and in chapter 4, article 5 of this title to an amount in the aggregate, including the existing indebtedness, not exceeding one per cent of the taxable property used for secondary tax purposes, as determined pursuant to title 42, chapter 15, article 1, within the joint technical education district as ascertained by the last property tax assessment previous to issuing the bonds.

2.  The number of governing board members for a joint district shall be as prescribed in subsection A of this section.

3.  If a career and technical education course or program provided pursuant to this article is provided in a facility owned or operated by a school district in which a pupil is enrolled, including satellite courses, the sum of the average daily membership, as provided in section 15‑901, subsection A, paragraph 1, for that pupil in both the school district and joint technical education district shall not exceed 1.25.  The sum of the average daily membership, as provided in section 15‑901, subsection A, paragraph 1, shall not exceed 1.25 for the courses taken in the school district and the facility, including satellite courses.  The school district and the joint district shall determine the apportionment of the average daily membership for that pupil between the school district and the joint district.

4.  The student count for the first year of operation of a joint technical education district as provided in this article shall be determined as follows:

(a)  Determine the estimated student count for joint district classes that will operate in the first year of operation.  This estimate shall be based on actual registration of pupils as of March 30 scheduled to attend classes that will be operated by the joint district.  The student count for the district of residence of the pupils registered at the joint district shall be adjusted.  The adjustment shall cause the district of residence to reduce the student count for the pupil to reflect the courses to be taken at the joint district.  The district of residence shall review and approve the adjustment of its own student count as provided in this subdivision before the pupils from the school district can be added to the student count of the joint district.

(b)  The student count for the new joint district shall be the student count as determined in subdivision (a) of this paragraph.

(c)  For the first year of operation, the joint district shall revise the student count to the actual average daily membership as prescribed in section 15‑901, subsection A, paragraph 1 for students attending classes in the joint district.  A joint district shall revise its student count, the base support level as provided in section 15‑943.02, the revenue control limit as provided in section 15‑944.01, the capital outlay revenue limit and the soft capital allocation and the district additional assistance as provided in section 15‑962.01 prior to May 15. A joint district that overestimated its student count shall revise its budget prior to May 15.  A joint district that underestimated its student count may revise its budget prior to May 15.

(d)  After March 15 of the first year of operation, the district of residence shall adjust its student count by reducing it to reflect the courses actually taken at the joint district.  The district of residence shall revise its student count, the base support level as provided in section 15‑943, the revenue control limit as provided in section 15‑944, the capital outlay revenue limit as provided in section 15‑961 and the soft capital allocation and the district additional assistance as provided in section 15‑962 15‑962.01 prior to May 15.  A district that underestimated the student count for students attending the joint district shall revise its budget prior to May 15.  A district that overestimated the student count for students attending the joint district may revise its budget prior to May 15.

(e)  A joint district for the first year of operation shall not be eligible for adjustment pursuant to section 15-948.

(f)  The procedures for implementing this paragraph shall be as prescribed in the uniform system of financial records.

(g)  Pupils in an approved joint technical education district centralized program may generate an average daily membership of 1.0 during any day of the week and at any time between July 1 and June 30 of each fiscal year.

For the purposes of this paragraph, "district of residence" means the district that included the pupil in its average daily membership for the year before the first year of operation of the joint district and that would have included the pupil in its student count for the purposes of computing its base support level for the fiscal year of the first year of operation of the joint district if the pupil had not enrolled in the joint district.

5.  A student includes any person enrolled in the joint district without regard to the person's age or high school graduation status, except that:

(a)  A student in a kindergarten program or in grades one through nine who enrolls in courses offered by the joint technical education district shall not be included in the joint district's student count or average daily membership.

(b)  A student in a kindergarten program or in grades one through nine who is enrolled in career and technical education courses shall not be funded in whole or in part with monies provided by a joint technical education district, except that a pupil in grade eight or nine may be funded with monies generated by the five cent qualifying tax rate authorized in subsection F of this section.

(c)  A student who is over twenty-two years of age shall not be included in the student count of the joint district for the purposes of chapter 9, articles 3, 4 and 5 of this title.

6.  A joint district may operate for more than one hundred seventy-five days per year, with expanded hours of service.

7.  A joint district may use the excess utility costs provisions of section 15-910 in the same manner as a school district for fiscal years 1999‑2000 and 2000‑2001, except that the base year shall be the first full fiscal year of operations.

8.  A joint district may use the carryforward provisions of section 15‑943.01 retroactively to July 1, 1993.

9.  A school district that is part of a joint district shall use any monies received pursuant to this article to supplement and not supplant base year career and technical education courses, and directly related equipment and facilities, except that a school district that is part of a joint technical education district and that has used monies received pursuant to this article to supplant career and technical education courses that were offered before the first year that the school district participated in the joint district or the first year that the school district used monies received pursuant to this article or that used the monies for purposes other than for career and technical education courses shall use one hundred per cent of the monies received pursuant to this article to supplement and not supplant base year career and technical education courses.

10.  A joint technical education district shall use any monies received pursuant to this article to enhance and not supplant career and technical education courses and directly related equipment and facilities.

11.  A joint technical education district or a school district that is part of a joint district shall only include pupils in grades ten through twelve in the calculation of student count or average daily membership if the pupils are enrolled in courses that are approved jointly by the governing board of the joint technical education district and each participating school district for satellite courses taught within the participating school district, or approved solely by the joint technical education district for centrally located courses.  Student count and average daily membership from courses that are not part of an approved program for career and technical education shall not be included in student count and average daily membership of a joint technical education district.

E.  The joint board shall appoint a superintendent as the executive officer of the joint district.

F.  Taxes may be levied for the support of the joint district as prescribed in chapter 9, article 6 of this title, except that a joint technical education district shall not levy a property tax pursuant to law that exceeds five cents per one hundred dollars assessed valuation except for bond monies pursuant to subsection D, paragraph 1 of this section.  Except for the taxes levied pursuant to section 15‑994, such taxes shall be obtained from a levy of taxes on the taxable property used for secondary tax purposes.

G.  The schools in the joint district are available to all persons who reside in the joint district and to pupils whose district of residence is paying tuition on behalf of the pupils to a district of attendance that is a member of the joint technical education district, subject to the rules for admission prescribed by the joint board.

H.  The joint board may collect tuition for adult students and the attendance of pupils who are residents of school districts that are not participating in the joint district pursuant to arrangements made between the governing board of the district and the joint board.

I.  The joint board may accept gifts, grants, federal monies, tuition and other allocations of monies to erect, repair and equip buildings and for the cost of operation of the schools of the joint district.

J.  One member of the joint board shall be selected chairman.  The chairman shall be selected annually on a rotation basis from among the participating school districts.  The chairman of the joint board shall be a voting member.

K.  A joint board and a community college district may enter into agreements for the provision of administrative, operational and educational services and facilities.

L.  Any agreement between the governing board of a joint technical education district and another joint technical education district, a school district, a charter school or a community college district shall be in the form of an intergovernmental agreement or other written contract.  The auditor general shall modify the uniform system of financial records and budget forms in accordance with this subsection.  The intergovernmental agreement or other written contract shall completely and accurately specify each of the following:

1.  The financial provisions of the intergovernmental agreement or other written contract and the format for the billing of all services.

2.  The accountability provisions of the intergovernmental agreement or other written contract.

3.  The responsibilities of each joint technical education district, each school district, each charter school and each community college district that is a party to the intergovernmental agreement or other written contract.

4.  The type of instruction that will be provided under the intergovernmental agreement or other written contract, including individualized education programs pursuant to section 15‑763.

5.  The quality of the instruction that will be provided under the intergovernmental agreement or other written contract.

6.  The transportation services that will be provided under the intergovernmental agreement or other written contract and the manner in which transportation costs will be paid.

7.  The amount that the joint technical education district will contribute to a course and the amount of support required by the school district or the community college.

8.  That the services provided by the joint technical education district, the school district, the charter school or the community college district be proportionally calculated in the cost of delivering the service.

9.  That the payment for services shall not exceed the cost of the services provided.

M.  On or before December 31 of each year, each joint technical education district shall submit a detailed report to the career and technical education division of the department of education.  The career and technical education division of the department of education shall collect, summarize and analyze the data submitted by the joint districts, shall submit an annual report that summarizes the data submitted by the joint districts to the governor, the speaker of the house of representatives, the president of the senate and the state board of education and shall submit a copy of this report to the secretary of state.  The data submitted by each joint technical education district shall include the following:

1.  The average daily membership of the joint district.

2.  The program listings and program descriptions of programs offered by the joint district, including the course sequences for each program.

3.  The costs associated with each program offered by the joint district.

4.  The completion rate for each program offered by the joint district. For the purposes of this paragraph, "completion rate" means the completion rate for students who are designated as concentrators in that program by the department of education under the career and technology approved plan.

5.  The graduation rate from the school district of residence of students who have completed a program in the joint district.

6.  A detailed description of the career opportunities available to students after completion of the program offered by the joint district.

7.  A detailed description of the career placement of students who have completed the program offered by the joint district.

8.  Any other data deemed necessary by the department of education to carry out its duties under this subsection.

N.  If the career and technical education division of the department of education determines that a course does not meet the criteria for approval as a joint technical education course, the governing board of the joint technical education district may appeal this decision to the state board of education acting as the state board of vocational education.

O.  Notwithstanding any other law, the average daily membership of a pupil in grade ten, eleven or twelve who is enrolled in a course that meets for at least one hundred fifty minutes per class period at a centralized campus owned and operated by a joint technical education district shall be 0.75.  The sum of the average daily membership, as provided in section 15‑901, subsection A, paragraph 1, of a pupil who is enrolled in both the member school district and joint technical education district courses provided at a community college pursuant to subsection K of this section or at a facility owned and operated by a joint technical education district that is not located on a site of a member district shall not exceed 1.75.  The member school district and the joint district shall determine the apportionment of the average daily membership and student enrollment for that pupil between the member school district and the joint district, except the amount apportioned shall not exceed 1.0 for either entity.

P.  Notwithstanding any other law, the average daily membership for a pupil who is enrolled in a joint technical education course defined in section 15‑391 and who does not meet the criteria specified in subsection O of this section shall be 0.25 for each course, except the sum of the average daily membership shall not exceed the limits prescribed by subsection D or O of this section, as applicable.

Q.  Notwithstanding any other law, beginning in fiscal year 2011-2012, the student count for a joint technical education district shall be equivalent to the joint technical education district's average daily membership.

R.  For the purposes of this section, "base year" means the complete school year in which voters of a school district elected to join a joint technical education district. END_STATUTE

Sec. 8.  Section 15-448, Arizona Revised Statutes, is amended to read:

START_STATUTE15-448.  Formation of unified school district; board membership; budget

A.  One or more common school districts and a high school district with coterminous or overlapping boundaries may establish a unified school district pursuant to this section.  Unification of a common school district and a high school district is not authorized by this section if any of the high school facilities owned by the new unified school district would not be located within its boundaries.

B.  Formation of a unified school district shall be by resolutions approved by the governing boards of the unifying school districts and certification of approval by such governing boards to the county school superintendent of the county or counties in which such individual school districts are located.  A common school district and high school district that unify pursuant to this section shall not exclude from the same unification a common school district that has overlapping boundaries with the high school district and that wishes to unify.  The formation of a unified school district shall become effective on July 1 of the next fiscal year following the certification of the county school superintendent.  An election shall not be required to form a unified school district pursuant to this section.  At least ninety days before the governing boards vote on the resolutions prescribed in this subsection, the governing boards shall mail a pamphlet to each household with one or more qualified electors that shall list the full cash value, the assessed valuation and the estimated amount of the primary property taxes and the estimated amount of the secondary property taxes under the proposed unification for each of the following:

1.  An owner occupied residence whose assessed valuation is the average assessed valuation of property classified as class three, as prescribed by section 42‑12003 for the current year in the school district.

2.  An owner occupied residence whose assessed valuation is one-half of the assessed valuation of the residence in paragraph 1 of this subsection.

3.  An owner occupied residence whose assessed valuation is twice the assessed valuation of the residence in paragraph 1 of this subsection.

4.  A business whose assessed valuation is the average of the assessed valuation of property classified as class one, as prescribed by section 42‑12001, paragraphs 12 and 13 for the current year in the school district.

C.  The boundaries of the unified school district shall be the boundaries of the former common school district or districts that unify.  The boundaries of the common school district or districts that are not unifying remain unchanged.  The county school superintendent, immediately upon receipt of the approved resolutions prescribed by subsection B of this section, shall file with the board of supervisors, the county assessor and the superintendent of public instruction a transcript of the boundaries of the unified school district.  The boundaries shown in the transcript shall become the legal boundaries of the school districts on July 1 of the next fiscal year.

D.  On formation of the unified school district, the governing board consists of the members of the former school district governing boards and the members shall hold office until January 1 following the first general election after formation of the district.

E.  Beginning on January 1 following the first general election after formation of the unified school district, the governing board shall have five members.  At the first general election after the formation of the district, members shall be elected in the following manner:

1.  The three candidates receiving the highest, the second highest and the third highest number of votes shall be elected to four year terms.

2.  The two candidates receiving the fourth and fifth highest number of votes shall be elected to two year terms.  Thereafter all offices shall have four year terms.

F.  The new unified school district may appoint a resident of the remaining common school district to serve as a nonvoting member of the governing board to represent the interests of the high school pupils who reside in the remaining common school district and who attend school in the unified school district.

G.  For the first year of operation, the unified school district governing board shall prepare a consolidated budget based on the student counts from the school districts comprising the unified school district, except that for purposes of determining budget amounts and equalization assistance, the student count for the former high school district shall not include the prior year average daily membership attributable to high school pupils from a common school district that was part of the former high school district but is not part of the unified school district.  The unified school district shall charge the remaining common school district tuition for these pupils as provided in subsection J of this section.  The unified school district may budget for unification assistance pursuant to section 15‑912.01.

H.  The governing board of the unified school district shall prepare policies, curricula and budgets for the district.  These policies shall require that:

1.  The base compensation of each certificated teacher for the first year of operation of the new unified school district shall not be lower than the certificated teacher's base compensation for the prior year in the previously existing school districts.

2.  The certificated teacher's years of employment in the previously existing school districts shall be included in determining the teacher's certificated years of employment in the new unified school district.

I.  Upon formation of a unified school district any existing override authorization of the former high school district and the former common school district or districts shall continue until expiration based on the revenue control limit of the school district or districts that had override authorization prior to unification.  The unified school district may request new override authorization for the budget year as provided in section 15‑481 based on the combined revenue control limit of the new district after unification.  If the unified school district's request for override authorization is approved, it will replace any existing override for the budget year.

J.  The unified school district shall admit high school pupils who reside in a common school district that was located within the boundaries of the former high school district.  Tuition shall be paid to the unified school district by the common school district in which such pupils reside.  Such tuition amount shall be calculated in accordance with section 15‑824, subject to the following modifications:

1.  If the former high school district had outstanding bonded indebtedness at the time of unification, the combined tuition for the group of high school pupils who reside in each common school district shall include a debt service amount for the former high school district's outstanding bonded indebtedness that is determined as follows:

(a)  Divide the total secondary assessed valuation of the common school district in which the group of pupils resides by the total secondary assessed valuation of the former high school district.  For the purposes of this subdivision, "secondary assessed valuation" means secondary assessed valuation for the tax year prior to the year when the unification occurs and includes the values used to determine voluntary contributions collected pursuant to title 9, chapter 4, article 3 and title 48, chapter 1, article 8.

(b)  Multiply the quotient obtained in subdivision (a) by the unified school district's annual debt service expenditure.

2.  The debt service portion of such tuition payments calculated pursuant to paragraph 1 of this subsection shall be used exclusively for debt service of the outstanding bonded indebtedness of the former high school district.  When such indebtedness is fully extinguished, the debt service portion of a pupil's tuition shall be determined in accordance with paragraph 3 of this subsection.

3.  If the former high school district had no outstanding bonded indebtedness at the time of unification, the tuition calculation shall include the actual school district expenditures for the portion of any debt service of the unified school district that pertains to any construction or renovation of high school facilities divided by the school district's student count for the high school portion of the school district.

4.  The unified school district shall not include in the tuition calculation any debt service that pertains to any construction or renovation of school facilities for preschool through grade eight.

5.  Notwithstanding section 15‑951, subsection G  F, the revenue control limit of the common school district shall include the full amount of the debt service portion of the tuition calculated pursuant to this subsection.

K.  All assets and liabilities of the unifying school districts shall be transferred and assumed by the new unified school district.  Any existing bonded indebtedness of a common school district or a high school district unifying pursuant to this section shall be assumed by the new unified school district and shall be regarded as an indebtedness of the new unified school district for the purpose of determining the debt incurring authority of the district.  Taxes for the payment of such bonded indebtedness shall be levied on all taxable property in the new unified school district, but nothing in this subsection shall be construed to relieve from liability to taxation for the payment of all taxable property of the former high school district if necessary to prevent a default in the payment of any bonded indebtedness of the former high school district.  The residents of a common school district that does not unify shall not vote in bond or override elections of the unified school district and shall not be assessed taxes as a result of a bond or override election of the unified school district.

L.  If the remaining common school district had authorization for an override as provided in section 15‑481 or 15‑482, the override authorization continues for the remaining common school district or districts in the same manner as before the formation of the unified school district.

M.  The bonding authorization and bonding limitations continue for the remaining common school district or districts in the same manner as before the formation of the unified school district.

N.  Nothing in this section shall be construed to relieve a school district formed pursuant to section 15‑457 or 15‑458 of its liability for any outstanding bonded indebtedness.

O.  For school districts that become unified after July 1, 2004 and where all of the common schools were eligible for the small school district weight pursuant to section 15‑943, paragraph 1, subdivision (a) when computing their base support level and base revenue control limit before unification, the unified school district may continue to use the small school district weight as follows:

1.  Annually determine the common school student count and the weighted student count pursuant to section 15‑943, paragraph 1, subdivision (a) for each common school district before unification.

2.  Calculate the sum of the common school districts' student counts and weighted student counts determined in paragraph 1 of this subsection.

3.  Divide the sum of the weighted student counts by the sum of the student counts determined in paragraph 2 of this subsection.

4.  The amount determined in paragraph 3 of this subsection shall be the weight for the common schools in the unified school district.

P.  A unified school district may calculate its revenue control limit and district support level by using subsection O of this section as follows:

1.  Determine the number of individual school districts that existed before unification into a single school district.

2.  Multiply the amount determined in paragraph 1 of this subsection by six hundred.

3.  Multiply the amount determined in paragraph 2 of this subsection by 0.80.

4.  If the amount determined in paragraph 3 of this subsection exceeds the student count of the unified school district, the unified school district is eligible to use subsection O of this section.

Q.  Subsections O and P of this section shall remain in effect until the aggregate student count of the common school districts before unification exceeds the aggregate number of students of the common school districts before unification authorized to utilize section 15‑943, paragraph 1, subdivision (a). END_STATUTE

Sec. 9.  Section 15-481, Arizona Revised Statutes, is amended to read:

START_STATUTE15-481.  Override election; budget increases; notice; ballot; effect

A.  If a proposed budget of a school district exceeds the aggregate budget limit for the budget year, at least ninety days before the proposed election the governing board shall order an override election to be held on the first Tuesday following the first Monday in November as prescribed by section 16‑204, subsection B, paragraph 1, subdivision (d) for the purpose of presenting the proposed budget to the qualified electors of the school district who by a majority of those voting either shall affirm or reject the budget.  At the same time as the order of the election, the governing board shall publicly declare the deadline for submitting arguments, as set by the county school superintendent pursuant to subsection B, paragraph 9 of this section, to be submitted in the informational report and shall immediately post the deadline in a prominent location on the district's website.  In addition, the governing board shall prepare an alternate budget which does not include an increase in the budget of more than the amount permitted as provided in section 15‑905.  If the qualified electors approve the proposed budget, the governing board of the school district shall follow the procedures prescribed in section 15‑905 for adopting a budget that includes the authorized increase.  If the qualified electors disapprove the proposed budget, the governing board shall follow the procedures prescribed in section 15‑905 for adopting a budget that does not include the proposed increase or the portion of the proposed increase that exceeds the amount authorized by a previously approved budget increase as prescribed in subsection P of this section.

B.  The county school superintendent shall prepare an informational report on the proposed increase in the budget and a sample ballot and, at least forty days prior to the election, shall transmit the report and the sample ballot to the governing board of the school district.  The governing board, upon receipt of the report and the ballot, shall mail or distribute the report and the ballot to the households in which qualified electors reside within the school district at least thirty‑five days prior to the election.  Any distribution of material concerning the proposed increase in the budget shall not be conducted by children enrolled in the school district.  The report shall contain the following information:

1.  The date of the election.

2.  The voter's polling place and the times it is open.

3.  The proposed total increase in the budget which exceeds the amount permitted pursuant to section 15‑905.

4.  The total amount of the current year's budget, the total amount of the proposed budget and the total amount of the alternate budget.

5.  If the override is for a period of more than one year, a statement indicating the number of years the proposed increase in the budget would be in effect and the percentage of the school district's revenue control limit that the district is requesting for the future years.

6.  The proposed total amount of revenues which will fund the increase in the budget and the amount which will be obtained from a levy of taxes upon the taxable property within the school district for the first year for which the budget increase was adopted.

7.  The proposed amount of revenues which will fund the increase in the budget and which will be obtained from other than a levy of taxes upon the taxable property within the school district for the first year for which the budget increase was adopted.

8.  The dollar amount and the purpose for which the proposed increase in the budget is to be expended for the first year for which the budget increase was adopted.

9.  At least two arguments, if submitted, but no more than ten arguments for and two arguments, if submitted, but no more than ten arguments against the proposed increase in the budget.  The arguments shall be in a form prescribed by the county school superintendent, and each argument shall not exceed two hundred words.  Arguments for the proposed increase in the budget shall be provided in writing and signed by the governing board.  If submitted, additional arguments in favor of the proposed increase in the budget shall be provided in writing and signed by those in favor.  Arguments against the proposed increase in the budget shall be provided in writing and signed by those in opposition.  The names of persons and entities submitting written arguments shall be included in the report.  The county school superintendent shall review all factual statements contained in the written arguments and correct any inaccurate statements of fact.  The superintendent shall not review and correct any portion of the written arguments which are identified as statements of the author's opinion.  The county school superintendent shall make the written arguments available to the public as provided in title 39, chapter 1, article 2.  A deadline for submitting arguments to be included in the informational report shall be set by the county school superintendent.

10.  A statement that the alternate budget shall be adopted by the governing board if the proposed budget is not adopted by the qualified electors of the school district.

11.  The current full cash value and the assessed valuation provided by the department of revenue, the first year tax rate for the proposed override and the estimated amount of the secondary property taxes if the proposed budget is adopted for each of the following:

(a)  An owner‑occupied residence whose assessed valuation is the average assessed valuation of property classified as class three, as prescribed by section 42‑12003 for the current year in the school district.

(b)  An owner‑occupied residence whose assessed valuation is one‑half of the assessed valuation of the residence in subdivision (a) of this paragraph.

(c)  An owner‑occupied residence whose assessed valuation is twice the assessed valuation of the residence in subdivision (a) of this paragraph.

(d)  A business whose assessed valuation is the average of the assessed valuation of property classified as class one, as prescribed by section 42‑12001, paragraphs 12 and 13 for the current year in the school district.

12.  If the election is conducted pursuant to subsection L or M of this section, the following information:

(a)  An executive summary of the school district's most recent capital improvement plan submitted to the school facilities board.

(b)  A complete list of each proposed capital improvement that will be funded with the budget increase and a description of the proposed cost of each improvement, including a separate aggregation of capital improvements for administrative purposes as defined by the school facilities board.

(c)  The tax rate associated with each of the proposed capital improvements and the estimated cost of each capital improvement for the owner of a single family home that is valued at eighty thousand dollars.

C.  For the purpose of this section, the school district may use its staff, equipment, materials, buildings or other resources only to distribute the informational report at the school district office or at public hearings and to produce such information as required in subsection B of this section, provided that nothing in this subsection shall preclude school districts from holding or participating in any public hearings at which testimony is given by at least one person for the proposed increase and one person against the proposed increase.  Any written information provided by the district pertaining to the override election shall include financial information showing the estimated first year tax rate for the proposed budget override amount.

D.  If any amount of the proposed increase will be funded by a levy of taxes in the district, the election prescribed in subsection A of this section shall be held on the first Tuesday following the first Monday in November as prescribed by section 16‑204, subsection B, paragraph 1, subdivision (d).  If the proposed increase will be fully funded by revenues from other than a levy of taxes, the elections prescribed in subsection A of this section shall be held on any date prescribed by section 16‑204.  The elections shall be conducted as nearly as practicable in the manner prescribed in article 1 of this chapter, sections 15‑422 through 15‑424 and section 15‑426, relating to special elections, except that:

1.  The notices required pursuant to section 15‑403 shall be posted not less than twenty‑five days before the election.

2.  Ballots shall be counted pursuant to title 16, chapter 4, article 10.

E.  If the election is to exceed the revenue control limit and if the proposed increase will be fully funded by a levy of taxes upon the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify his desired choice.  The ballot shall also contain the amount of the proposed increase of the proposed budget over the alternate budget, a statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, if applicable, as provided in subsection P of this section and the following statement:

Any budget increase authorized by this election shall be entirely funded by a levy of taxes upon the taxable property within this school district for the year for which adopted and for ____ subsequent years, shall not be realized from monies furnished by the state and shall not be subject to the limitation on taxes specified in article IX, section 18, Constitution of Arizona.  Based on the current assessed valuation used for secondary property tax purposes, to fund the proposed increase in the school district's budget would require an estimated tax rate of _______________ dollar per one hundred dollars of assessed valuation used for secondary property tax purposes and is in addition to the school district's tax rate which will be levied to fund the school district's revenue control limit allowed by law.

F.  If the election is to exceed the revenue control limit and if the proposed increase will be fully funded by revenues from other than a levy of taxes upon the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice.  The ballot shall also contain:

1.  The amount of the proposed increase of the proposed budget over the alternate budget.

2.  A statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, if applicable, as provided in subsection P of this section.

3.  The following statement:

Any budget increase authorized by this election shall be entirely funded by this school district with revenues from other than a levy of taxes on the taxable property within the school district for the year for which adopted and for ______ subsequent years and shall not be realized from monies furnished by the state.

G.  Except as provided in subsection H of this section, the maximum budget increase which may be requested and authorized as provided in subsection E or F of this section or the combination of subsections E and F of this section is fifteen per cent of the revenue control limit as provided in section 15‑947, subsection A for the budget year.  If a school district requests an override pursuant to section 15‑482 or to continue with a budget override pursuant to section 15‑482 for pupils in kindergarten programs and grades one through three that was authorized before December 31, 2008, the maximum budget increase that may be requested and authorized as provided in subsection E or F of this section or the combination of subsections E and F of this section is ten per cent of the revenue control limit as provided in section 15‑947, subsection A for the budget year.

H.  Special budget override provisions for school districts with a student count of less than one hundred fifty‑four in kindergarten programs and grades one through eight or with a student count of less than one hundred seventy‑six in grades nine through twelve are as follows:

1.  The maximum budget increase that may be requested and authorized as provided in subsections E and F of this section is the greater of the amount prescribed in subsection G of this section or a limit computed as follows:

(a)  For common or unified districts with a student count of less than one hundred fifty‑four in kindergarten programs and grades one through eight, the limit computed as prescribed in item (i) or (ii) of this subdivision, whichever is appropriate:

(i)

           Small School   Support Level Weight                    Phase Down

Student    Student        for Small Isolated                      Reduction

Count      Count Limit    School Districts          Base Level    Factor    

         -     125     x  1.358 + (0.0005 x      x  $           = $     _  

                          (500 - Student Count))

                                                    Small Isolated

           Phase Down     Phase Down                School District

              Base        Reduction Factor          Elementary Limit

           $150,000    -  $                      =  $               

(ii)

           Small School   Support Level Weight                    Phase Down

Student    Student        for Small                               Reduction

Count      Count Limit    School Districts          Base Level_   Factor    

         - 125         x  1.278 + (0.0003 x      x  $         _ = $       _

                          (500 - Student Count))

                                                    Small

           Phase Down     Phase Down                School District

              Base        Reduction Factor          Elementary Limit

           $150,000    -  $                      =  $               

(b)  For unified or union high school districts with a student count of less than one hundred seventy-six in grades nine through twelve, the limit computed as prescribed in item (i) or (ii) of this subdivision, whichever is appropriate:

(i)

           Small School   Support Level Weight                    Phase Down

Student    Student        for Small Isolated                      Reduction

Count      Count Limit    School Districts          Base Level    Factor    

         -     100     x  1.468 + (0.0005 x      x  $           = $       _

                          (500 - Student Count))

                                                    Small Isolated

           Phase Down     Phase Down                District

              Base        Reduction Factor          Secondary Limit

           $350,000    -  $                      =  $              

(ii)

           Small School   Support Level Weight                    Phase Down

Student    Student        for Small                               Reduction

Count      Count Limit    School Districts          Base Level_   Factor    

         -     100     x  1.398 + (0.0004 x      x  $           = $         

                          (500 - Student Count))

                                                    Small

           Phase Down     Phase Down                School District

              Base        Reduction Factor          Secondary Limit

           $350,000    -  $                      =  $              

(c)  If both subdivisions (a) and (b) of this paragraph apply to a unified school district, its limit for the purposes of this paragraph is the combination of its elementary limit and its secondary limit.

(d)  If only subdivision (a) or (b) of this paragraph applies to a unified school district, the district's limit for the purposes of this paragraph is the sum of the limit computed as provided in subdivision (a) or (b) of this paragraph plus ten per cent of the revenue control limit attributable to those grade levels that do not meet the eligibility requirements of this subsection.  If a school district budgets monies outside the revenue control limit pursuant to section 15‑949, subsection E, the district's limit for the purposes of this paragraph is only the ten per cent of the revenue control limit attributable to those grade levels that are not included under section 15‑949, subsection E.  For the purposes of this subdivision, the revenue control limit is separated into elementary and secondary components based on the weighted student count as provided in section 15‑971, subsection B, paragraph 2, subdivision (a).

2.  If a school district utilizes this subsection to request an override of more than one year, the ballot shall include an estimate of the amount of the proposed increase in the future years in place of the statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, as prescribed in subsections E and F of this section.

3.  Notwithstanding subsection P of this section, the maximum period of an override authorized pursuant to this subsection is five years.

4.  Subsection P, paragraphs 1 and 2 of this section do not apply to overrides authorized pursuant to this subsection.

I.  If the election is to exceed the revenue control limit as provided in section 15‑482 and if the proposed increase will be fully funded by a levy of taxes on the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice.  The ballot shall also contain the amount of the proposed increase of the budget over the alternate budget, a statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, if applicable, as provided in subsection Q of this section, and the following statement:

Any budget increase authorized by this election shall be entirely funded by a levy of taxes on the taxable property within this school district for the year for which adopted and for _____ subsequent years, shall not be realized from monies furnished by the state and shall not be subject to the limitation on taxes specified in article IX, section 18, Constitution of Arizona.  Based on the current assessed valuation used for secondary property tax purposes, to fund the proposed increase in the school district's budget which will be funded by a levy of taxes upon the taxable property within this school district would require an estimated tax rate of __________ dollar per one hundred dollars of assessed valuation used for secondary property tax purposes and is in addition to the school district's tax rate that will be levied to fund the school district's revenue control limit allowed by law.

J.  If the election is to exceed the revenue control limit as provided in section 15‑482 and if the proposed increase will be fully funded by revenues other than a levy of taxes on the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice.  The ballot shall also contain the amount of the proposed increase of the proposed budget over the alternate budget, a statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, if applicable, as provided in subsection Q of this section and the following statement:

Any budget increase authorized by this election shall be entirely funded by this school district with revenues from other than a levy of taxes on the taxable property within the school district for the year for which adopted and for _____ subsequent years and shall not be realized from monies furnished by the state.

K.  The maximum budget increase that may be requested and authorized as provided in subsection I or J of this section, or a combination of both of these subsections, is five per cent of the revenue control limit as provided in section 15‑947, subsection A for the budget year.  For a common school district not within a high school district or a common school district within a high school district that offers instruction in high school subjects as provided in section 15‑447, five per cent of the revenue control limit means five per cent of the revenue control limit attributable to the weighted student count in preschool programs for children with disabilities, kindergarten programs and grades one through eight as provided in section 15‑971, subsection B.  For a unified school district, five per cent of the revenue control limit means five per cent of the revenue control limit attributable to the weighted student count in preschool programs for children with disabilities, kindergarten programs and grades one through twelve.  For a union high school district, five per cent of the revenue control limit means five per cent of the revenue control limit attributable to the weighted student count in grades nine through twelve.

L.  If the election is to exceed the capital outlay revenue limit district additional assistance and if the proposed increase will be fully funded by a levy of taxes upon the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice.  An election held pursuant to this subsection shall be held on the first Tuesday after the first Monday of November.  The ballot shall also contain the amount of the proposed increase of the proposed budget over the alternate budget and the following statement:

Any budget increase authorized by this election shall be entirely funded by a levy of taxes upon the taxable property within this school district for the year in which adopted and for _____ subsequent years, shall not be realized from monies furnished by the state and shall not be subject to the limitation on taxes specified in article IX, section 18, Constitution of Arizona.  Based on the current assessed valuation used for secondary property tax purposes, to fund the proposed increase in the school district's budget would require an estimated tax rate of _______________ dollar per one hundred dollars of assessed valuation used for secondary property tax purposes and is in addition to the school district's tax rate which will be levied to fund the school district's capital outlay revenue limit district additional assistance allowed by law.

M.  If the election is to exceed the capital outlay revenue limit district additional assistance and if the proposed increase will be fully funded by revenues from other than a levy of taxes upon the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice.  An election held pursuant to this subsection shall be held on the first Tuesday after the first Monday of November.  The ballot shall also contain the amount of the proposed increase of the proposed budget over the alternate budget and the following statement:

Any budget increase authorized by this election shall be entirely funded by this school district with revenues from other than a levy of taxes on the taxable property within the school district for the year in which adopted and for ______ subsequent years and shall not be realized from monies furnished by the state.

N.  If the election is to exceed a combination of the revenue control limit as provided in subsection E or F of this section, the revenue control limit as provided in subsection I or J of this section or the capital outlay revenue limit district additional assistance as provided in subsection L or M of this section, the ballot shall be prepared so that the voters may vote on each proposed increase separately and shall contain statements required in the same manner as if each proposed increase were submitted separately.

O.  If the election provides for a levy of taxes on the taxable property within the school district, at least thirty days prior to the election, the department of revenue shall provide the school district governing board and the county school superintendent with the current secondary assessed valuation of the school district.  The governing board and the county school superintendent shall use the current secondary assessed valuation of the school district to translate the amount of the proposed dollar increase in the budget of the school district over that allowed by law into a tax rate figure.

P.  If the voters in a school district vote to adopt a budget in excess of the revenue control limit as provided in subsection E or F of this section, any additional increase shall be included in the aggregate budget limit for each of the years authorized.  Any additional increase shall be excluded from the determination of equalization assistance.  The school district governing board, however, may levy on the assessed valuation used for secondary property tax purposes of the property in the school district the additional increase if adopted under subsection E of this section for the period of one year, two years or five through seven years as authorized.  If an additional increase is approved as provided in subsection F of this section, the school district governing board may only use revenues derived from the school district's prior year's maintenance and operation fund ending cash balance to fund the additional increase.  If a budget increase was previously authorized and will be in effect for the budget year or budget year and subsequent years, as provided in subsection E or F of this section, the governing board may request a new budget increase as provided in the same subsection under which the prior budget increase was adopted, which shall not exceed the maximum amount permitted under subsection G of this section.  If the voters in the school district authorize the new budget increase amount, the existing budget increase no longer is in effect.  If the voters in the school district do not authorize the budget increase amount, the existing budget increase remains in effect for the time period for which it was authorized.  The maximum additional increase authorized as provided in subsection E or F of this section and the additional increase which is included in the aggregate budget limit is based on a percentage of a school district's revenue control limit in future years, if the budget increase is authorized for more than one year.  If the additional increase:

1.  Is for two years, the proposed increase in the second year is equal to the initial proposed percentage increase.

2.  Is for five years or more, the proposed increase is equal to the initial proposed percentage increase in the following years of the proposed increase, except that in the next to last year it is two‑thirds of the initial proposed percentage increase and it is one‑third of the initial proposed percentage increase in the last year of the proposed increase.

Q.  If the voters in a school district vote to adopt a budget in excess of the revenue control limit as provided in subsection I or J of this section, any additional increase shall be included in the aggregate budget limit for each of the years authorized.  Any additional increase shall be excluded from the determination of equalization assistance.  The school district governing board, however, may levy on the assessed valuation used for secondary property tax purposes of the property in the school district the additional increase if adopted under subsection I of this section for the period of one year, two years or five through seven years as authorized.  If an additional increase is approved as provided in subsection J of this section, the increase may only be budgeted and expended if sufficient monies are available in the maintenance and operation fund of the school district. If a budget increase was previously authorized and will be in effect for the budget year or budget year and subsequent years, as provided in subsection I or J of this section, the governing board may request a new budget increase as provided in the same subsection under which the prior budget increase was adopted that does not exceed the maximum amount permitted under subsection K of this section.  If the voters in the school district authorize the new budget increase amount, the existing budget increase no longer is in effect. If the voters in the school district do not authorize the budget increase amount, the existing budget increase remains in effect for the time period for which it was authorized.  The maximum additional increase authorized as provided in subsection I or J of this section and the additional increase that is included in the aggregate budget limit is based on a percentage of a school district's revenue control limit in future years, if the budget increase is authorized for more than one year.  If the additional increase:

1.  Is for two years, the proposed increase in the second year is equal to the initial proposed percentage increase.

2.  Is for five years or more, the proposed increase is equal to the initial proposed percentage increase in the following years of the proposed increase, except that in the next to last year it is two‑thirds of the initial proposed percentage increase and it is one‑third of the initial proposed percentage increase in the last year of the proposed increase.

R.  If the voters in a school district vote to adopt a budget in excess of the capital outlay revenue limit district additional assistance as provided in subsection L of this section, any additional increase shall be included in the aggregate budget limit for each of the years authorized.  The additional increase shall be excluded from the determination of equalization assistance.  The school district governing board, however, may levy on the assessed valuation used for secondary property tax purposes of the property in the school district the additional increase for the period authorized but not to exceed ten years.  For overrides approved by a vote of the qualified electors of the school district at an election held from and after October 31, 1998, the period of the additional increase prescribed in this subsection shall not exceed seven years for any capital override election.

S.  If the voters in a school district vote to adopt a budget in excess of the capital outlay revenue limit district additional assistance as provided in subsection M of this section, any additional increase shall be included in the aggregate budget limit for each of the years authorized.  The additional increase shall be excluded from the determination of equalization assistance.  The school district governing board may only use revenues derived from the school district's prior year's maintenance and operation fund ending cash balance and capital outlay fund ending cash balance to fund the additional increase for the period authorized but not to exceed ten years.  For overrides approved by a vote of the qualified electors of the school district at an election held from and after October 31, 1998, the period of the additional increase prescribed in this subsection shall not exceed seven years for any capital override election.

T.  In addition to subsections P and S of this section, from the maintenance and operation fund and capital outlay fund ending cash balances, the school district governing board shall first use any available revenues to reduce its primary tax rate to zero and shall use any remaining revenues to fund the additional increase authorized as provided in subsections F and M of this section.

U.  If the voters in a school district disapprove the proposed budget, the alternate budget which, except for any budget increase authorized by a prior election, does not include an increase in the budget in excess of the amount provided in section 15‑905 shall be adopted by the governing board as provided in section 15‑905.

V.  The governing board may request that any override election be cancelled if any change in chapter 9 of this title changes the amount of the aggregate budget limit as provided in section 15‑905.  The request to cancel the override election shall be made to the county school superintendent at least eighty days prior to the date of the scheduled override election.

W.  For any election conducted pursuant to subsection L or M of this section:

1.  The ballot shall include the following statement in addition to any other statement required by this section:

The capital improvements that are proposed to be funded through this override election are to exceed the state standards and are in addition to monies provided by the state.

___________ school district is proposing to increase its budget by $__________ to fund capital improvements over and above those funded by the state.  Under the students first capital funding system, _________ school district is entitled to state monies for building renewal, new construction and renovation of school buildings in accordance with state law.

2.  The ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice.

3.  At least eighty‑five days before the election, the school district shall submit proposed ballot language to the director of the Arizona legislative council.  The director of the Arizona legislative council shall review the proposed ballot language to determine whether the proposed ballot language complies with this section.  If the director of the Arizona legislative council determines that the proposed ballot language does not comply with this section, the director, within ten calendar days of the receipt of the proposed ballot language, shall notify the school district of the director's objections and the school district shall resubmit revised ballot language to the director for approval.

X.  If the voters approve the budget increase pursuant to subsection L or M of this section, the school district shall not use the override proceeds for any purposes other than the proposed capital improvements listed in the publicity pamphlet, except that up to ten per cent of the override proceeds may be used for general capital expenses, including cost overruns of proposed capital improvements.

Y.  Each school district that currently increases its budget pursuant to this section is required to hold a public meeting each year between September 1 and October 31 at which an update of the programs or capital improvements financed through the override is discussed and at which the public is permitted an opportunity to comment and:

1.  If the increase is pursuant to subsection L or M of this section, at a minimum, the update shall include the progress of capital improvements financed through the override, a comparison of the current status and the original projections on the construction of capital improvements, the costs of capital improvements and the costs of capital improvements in progress or completed since the prior meeting and the future capital plans of the school district.  The school district shall include in the public meeting a discussion of the school district's use of state capital aid and voter‑approved bonding in funding capital improvements, if any.

2.  If the increase is pursuant to subsection E, F, I or J of this section, the update shall include at a minimum the amount expended in the previous fiscal year and the amount included in the current budget for each of the purposes listed in the informational report prescribed by subsection B of this section.

Z.  If a budget in excess of the capital outlay revenue limit district additional assistance was previously adopted by the voters in a school district and will be in effect for the budget year or budget year and subsequent years, as provided in subsection L or M of this section, the governing board may request an additional budget in excess of the capital outlay revenue limit district additional assistance.  If the voters in a school district authorize the additional budget in excess of the capital outlay revenue limit district additional assistance, the existing capital outlay revenue limit district additional assistance budget increase remains in effect.

AA.  Notwithstanding any other law, the maximum budget increase that may be authorized pursuant to subsection L or M of this section is ten per cent of the school district's revenue control limit.

BB.  If the election is to continue to exceed the revenue control limit and if the proposed override will be fully funded by a continuation of a levy of taxes on the taxable property in the school district, the ballot shall contain the words "budget override continuation, yes" and "budget override continuation, no", and the voter shall signify the voter's desired choice.  The ballot shall also contain the amount of the proposed continuation of the budget increase of the proposed budget over the alternate budget, a statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, if applicable, as provided in subsection P of this section and the following statement:

Any budget increase continuation authorized by this election shall be entirely funded by a levy of taxes on the taxable property in this school district for the year for which adopted and for ____ subsequent years, shall not be realized from monies furnished by the state and shall not be subject to the limitation on taxes specified in article IX, section 18, Constitution of Arizona.  Based on the current assessed valuation used for secondary property tax purposes, to fund the proposed continuation of the increase in the school district's budget would require an estimated continuation of a tax rate of _______________ dollar per one hundred dollars of assessed valuation used for secondary property tax purposes and is in addition to the school district's tax rate that will be levied to fund the school district's revenue control limit allowed by law.

CC.  If the election is to continue to exceed the revenue control limit as provided in section 15-482 and if the proposed override will be fully funded by a continuation of a levy of taxes on the taxable property in the school district, the ballot shall contain the words "budget override continuation, yes" and "budget override continuation, no", and the voter shall signify the voter's desired choice.  The ballot shall also contain the amount of the proposed continuation of the budget increase of the proposed budget over the alternate budget, a statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, if applicable, as provided in subsection P of this section and the following statement:

Any budget increase continuation authorized by this election shall be entirely funded by a levy of taxes on the taxable property in this school district for the year for which adopted and for ____ subsequent years, shall not be realized from monies furnished by the state and shall not be subject to the limitation on taxes specified in article IX, section 18, Constitution of Arizona.  Based on the current assessed valuation used for secondary property tax purposes, to fund the proposed continuation of the increase in the school district's budget would require an estimated continuation of a tax rate of _______________ dollar per one hundred dollars of assessed valuation used for secondary property tax purposes and is in addition to the school district's tax rate that will be levied to fund the school district's revenue control limit allowed by law. END_STATUTE

Sec. 10.  Section 15-491, Arizona Revised Statutes, is amended to read:

START_STATUTE15-491.  Elections on school property; exceptions

A.  The governing board of a school district may, and on petition of fifteen per cent of the school electors as shown by the poll list at the last preceding annual school election shall, call an election for the following purposes:

1.  To locate or change the location of school buildings.

2.  To purchase or sell school sites or buildings or sell school sites pursuant to section 15‑342 or to build school buildings, but the authorization by vote of the school district shall not necessarily specify the site to be purchased.

3.  To decide whether the bonds of the school district shall be issued and sold for the purpose of raising money for purchasing or leasing school lots, for building or renovating school buildings, for supplying school buildings with furniture, equipment and technology, for improving school grounds, for purchasing pupil transportation vehicles or for liquidating any indebtedness already incurred for such purposes.  Bonds issued for furniture, equipment and technology, other than fixtures, shall mature no later than the July 1 that follows the fifth year after the bonds were issued.  A school district shall not issue class B bonds until the school district has obligated in contract the entire proceeds of any class A bonds issued by the school district.  The total amount of class A and class B bonds issued by a school district shall not exceed the debt limitations prescribed in article IX, sections 8 and 8.1, Constitution of Arizona.

4.  To lease for five or more years, as lessor or as lessee, school buildings or grounds.  Approval by a majority of the school district electors voting authorizes the governing board to negotiate for and enter into a lease.  The ballot shall list the school buildings or grounds for which a lease is sought.  If the governing board does not enter into a lease of five or more years of the school buildings or grounds listed on the ballot within five years of the date of the election and the board continues to seek such a lease, the governing board shall call a special election to reauthorize the board to negotiate for and to enter into a lease of five or more years.

5.  To change the list of capital projects or the purposes authorized by prior voter approval to issue bonds.

6.  To extend from six to ten years the time period to issue class B bonds authorized in 2009 or earlier.  Elections pursuant to this paragraph may not be held later than the sixth November after the election approving the issuance of the bonds.

B.  No petition shall be required for the holding of the first election to be held in a joint common school district for any of the purposes specified in subsection A of this section.  The notice of election required by section 15‑492 shall be published in each of the counties that comprise the joint common school district.  The certification of election results required by section 15‑493 shall be made to the board of supervisors of the jurisdictional county.

C.  When the election is called to determine whether or not bonds of the school district shall be issued and sold for the purposes enumerated in the call for the election, the question shall be submitted to the vote of the qualified electors of the school district as defined in section 15‑401 and subject to section 15‑402.

D.  The governing board shall order the election to be held in the manner prescribed in title 35, chapter 3, article 3.  If a petition for an election has been filed with the governing board as provided in subsection A of this section, the board shall act on the petition within sixty days by ordering the election to be held as provided in this subsection.  If a school district bond election is scheduled for the same date a school district will hold an override election, the governing body shall deliver a copy of the notice of election and ballot to the county school superintendent who shall include the notice of election and ballot with the information report and ballot prepared for the override election.  Mailing of the information required for both the override and bond elections shall constitute compliance with the notice provisions of this section.

E.  The elections to be held pursuant to this section shall only be held on dates prescribed by section 16‑204, except that elections held pursuant to this section to decide whether class B bonds shall be issued, or any other obligation incurred that will require the assessment of secondary property taxes, shall only be held on the first Tuesday after the first Monday of November.

F.  Subsection A, paragraph 2 of this section does not apply to the sale of school property if the market value of the school property is less than fifty thousand dollars.

G.  Bond counsel fees, financial advisory fees, printing costs and paying agent and registrar fees for bonds issued pursuant to an election under this section shall be paid from either the amount authorized by the qualified electors of the school district or current operating funds.  Bond election expenses shall be paid from current operating funds only.

H.  For any election conducted to decide whether class B bonds will be issued pursuant to this section:

1.  Except as provided in paragraph 2 of this subsection, the ballot shall include the following statement:

The capital improvements that are proposed to be funded through this bond issuance are to exceed the state standards and are in addition to monies provided by the state.

___________ school district is proposing to issue class B general obligation bonds totaling $__________ to fund capital improvements over and above those funded by the state.  Under the students first capital funding system, _________ school district is entitled to state monies for building renewal, new construction and renovation of school buildings in accordance with state law.

2.  For a school district that is a joint technical education district, the ballot shall include the following statement:

___________, a joint technical education district, is proposing to issue class B general obligation bonds totaling $___________ to fund capital improvements at a campus owned or operated and maintained by the joint technical education district.

3.  The ballot shall contain the words "bond approval, yes" and "bond approval, no", and the voter shall signify the voter's desired choice.

4.  The ballot shall also contain the phrase "the issuance of these bonds will result in an annual levy of property taxes sufficient to pay the debt on the bonds".

5.  At least eighty‑five days before the election, the school district shall submit proposed ballot language to the director of the Arizona legislative council.  The director of the Arizona legislative council shall review the proposed ballot language to determine whether the proposed ballot language complies with this section.  If the director of the Arizona legislative council determines that the proposed ballot language does not comply with this section, the director, within ten calendar days of the receipt of the proposed ballot language, shall notify the school district of the director's objections and the school district shall resubmit revised ballot language to the director for approval.

6.  No later than thirty-five days before a class B bond election conducted pursuant to this section, the school district shall mail a publicity pamphlet to each household that contains a qualified elector in the school district.  The publicity pamphlet shall contain, at a minimum, the following information:

(a)  An executive summary of the school district's most recent capital plan submitted to the school facilities board.

(b)  A complete list of each proposed capital improvement that will be funded with the proceeds of the bonds and a description of the proposed cost of each improvement, including a separate aggregation of capital improvements for administrative purposes as defined by the school facilities board.

(c)  The tax rate associated with each of the proposed capital improvements and the estimated cost of each capital improvement for the owner of a single family home that is valued at one hundred thousand dollars.

I.  For any election conducted to decide whether impact aid revenue bonds shall be issued pursuant to this section:

1.  The ballot shall include the following statement:

The capital improvements that are proposed to be funded through this bond issuance are to exceed the state standards and are in addition to monies provided by the state.

__________ school district is proposing to issue impact aid revenue bonds totaling $__________ to fund capital improvements over and above those funded by the state.  Under the students first capital funding system, _________ school district is entitled to state monies for building renewal, new construction and renovation of school buildings in accordance with state law.

2.  The ballot shall contain the words "bond approval, yes" and "bond approval, no", and the voter shall signify the voter's desired choice.

3.  At least eighty‑five days before the election, the school district shall submit proposed ballot language to the director of the legislative council.  The director of the legislative council shall review the proposed ballot language to determine whether the proposed ballot language complies with this section.  If the director of the legislative council determines that the proposed ballot language does not comply with this section, the director, within ten calendar days of the receipt of the proposed ballot language, shall notify the school district of the director's objections and the school district shall resubmit revised ballot language to the director for approval.

4.  No later than thirty-five days before an impact aid revenue bond election conducted pursuant to this section, the school district shall mail a publicity pamphlet to each household that contains a qualified elector in the school district.  The publicity pamphlet shall contain, at a minimum, the following information:

(a)  The date of the election.

(b)  The voter's polling place and the times it is open.

(c)  An executive summary of the school district's most recent capital plan submitted to the school facilities board.

(d)  A complete list of each proposed capital improvement that will be funded with the proceeds of the bonds and a description of the proposed cost of each improvement, including a separate aggregation of capital improvements for administrative purposes as defined by the school facilities board.

(e)  A statement that impact aid revenue bonds will be fully funded by aid that the school district receives from the federal government and do not require a levy of taxes in the district.

(f)  A statement that if the bonds are approved, the first priority for the impact aid will be to pay the debt service for the bonds and that other uses of the monies are prohibited until the debt service obligation is met.

(g)  A statement that if the impact aid revenue bonds are approved, the school district shall not issue or sell class B bonds while the district has existing indebtedness from impact aid revenue bonds, except for bonds issued to refund any bonds issued by the board.

J.  If the voters approve the issuance of school district class B bonds or impact aid revenue bonds, the school district shall not use the bond proceeds for any purposes other than the proposed capital improvements listed in the publicity pamphlet, except that up to ten per cent of the bond proceeds may be used for general capital expenses, including cost overruns of proposed capital improvements.  The proposed capital improvements may be changed by a subsequent election as provided by this section.

K.  Each school district that issues bonds under this section is required to hold a public meeting each year between September 1 and October 31, until the bond proceeds are spent, at which an update of the progress of capital improvements financed through bonding is discussed and at which the public is permitted an opportunity to comment.  At a minimum, the update shall include a comparison of the current status and the original projections on the construction of capital improvements, the costs of capital improvements and the costs of capital improvements in progress or completed since the prior meeting and the future capital bonding plans of the school district.  The school district shall include in the public meeting a discussion of the school district's use of state capital aid and voter‑approved capital overrides in funding capital improvements, if any.

L.  If an election is held to change the purpose or list of capital projects authorized by prior voter approval to issue bonds pursuant to subsection A, paragraph 5 of this section, the following requirements apply:

1.  The election may be held only on the first Tuesday after the first Monday in November.

2.  No later than thirty-five days before the election, the school district shall mail a publicity pamphlet to each household in the school district that contains a qualified elector.  The publicity pamphlet shall contain, at a minimum, the following information:

(a)  The date of the election.

(b)  The voter's polling place and the times it is open.

(c)  A statement as to why the election was called.

(d)  A complete list of each proposed capital improvement that is in addition to the initial capital improvements presented in the publicity pamphlet when the bonds were approved and the proposed cost of each improvement, including a separate aggregation of capital improvements for administrative purposes as defined by the school facilities board.

(e)  A complete list of each capital improvement that was presented in the publicity pamphlet when the bonds were initially approved and that is proposed to be eliminated or to have its cost reduced, and the proposed cost of each improvement, including a separate aggregation of capital improvements for administrative purposes as defined by the school facilities board.

(f)  Arguments for and against the proposed change, if submitted, as provided by section 15-481, subsection B, paragraph 9.

3.  The ballot shall contain the words "change capital improvements, yes" and "change capital improvements, no", and the voter shall signify the voter's desired choice.

4.  If the election is to add a purpose that was not on the initial ballot, the ballot shall list the purpose that is proposed to be added. 

M.  If an election is held to extend the time to issue bonds pursuant to subsection A, paragraph 6 of this section, the following requirements apply:

1.  The election may be held only on the first Tuesday after the first Monday in November.

2.  No later than thirty-five days before the election, the school district shall mail a publicity pamphlet to each household in the school district that contains a qualified elector.  The publicity pamphlet shall contain, at a minimum, the following information:

(a)  The date of the election.

(b)  The voter's polling place and the times it is open.

(c)  A statement as to why the election was called.

(d)  Arguments for and against the proposed change, if submitted, as provided in section 15‑481, subsection B, paragraph 9.

3.  The ballot shall contain the words "extend time to issue bonds, yes" and "extend time to issue bonds, no", and the voter shall signify the voter's desired choice. END_STATUTE

Sec. 11.  Section 15-792.03, Arizona Revised Statutes, is amended to read:

START_STATUTE15-792.03.  Grand Canyon diploma

A.  The private organization selected pursuant to section 15‑792.02 shall develop the Grand Canyon diploma to be approved and adopted by the state board of education.  School districts and charter schools in this state may choose to offer a Grand Canyon diploma beginning in the 2012‑2013 school year.  A high school student who is enrolled in a school district or charter school that offers a Grand Canyon diploma may choose to pursue a Grand Canyon diploma.

B.  Students are eligible for the Grand Canyon diploma and may be awarded the Grand Canyon diploma at the end of grade ten or during or at the end of grade eleven or twelve if the students meet the criteria.  Students who elect to pursue a Grand Canyon diploma shall participate in a board examination system that consists of internationally benchmarked instructional programs of study chosen by an interstate compact on board examination systems.

C.  Students who are eligible for a Grand Canyon diploma shall have multiple pathways available to them and may:

1.  Enroll the following fall semester in a community college under the jurisdiction of a community college district in this state.  Community colleges under the jurisdiction of a community college district in this state shall admit students who obtain a Grand Canyon diploma and who otherwise meet the qualifications for admission.  The school district or charter school from which the student earned the Grand Canyon diploma shall include that student in the school district's or charter school's student count and shall continue to receive per pupil funding for a student who earns a Grand Canyon diploma until that student would otherwise have graduated at the end of grade twelve, as long as that student is enrolled as a full‑time student in a community college under the jurisdiction of a community college district in this state.  The school district or charter school shall subtract twenty per cent of its average daily membership amount and reimburse the community college if the student has earned a Grand Canyon diploma and is attending a community college as a full‑time student.  If the student attends community college on a community college campus, the school district or charter school shall reimburse the community college district for the amount of operating and capital outlay full-time student equivalency monies.  For the purposes of this paragraph, the amount of operating full‑time student equivalency monies shall be equivalent to the average appropriation per full‑time student equivalent for all community college districts as calculated pursuant to section 15‑1466, subsection C, paragraph 2.  Fifty per cent of the remaining balance of the per pupil funding shall be used for teacher and pupil incentives, including scholarship programs, to offset the costs of board examinations and to provide customized programs of assistance for students who do not pass the board examinations.  The other fifty per cent shall be used for maintenance and operations, including capital.  Under this paragraph, a student who earns a Grand Canyon diploma is responsible for tuition.  A student who earns a Grand Canyon diploma may enroll in community college courses offered on a community college campus or a high school campus, or both.  Notwithstanding any other law, community college districts shall not classify a student who remains in high school pursuant to this paragraph as a full‑time equivalent student. Students who take courses on high school campuses pursuant to this paragraph shall be eligible to participate in extracurricular activities, including interscholastic sports, through the end of grade twelve.  The expenditure by community college districts of payments from the school district or charter school to the community colleges under this section shall not be included under the district expenditure limitation prescribed pursuant to article IX, section 21, Constitution of Arizona.  If the instruction provided under this paragraph is offered on a community college campus, the funding and implementation mechanics between the school district or charter school and the community college shall be determined by agreement between the school district or charter school and the community college.

2.  Remain in high school and enroll in additional advanced preparation board examination programs that are designed to prepare those students for admission to selective postsecondary institutions that offer baccalaureate degree programs.  These board examination programs shall be selected from a list approved by an interstate compact for board examination systems.  The school district or charter school from which the student became eligible for the Grand Canyon diploma shall include that student in the school district's or charter school's student count and shall continue to receive per pupil funding for a student who is eligible for a Grand Canyon diploma until that student would otherwise have graduated at the end of grade twelve, as long as that student is enrolled in approved advanced preparation board examination programs at that school district or charter school.  Students who elect to remain in high school pursuant to this paragraph shall not be prevented from enrolling at a high school after the pupil becomes eligible for a Grand Canyon diploma and shall be eligible to participate in extracurricular activities, including interscholastic sports, through the end of grade twelve.

3.  Enroll in a full‑time career and technical education program offered on a high school campus or a joint technical education district campus, or any combination of these campuses.  Students who elect to remain in high school pursuant to this paragraph shall not be prevented from enrolling at a high school after the pupil becomes eligible for a Grand Canyon diploma and shall be eligible to participate in extracurricular activities, including interscholastic sports, through the end of grade twelve.  The school district or charter school from which the student became eligible for the Grand Canyon diploma shall include that student in the school district's or charter school's student count and shall continue to receive per pupil funding for a student who is eligible for a Grand Canyon diploma until that student would otherwise have graduated at the end of grade twelve, as long as that student is enrolled in an approved full‑time career and technical education program.  Notwithstanding any other law, if the instruction provided under this paragraph is provided by a joint technical education district in a full‑time career and technical education program that is designed to lead to a certificate that is awarded by an industry or recognized as meeting industry standards, the sum of the average daily membership for that pupil shall not exceed 1.25, and the average daily membership shall be apportioned at 1.0 for the joint technical education district and 0.25 for the school district.

4.  Remain in high school without completing the next level of board examination systems and participate in programs of study available to the students through the school district or charter school.  The school district or charter school will continue to include the students in the school district's or charter school's count and shall continue to receive per pupil funding for the students until those students would have otherwise graduated at the end of grade twelve, as long as those students are enrolled in approved programs of study at that school district or charter school.  Students who elect to remain in high school pursuant to this paragraph shall be eligible to participate in extracurricular activities, including interscholastic sports.

5.  If accepted for admission to a university under the jurisdiction of the Arizona board of regents, enroll in the university after completion of additional high school coursework designed to prepare students for admission to selective postsecondary institutions that offer baccalaureate degrees.  The school district or charter school from which the student earned the grand canyon diploma shall include that student in the school district's or charter school's student count and shall continue to receive per pupil funding for a student who earns a grand canyon diploma until that student would otherwise have graduated at the end of grade twelve for as long as that student is enrolled as a full‑time student in the university.  One‑third of the school district's or charter school's average daily membership amount shall be retained by the school district or the operator of the charter school.  One‑third of the school district's or charter school's average daily membership amount shall be retained for use at the school site.  One‑third of the school district's or charter school's average daily membership amount shall be distributed as follows:

(a)  One‑half shall be deposited in a scholarship account established and managed by the school district from which the student graduated specifically for a student who qualifies for the grand canyon diploma and who attends a university under the jurisdiction of the Arizona board of regents as a full‑time student.

(b)  One‑half shall be retained by the university where the student is enrolled.

D.  Students who pursue but do not meet the eligibility requirements for a Grand Canyon diploma at the end of grade ten or eleven shall receive a customized program of assistance during the next school year that addresses areas in which the student demonstrated deficiencies in the approved board examinations.  These students may retake the board examinations at the next available examination administration.  Students may choose to return to a traditional academic program without completing the board examination system curriculum.

E.  The private organization selected pursuant to section 15‑792.02 shall develop detailed requirements for students to become eligible for the Grand Canyon diploma, as approved and adopted by the state board of education, that include at least the following:

1.  Demonstrated skills and knowledge in English and mathematical literacy to be successful in college level courses offered by the community colleges in this state that count toward a degree or certificate without taking remedial or developmental coursework as determined by an interstate compact on board examination systems.

2.  Satisfactory grades on approved board examinations in subjects determined to be necessary to prepare a student to enter community college without remedial or developmental coursework and that do not include coursework required exclusively for entry into an institution that awards baccalaureate degrees.

F.  A student who obtains a Grand Canyon diploma pursuant to this section is not eligible to participate in the early graduation scholarship program established by section 15‑105 if the student elects to pursue one of the pathways prescribed in subsection C, paragraph 1, 2 or 3 of this section. The department of education shall not transmit any monies to the commission for postsecondary education pursuant to section 15‑105, subsection F on behalf of any student who obtains a Grand Canyon diploma pursuant to this section if the student elects to pursue one of the pathways prescribed in subsection C, paragraph 1, 2 or 3 of this section. END_STATUTE

Sec. 12.  Section 15-795.01, Arizona Revised Statutes, is amended to read:

START_STATUTE15-795.01.  Competency-based college-ready educational pathways

A.  In accordance with the rules adopted by the state board of education pursuant to section 15‑203, subsection A, paragraph 39, students who are eligible for a high school diploma through the fulfillment of a defined competency-based college-ready educational pathway shall have multiple pathways available to them and may:

1.  Enroll the following fall semester in a community college under the jurisdiction of a community college district in this state.  Community colleges under the jurisdiction of a community college district in this state shall admit students who obtain a high school diploma through the fulfillment of a defined competency-based educational pathway and who otherwise meet the qualifications for admission.  The school district or charter school from which the student earned the high school diploma shall include that student in the school district's or charter school's student count and shall continue to receive per pupil funding for a student who earns a high school diploma until that student would otherwise have graduated at the end of grade twelve, as long as that student is enrolled as a full-time student in a community college under the jurisdiction of a community college district in this state. The school district or charter school shall subtract twenty per cent of its average daily membership amount and reimburse the community college if the student has earned a high school diploma and is attending a community college as a full-time student.  If the student attends community college on a community college campus, the school district or charter school shall reimburse the community college district for the amount of operating and capital outlay full-time student equivalency monies.  For the purposes of this paragraph, the amount of operating full-time student equivalency monies shall be equivalent to the average appropriation per full-time student equivalent for all community college districts as calculated pursuant to section 15‑1466, subsection C, paragraph 2.  Fifty per cent of the remaining balance of the per pupil funding shall be used for teacher and pupil incentives, including scholarship programs, to offset the costs of competency-based pathways and to provide customized programs of assistance for students who do not demonstrate mastery.  The other fifty per cent shall be used for maintenance and operations, including capital.  Under this paragraph, a student who earns a high school diploma is responsible for tuition.  A student who earns a high school diploma may enroll in community college courses offered on a community college campus or a high school campus, or both.  Notwithstanding any other law, community college districts shall not classify a student who remains in high school pursuant to this paragraph as a full‑time equivalent student.  Students who take courses on high school campuses pursuant to this paragraph shall be eligible to participate in extracurricular activities, including interscholastic sports, through the end of grade twelve.  The expenditure by community college districts of payments from the school district or charter school to the community colleges under this section shall not be included under the district expenditure limitation prescribed pursuant to article IX, section 21, Constitution of Arizona.  If the instruction provided under this paragraph is offered on a community college campus, the funding and implementation mechanics between the school district or charter school and the community college shall be determined by agreement between the school district or charter school and the community college.

2.  Remain in high school and participate in programs of study available to students through the school district or charter school.  The school district or charter school shall continue to include that student in the school district's or charter school's student count and shall continue to receive per pupil funding for a student who is eligible for a high school diploma until that student would otherwise have graduated at the end of grade twelve, as long as that student is enrolled in approved advanced preparation programs of study at that school district or charter school.  Students who elect to remain in high school pursuant to this paragraph shall not be prevented from enrolling at a high school after the student becomes eligible for a high school diploma and shall be eligible to participate in extracurricular activities, including interscholastic sports, through the end of grade twelve.

3.  Enroll in a full-time career and technical education program offered on a high school campus or a joint technical education district campus, or any combination of these campuses.  A student who elects to remain in high school pursuant to this paragraph shall not be prevented from enrolling at a high school after the pupil becomes eligible for a high school diploma and shall be eligible to participate in extracurricular activities, including interscholastic sports, through the end of grade twelve.  The school district or charter school from which the student became eligible for the high school diploma shall include that student in the school district's or charter school's student count and shall continue to receive per pupil funding for a student who is eligible for a high school diploma until that student would otherwise have graduated at the end of grade twelve, as long as that student is enrolled in an approved full-time career and technical education program.  Notwithstanding any other law, if the instruction provided under this paragraph is provided by a joint technical education district in a full-time career and technical education program that is designed to lead to a certificate that is awarded by an industry or recognized as meeting industry standards, the sum of the average daily membership for that pupil shall not exceed 1.25, and the average daily membership shall be apportioned at 1.0 for the joint technical education district and 0.25 for the school district.

4.  If accepted for admission to a university under the jurisdiction of the Arizona board of regents, enroll in the university after completion of additional high school coursework designed to prepare students for admission to selective postsecondary institutions that offer baccalaureate degrees.  The school district or charter school from which the student earned the high school diploma shall include that student in the school district's or charter school's student count and shall continue to receive per pupil funding for a student who earns a high school diploma until that student would otherwise have graduated at the end of grade twelve for as long as that student is enrolled as a full-time student in the university.  One-third of the school district's or charter school's average daily membership amount shall be retained by the school district or the operator of the charter school.  One‑third of the school district's or charter school's average daily membership amount shall be retained for use at the school site.  One-third of the school district's or charter school's average daily membership amount shall be distributed as follows:

(a)  Fifty per cent of this amount shall be deposited in a scholarship account established and managed by the school district or charter school from which the student graduated specifically for a student who qualifies for a diploma and who attends a university under the jurisdiction of the Arizona board of regents as a full-time student.

(b)  Fifty per cent of this amount shall be retained by the university where the student is enrolled.

B.  A student who obtains a high school diploma through the fulfillment of a defined competency-based educational pathway pursuant to this section is not eligible to participate in the early graduation scholarship program established by section 15‑105 if the student elects to pursue one of the pathways prescribed in subsection a of this section.  The department of education shall not transmit any monies to the commission for postsecondary education pursuant to section 15‑105, subsection F on behalf of any student who obtains a high school diploma pursuant to this section if the student elects to pursue one of the pathways prescribed in subsection A of this section.  END_STATUTE

Sec. 13.  Section 15-808, Arizona Revised Statutes, is amended to read:

START_STATUTE15-808.  Arizona online instruction; reports; definitions

A.  Arizona online instruction shall be instituted to meet the needs of pupils in the information age.  The state board of education shall select traditional public schools and the state board for charter schools shall sponsor charter schools to be online course providers or online schools.  The state board of education and the state board for charter schools shall jointly develop standards for the approval of online course providers and online schools based on the following criteria:

1.  The depth and breadth of curriculum choices.

2.  The variety of educational methodologies employed by the school and the means of addressing the unique needs and learning styles of targeted pupil populations, including computer assisted learning systems, virtual classrooms, virtual laboratories, electronic field trips, electronic mail, virtual tutoring, online help desk, group chat sessions and noncomputer based activities performed under the direction of a certificated teacher.

3.  The availability of an intranet or private network to safeguard pupils against predatory and pornographic elements of the internet.

4.  The availability of filtered research access to the internet.

5.  The availability of private individual electronic mail between pupils, teachers, administrators and parents in order to protect the confidentiality of pupil records and information.

6.  The availability of faculty members who are experienced with computer networks, the internet and computer animation.

7.  The extent to which the school intends to develop partnerships with universities, community colleges and private businesses.

8.  The services offered to developmentally disabled populations.

9.  The grade levels that will be served.

B.  Each new school that provides online instruction shall provide online instruction on a probationary status.  After a new school that provides online instruction has clearly demonstrated the academic integrity of its instruction through the actual improvement of the academic performance of its students, the school may apply to be removed from probationary status. The state board of education or the state board for charter schools shall remove from Arizona online instruction any probationary school that fails to clearly demonstrate improvement in academic performance within three years measured against goals in the approved application and the state's accountability system.  The state board of education and the state board for charter schools shall review the effectiveness of each participating school and other information that is contained in the annual report prescribed in subsection D of this section.  All pupils who participate in Arizona online instruction shall reside in this state.  Pupils who participate in Arizona online instruction are subject to the testing requirements prescribed in chapter 7, article 3 of this title.  Upon On enrollment, the school shall notify the parents or guardians of the pupil of the state testing requirements.  If a pupil fails to comply with the testing requirements and the school administers the tests pursuant to this subsection to less than ninety‑five per cent of the pupils in Arizona online instruction, the pupil shall not be allowed to participate in Arizona online instruction.

C.  Beginning July 1, 2010,  The state board of education and the state board for charter schools shall develop annual reporting mechanisms for schools that participate in Arizona online instruction.

D.  The department of education shall compile the information submitted in the annual reports by schools participating in Arizona online instruction. The department of education shall submit the compiled report to the governor, the speaker of the house of representatives and the president of the senate by November 15 of each year.

E.  Each school selected for Arizona online instruction shall ensure that a daily log is maintained for each pupil who participates in Arizona online instruction.  The daily log shall describe the amount of time spent by each pupil participating in Arizona online instruction pursuant to this section on academic tasks.  The daily log shall be used by the school district or charter school to qualify the pupils who participate in Arizona online instruction in the school's average daily attendance calculations pursuant to subsection F of this section.

F.  If a pupil is enrolled in a school district or charter school and also participates in Arizona online instruction, the sum of the average daily membership, which includes enrollment as prescribed in section 15‑901, subsection A, paragraph  1, subdivisions (a) and (b) and daily attendance as prescribed in section 15‑901, subsection A, paragraph  5, for that pupil in the school district or charter school and in Arizona online instruction shall not exceed 1.0.  If the pupil is enrolled in a school district or a charter school and also participates in Arizona online instruction and the sum of the daily membership or daily attendance for that pupil is greater than 1.0, the sum shall be reduced to 1.0 and shall be apportioned between the school district, unless the school district is a joint technical education district subject to the apportionment requirements of section 15‑393, or charter school and Arizona online instruction based on the percentage of total time that the pupil is enrolled or in attendance in the school district or charter school and Arizona online instruction.  The uniform system of financial records shall include guidelines for the apportionment of the pupil enrollment and attendance as provided in this subsection.  Pupils in Arizona online instruction do not incur absences for purposes of this subsection and may generate an average daily attendance of 1.0 for attendance hours during any hour of the day, during any day of the week and at any time between July 1 and June 30 of each fiscal year.  For kindergarten programs and grades one through eight, average daily membership shall be calculated by dividing the instructional hours as reported in the daily log required in subsection E of this section by the applicable hourly requirements prescribed in section 15‑901.  For grades nine through twelve, average daily membership shall be calculated by dividing the instructional hours as reported in the daily log required in subsection E of this section by nine hundred.  The average daily membership of a pupil who participates in online instruction shall not exceed 1.0.  Average daily membership shall not be calculated on the one hundredth day of instruction for the purposes of this section.  Funding shall be determined as follows:

1.  A pupil who is enrolled full-time in Arizona online instruction shall be funded for online instruction at ninety‑five per cent of the base support level that would be calculated for that pupil if that pupil were enrolled as a full‑time student in a school district or charter school that does not participate in Arizona online instruction.  Charter additional assistance, capital outlay revenue limit and soft capital allocation limit district additional assistance shall be calculated in the same manner they would be calculated if the student were enrolled in a district or charter school that does not participate in Arizona online instruction.

2.  A pupil who is enrolled part-time in Arizona online instruction shall be funded for online instruction at eighty‑five per cent of the base support level that would be calculated for that pupil if that pupil were enrolled as a part‑time student in a school district or charter school that does not participate in Arizona online instruction.  Charter additional assistance, capital outlay revenue limit and soft capital allocation limit district additional assistance shall be calculated in the same manner they would be calculated if the student were enrolled in a district or charter school that does not participate in Arizona online instruction.

G.  If the academic achievement of a pupil declines while the pupil is participating in Arizona online instruction, the pupil's parents, the pupil's teachers and the principal or head teacher of the school shall confer to evaluate whether the pupil should be allowed to continue to participate in Arizona online instruction.

H.  To ensure the academic integrity of pupils who participate in online instruction, Arizona online instruction shall include multiple diverse assessment measures and the proctored administration of required state standardized tests.

I.  For the purposes of this section:

1.  "Full-time student" means:

(a)  A student who is at least five years of age before September 1 of a school year and who is enrolled in a school kindergarten program that meets at least three hundred forty‑six hours during the school year.

(b)  A student who is at least six years of age before September 1 of a school year, who has not graduated from the highest grade taught in the school and who is regularly enrolled in a course of study required by the state board of education.  For first, second and third grade students, the instructional program shall meet at least seven hundred twelve hours.  For fourth, fifth and sixth grade students, the instructional program shall meet at least eight hundred ninety hours during the school year.

(c)  Seventh and eighth grade students or ungraded students who are at least twelve, but under fourteen, years of age on or before September 1 and who are enrolled in an instructional program of courses that meets at least one thousand sixty‑eight hours during the school year.

(d)  For high schools, except as provided in section 15-105, a student not graduated from the highest grade taught in the school district, or an ungraded student at least fourteen years of age on or before September 1, and who is enrolled in at least four courses throughout the year that meet at least nine hundred hours during the school year.  A full-time student shall not be counted more than once for computation of average daily membership.

2.  "Online course provider" means a school other than an online school that is selected by the state board of education or the state board for charter schools to participate in Arizona online instruction pursuant to this section and that provides at least one online academic course that is approved by the state board of education.

3.  "Online school" means a school that provides at least four online academic courses or one or more online courses for the equivalent of at least five hours each day for one hundred eighty school days and that is a charter school that is sponsored by the state board for charter schools or a traditional public school that is selected by the state board of education to participate in Arizona online instruction.

4.  "Part-time student" means:

(a)  Any student who is enrolled in a program that does not meet the definition in paragraph 1 of this subsection shall be funded at eighty-five per cent of the base support level that would be calculated for that pupil if that pupil were enrolled as a part-time student in a school district or charter school that does not participate in Arizona online instruction.

(b)  A part-time student of seventy‑five per cent average daily membership shall be enrolled in at least three subjects throughout the year that offer for first, second and third grade students at least five hundred thirty-four instructional hours in a school year and for fourth, fifth and sixth grade students at least six hundred sixty‑eight instructional hours in a school year.  A part-time student of fifty per cent average daily membership shall be enrolled in at least two subjects throughout the year that offer for first, second and third grade students at least three hundred fifty-six instructional hours in a school year and for fourth, fifth and sixth grade students at least four hundred forty-five instructional hours in a school year.  A part-time student of twenty‑five per cent average daily membership shall be enrolled in at least one subject throughout the year that offers for first, second and third grade students at least one hundred seventy-eight instructional hours in a school year and for fourth, fifth and sixth grade students at least two hundred twenty-three instructional hours in a school year.

(c)  For seventh and eighth grade students, a part-time student of seventy‑five per cent average daily membership shall be enrolled in at least three subjects throughout the year that offer at least eight hundred one instructional hours in a school year.  A part-time student of fifty per cent average daily membership shall be enrolled in at least two subjects throughout the year that offer at least five hundred thirty-four instructional hours in a school year.  A part-time student of twenty‑five per cent average daily membership shall be enrolled in at least one subject throughout the year that offers at least two hundred sixty-seven instructional hours in a school year.

(d)  For high school students, a part-time student of seventy‑five per cent average daily membership shall be enrolled in at least three subjects throughout the year that offer at least six hundred seventy-five instructional hours in a school year.  A part-time student of fifty per cent average daily membership shall be enrolled in at least two subjects throughout the year that offer at least four hundred fifty instructional hours in a school year.  A part-time student of twenty‑five per cent average daily membership shall be enrolled in at least one subject throughout the year that offers at least two hundred twenty-five instructional hours in a school year." END_STATUTE

Renumber to conform

Page 19, between lines 16 and 17, insert:

"Sec. 15.  Section 15-901.05, Arizona Revised Statutes, is amended to read:

START_STATUTE15-901.05.  Application of school finance changes

To the extent permitted by the Constitution of Arizona, unless otherwise specified by law, the department shall apply any change to state law that occurs after the effective date of this section July 29, 2010 and that modifies or impacts the school finance formulas prescribed in this title, including the base support level, the base revenue control limit, the transportation support level, the transportation revenue control limit, the capital outlay revenue limit, the soft capital allocation district additional assistance, the general budget limit,  or the unrestricted budget limit or the soft capital allocation limit, on the effective date of that change to state law so that it applies to the entire fiscal year in which the change became effective. END_STATUTE

Sec. 16.  Section 15-903, Arizona Revised Statutes, is amended to read:

START_STATUTE15-903.  Budget format; prohibited expenditures

A.  The superintendent of public instruction in conjunction with the auditor general shall prepare and prescribe a budget format to be utilized by all school districts.

B.  The budget format shall be designed to allow all school districts to plan and provide in detail for the use of available funds.  The budget format shall contain distinct sections for, but need not be limited to, maintenance and operation, debt service, special projects, capital outlay, adjacent ways and classroom site fund.  The maintenance and operation section shall include, but need not be limited to, separate subsections for regular education programs, special education programs and operational expenditures for pupil transportation.  Each subsection shall clearly distinguish classroom instruction expenditures.  The special education program subsection shall include, but is not limited to, programs for each disability classification as defined in section 15‑761 and programs for gifted, vocational and technological technical education, remedial education and bilingual students.  The total expenditures for each of these programs shall be included on the budget form.  The pupil transportation subsection shall include all operational expenditures relating to the transportation of pupils, including all operational expenditures within a contract if the school district contracts for pupil transportation.

C.  The capital outlay section of the budget shall include separate subsections a subsection for unrestricted capital outlay and soft capital allocation.  The soft capital allocation subsection shall include budgeted expenditures as prescribed in section 15‑962.  The unrestricted capital outlay subsection shall include budgeted expenditures for acquisitions by purchase, lease‑purchase or lease of capital items as defined in the uniform system of financial records. These sections and subsections and shall include:

1.  Land, buildings and improvements to land and buildings, including labor and related employee benefits costs and material costs if work is performed by school district employees.

2.  Furniture, furnishings, athletic equipment and other equipment, including computer software.

3.  Pupil and nonpupil transportation vehicles and equipment, including all capital expenditures within a contract if the school district contracts for pupil transportation.

4.  Textbooks and related printed subject matter materials adopted by the governing board.

5.  Instructional aids.

6.  Library books.

7.  Payment of principal and interest on bonds.

8.  School district administration emergency needs that are directly related to pupils.

D.  The budget format shall contain distinct subsections for the following:

1.  Special programs to improve academic achievement of pupils in kindergarten programs and grades one through three as provided in section 15‑482.

2.  School plant funds.

3.  Capital outlay budget increases as provided in section 15‑481.

4.  Property taxation, including the following:

(a)  The primary tax rates for the school district for the current year and the budget year.

(b)  The secondary tax rates for maintenance and operation, K‑3 and capital overrides for the school district for the current year and the budget year.

(c)  The secondary tax rates for class A bonds for the school district for the current year and the budget year.

(d)  The secondary tax rates for class B bonds for the school district for the current year and the budget year.

5.  A description of any corrections or adjustments made to the budget pursuant to section 15‑915.

E.  The budget format shall also contain:

1.  A statement identifying proposed pupil‑teacher ratios and pupil‑staff ratios relating to the provision of special education services for the budget year.

2.  A statement identifying the number of full‑time equivalent certified employees.

F.  The special projects section shall include budgeted expenditures for state special projects, including special adult projects, career education, deficiencies correction fund projects, building renewal fund projects and new school facilities fund projects, such federal special projects as ESEA title programs, vocational education and title IV Indian education, and other special projects.

G.  A school district shall not make expenditures for campaign literature associated with school district or charter school officials.  If the superintendent of public instruction determines that a school district has violated this subsection, the superintendent of public instruction may withhold any portion of the school district's apportionment of state aid.

H.  The budget format shall include an electronic format that shall be submitted for each proposed, adopted and revised budget. END_STATUTE

Sec. 17.  Section 15-904, Arizona Revised Statutes, is amended to read:

START_STATUTE15-904.  School district annual financial report; publication; summary

A.  The governing board of each school district shall publish an annual financial report for the prior fiscal year by November 15.  The auditor general in conjunction with the department of education shall prescribe the format of the financial report to be used by school districts.  The financial report shall contain budgeted and actual expenditures for the preceding fiscal year and shall be prepared and distributed by October 15 by the school district with a copy to the county school superintendent.  A copy of the annual financial report shall be submitted electronically by the school district to the superintendent of public instruction by October 15.  The annual financial report shall be approved by the county school superintendent in an electronic procedure as prescribed by the department of education.  On or before October 15, the governing board shall submit the annual financial report for the previous fiscal year to the department of education, which shall prominently display this information about that school district on the website maintained by the department.  If the school district maintains a website, the school district shall post a link to the website of the department of education where this information about the school district is posted.  School districts that are subject to section 15‑914.01 are not required to send a copy to the county school superintendent.

B.  In addition to the information required in subsection A of this section, the annual financial report shall contain detailed information on the school district budgeted and actual expenditures from the bond building fund, the soft capital allocation unrestricted capital fund, the deficiencies correction fund, the building renewal fund and the new school facilities fund, including but not limited to information on classified salaries, employee benefits, interest and fiscal charges, capital lease agreements, land and improvements, buildings and improvements, furniture and equipment, technology and vehicles and transportation equipment for pupils.  The information shall specify whether the expenditures are for school district renovation or for new construction, the cost per square foot and land acquisition costs, as appropriate.

C.  Except as provided in subsection D of this section, the governing board shall publish, by November 15, the annual financial report for the school district either in a newspaper of general circulation within the school district, by electronic transmission of the information to the department of education for posting on the department's website or in the official newspaper of the county as defined prescribed in section 11‑255, or the governing board may mail the annual financial report for the school district to each household in the school district.  If the governing board chooses to transmit the report electronically to the department of education, the school district shall provide a link on the school district's website to the report on the department's website.  If the governing board chooses to publish the report in a newspaper, the size of the newspaper print shall be at least eight‑point type.  The cost of publication or mailing shall be a charge against the school district.  The publisher's affidavit of publication shall be filed by the governing board of the school district with the superintendent of public instruction within thirty days after publication.

D.  The governing board may publish or mail a summary of the annual financial report in the same manner as provided in subsection C of this section.  The auditor general in conjunction with the department of education shall prescribe the form of the summary of the annual financial report for use by the governing boards.

E.  The superintendent of public instruction shall compile the financial reports of the school districts, including expenditure data for federal and state projects, and shall report to the governor and the legislature on or before January 15 of each year as provided in section 15‑255. END_STATUTE

Sec. 18.  Section 15-905, Arizona Revised Statutes, is amended to read:

START_STATUTE15-905.  School district budgets; notice; adoption; aggregate budget limit; summary; adjustments; impact aid fund; definition

A.  Not later than July 5 of each year or no later than the publication of notice of the public hearing and board meeting as required by this section, the governing board of each school district shall prepare and furnish to the superintendent of public instruction and the county school superintendent, unless waived by the county school superintendent, a proposed budget in electronic format for the budget year, which shall contain the information and be in the form as provided by the department of education. The proposed budget shall include the following:

1.  The total amount of revenues from all sources that was necessary to meet the school district's budget for the current year.

2.  The total amount of revenues by source that will be necessary to meet the proposed budget of the school district, excluding property taxes. The governing board shall prepare the proposed budget and a summary of the proposed budget.  Both documents shall be kept on file at the school district office and shall be made available to the public upon request.  Not later than July 5 of each year or not later than the publication of notice of the public hearing and board meeting required by this subsection, the governing board shall submit the proposed budget to the department of education, which shall prominently display this information about that school district on the website maintained by the department.  If the school district maintains a website, the school district shall post a link to the website of the department of education where this information about the school district is posted.  The auditor general in conjunction with the department of education shall prescribe the form of the summary of the proposed budget for use by governing boards.  School district governing boards may include in the proposed budget any items or amounts which are authorized by legislation filed with the secretary of state and which will become effective during the budget year.  If subsequent events prevent the legislation from becoming effective, school district governing boards must reduce their budgets by the amounts budgeted pursuant to the legislation which did not become effective.

B.  The governing board of each school district shall prepare a notice fixing a time not later than July 15 and designating a public place within each school district at which a public hearing and board meeting shall be held.  The governing board shall present the proposed budget for consideration of the residents and the taxpayers of the school district at such hearing and meeting.

C.  The governing board of each school district shall publish or mail, prior to the hearing and meeting, a copy of the proposed budget or the summary of the proposed budget and, in addition, a notice of the public hearing and board meeting no later than ten days prior to the meeting.  The proposed budget and the summary of the proposed budget shall contain the percentage of increase or decrease in each budget category of the proposed budget as compared to each category of the budget for the current year. Notification shall be either by publication in a newspaper of general circulation within the school district in which the size of the newspaper print shall be at least eight‑point type, by electronic transmission of the information to the department of education for posting on the department's website or by mailing the information to each household in the school district.  The cost of publication, website posting or mailing shall be a charge against the school district.  The publisher's affidavit of publication shall be filed by the governing board with the superintendent of public instruction within thirty days after publication.  If the budget or proposed budget and notice are posted on a website maintained by the department of education or mailed, the board shall file an affidavit with the superintendent of public instruction within thirty days after the mailing or the date that the information is posted on the website.  If a truth in taxation notice and hearing is required under section 15‑905.01, the governing board may combine the notice and hearing under this section with the truth in taxation notice and hearing.

D.  At the time and place fixed in the notice, the governing board shall hold the public hearing and present the proposed budget to the persons attending the hearing.  Upon On request of any person, the governing board shall explain the budget, and any resident or taxpayer of the school district may protest the inclusion of any item.  A governing board member who has a substantial interest, as defined in section 38‑502, in a specific item in the school district budget shall refrain from voting on the specific item.  A governing board member may participate without creating a conflict of interest in adoption of a final budget even though the member may have substantial interest in specific items included in the budget.

E.  Immediately following the public hearing the president shall call to order the governing board meeting for the purpose of adopting the budget. The governing board shall adopt the budget, which shall not exceed the general budget limit,  or the unrestricted capital budget limit or the soft capital allocation limit, making such deductions as it sees fit but making no additions to the proposed budget total for maintenance and operations or capital outlay, and shall enter the budget as adopted in its minutes.  Not later than July 18, the budget as finally adopted shall be filed by the governing board with the county school superintendent who shall immediately transmit a copy to the board of supervisors.  Not later than July 18, the budget as finally adopted shall be submitted electronically to the superintendent of public instruction.  Not later than July 18, the governing board shall submit the budget as finally adopted to the department of education, which shall prominently display this information about that school district on the website maintained by the department.  If the school district maintains a website, the school district shall post a link to the website of the department of education where this information about the school district is posted.  On or before October 30, the superintendent of public instruction shall review the budget and notify the governing board if the budget is in excess of the general budget limit,  or the unrestricted capital budget limit or the soft capital allocation limit.  The governing board shall revise the budget as follows:

1.  If the governing board receives notification that the budget exceeds the general budget limit,  or the unrestricted capital budget limit or the soft capital allocation limit by one per cent of the general budget limit or one hundred thousand dollars, whichever is less, it shall adopt on or before December 15, after it gives notice and holds a public meeting in a similar manner as provided in subsections C and D of this section, a revised budget for the current year, which shall not exceed the general budget limit,  or the unrestricted capital budget limit or the soft capital allocation limit.

2.  If the governing board receives notification that the budget exceeds the general budget limit,  or the unrestricted capital budget limit or the soft capital allocation limit by less than the amount prescribed in paragraph 1 of this subsection, the governing board shall adjust the budget and expenditures so as not to exceed the general budget limit,  or the unrestricted capital budget limit or the soft capital allocation limit for the current year.

3.  On or before December 18, the governing board shall file the revised budget it adopts with the county school superintendent who shall immediately transmit a copy to the board of supervisors.  Not later than December 18, the budget as revised shall be submitted electronically to the superintendent of public instruction.  School districts that are subject to section 15‑914.01 are not required to send a copy of revised budgets to the county school superintendent.  Procedures for adjusting expenditures or revising the budget shall be as prescribed in the uniform system of financial records.

F.  The governing board of each school district may budget for expenditures within the school district budget as follows:

1.  Amounts within the general budget limit, as provided in section 15‑947, subsection C, may only be budgeted in the following sections of the budget:

(a)  The maintenance and operation section.

(b)  The capital outlay section.

2.  Amounts within the unrestricted capital budget limit, as provided in section 15‑947, subsection D, may only be budgeted in the unrestricted capital outlay subsection of the budget.  Monies received pursuant to the unrestricted capital budget limit shall be placed in the unrestricted capital outlay fund.  The monies in the fund are not subject to reversion.

3.  The soft capital allocation limit, as provided in section 15‑947, subsection E, may only be budgeted in the soft capital allocation subsection of the budget.

G.  The governing board may authorize the expenditure of monies budgeted within the maintenance and operation section of the budget for any subsection within the section in excess of amounts specified in the adopted budget only by action taken at a public meeting of the governing board and if the expenditures for all subsections of the section do not exceed the amount budgeted as provided in this section.

H.  The aggregate budget limit is the sum of the following:

1.  The general budget limit as determined in section 15‑947 for the budget year.

2.  The unrestricted capital budget limit as determined in section 15‑947 for the budget year.

3.  The soft capital allocation limit for the budget year as determined in section 15‑947.

4.  3.  Federal assistance, excluding title VIII of the elementary and secondary education act of 1965 monies.

I.  School districts which overestimated tuition revenues as provided in section 15‑947, subsection C, paragraph 2 shall adjust the general budget limit and expenditures based upon tuition revenues for attendance of nonresident pupils during the current fiscal year.  School districts which underestimated tuition revenues may adjust their budgets prior to May 15 based upon tuition revenues for attendance of nonresident pupils during the current fiscal year.  School districts which overestimated revenues as provided in section 15‑947, subsection C, paragraph 2, subdivision (a), items (iii), (iv) and (v) and subdivision (d) shall adjust the general budget limit and expenditures based on actual revenues during the current fiscal year. School districts which underestimated such revenues may adjust their budgets before May 15 based on actual revenues during the current fiscal year.  Procedures for completing adjustments shall be as prescribed in the uniform system of financial records.  Not later than May 18, the budget as adjusted shall be submitted electronically to the superintendent of public instruction.

J.  A common school district not within a high school district whose estimated tuition charge for high school pupils exceeds the actual tuition charge for high school pupils shall adjust the general budget limit and expenditures based on the actual tuition charge.  Not later than May 18, the budget as adjusted shall be submitted electronically to the superintendent of public instruction.  A common school district not within a high school district whose estimated tuition charge for high school pupils is less than the actual tuition charge for high school pupils may adjust its budget before May 15 based on the actual tuition charge.  Procedures for completing adjustments shall be as prescribed in the uniform system of financial records.  If the adjusted general budget limit requires an adjustment of state aid and if the adjustment to state aid is not made in the current year, the superintendent of public instruction shall adjust by August 15 of the succeeding fiscal year the apportionment of state aid to the school district to correct any overpayment or underpayment of state aid received during the current year.

K.  The governing board may include title VIII of the elementary and secondary education act of 1965 assistance allocated for children with disabilities, children with specific learning disabilities, children residing on Indian lands and children residing within the boundaries of an accommodation school that is located on a military reservation and that is classified as a heavily impacted local educational agency pursuant to 20 United States Code section 7703 which is in addition to basic assistance when determining the general budget limit as prescribed in section 15‑947, subsection C.  The increase in the general budget limit for children residing within the boundaries of an accommodation school that is located on a military reservation and that is classified as a heavily impacted local education agency shall equal the dollar amount calculated pursuant to 20 United States Code section 7703(b)(2).  The governing board may adjust before May 15 the budget for the current year based on any adjustments which result in increases over the amount estimated by the superintendent of public instruction for title VIII of the elementary and secondary education act of 1965 assistance for such pupils for the fiscal year preceding the current year.  The governing board shall adjust before May 15 the budget for the current year based on any adjustments which result in decreases in the amount estimated by the superintendent of public instruction for title VIII of the elementary and secondary education act of 1965 assistance for such pupils for the fiscal year preceding the current year.  Not later than May 18, the budget as adjusted shall be submitted electronically to the superintendent of public instruction.  Procedures for complying with this subsection shall be as prescribed in the uniform system of financial records.

L.  The department of education shall notify the state board of education if expenditures by any school district exceed the general budget limit prescribed in section 15‑947, subsection C, the unrestricted capital budget limit, the soft capital allocation limit prescribed in section 15‑947, subsection E, the school plant fund limits prescribed in section 15‑1102, subsection B, the maintenance and operation section of the budget or the capital outlay section of the budget.  If the expenditures of any school district exceed these limits or sections of the budget without authorization as provided in section 15‑907, and if the state board of education determines that the equalization assistance for education received by the school district as provided in section 15-971 does not conform with statutory requirements, the state board of education shall reduce the state aid for equalization assistance for education for the school district computed as provided in section 15‑971 during the fiscal year subsequent to the fiscal year in which the excess equalization assistance for education was received by an amount equal to the excess equalization assistance for education, except that in case of hardship to the school district, the superintendent of public instruction may approve reductions partly in the first subsequent year and partly in the second subsequent year.  If the state board of education determines that the equalization assistance for education received by the school district conforms with statutory requirements, the state board of education shall not reduce the district's equalization assistance for education pursuant to this subsection but the district shall reduce the budget limits as required in subsection M of this section.  A school district that disagrees with the department of education's determination regarding an excess expenditure under this subsection may request a hearing before the state board of education.

M.  The governing board of a school district shall reduce the general budget limit,  or the unrestricted capital budget limit or the soft capital allocation limit for the year subsequent to the year in which the expenditures were in excess of the applicable limit or section of the budget by the amount determined in subsection L of this section, except that in case of hardship to the school district, the superintendent of public instruction may approve reductions partly in the first subsequent year and partly in the second subsequent year.  The reduction in the limit is applicable to each school district which has exceeded the general budget limit, the unrestricted capital budget limit, the soft capital allocation limit or a section of the budget even if the reduction exceeds the state aid for equalization assistance for education for the school district.

N.  Except as provided in section 15‑916, no expenditure shall be made by any school district for a purpose not included in the budget or in excess of the aggregate budget limit prescribed in this section, except that if no budget has been adopted, from July 1 to July 15 the governing board may make expenditures if the total of the expenditures does not exceed ten per cent of the prior year's aggregate budget limit.  Any expenditures made from July 1 to July 15 and prior to the adoption of the budget shall be included in the total expenditures for the current year.  No expenditure shall be made and no debt, obligation or liability shall be incurred or created in any year for any purpose itemized in the budget in excess of the amount specified for the item irrespective of whether the school district at any time has received or has on hand funds in excess of those required to meet the expenditures, debts, obligations and liabilities provided for under the budget except expenditures from cash controlled funds as defined by the uniform system of financial records and except as provided in section 15‑907 and subsection G of this section.  This subsection does not prohibit any school district from prepaying insurance premiums or magazine subscriptions, or from prepaying any item which is normally prepaid in order to procure the service or to receive a discounted price for the service, as prescribed by the uniform system of financial records.

O.  The governing board of a school district which is classified as a heavily impacted school district having twenty per cent or more pupils pursuant to 20 United States Code section 238(d)1(A) may determine its eligibility to increase the amount that may be included in determining the general budget limit as provided in subsection K of this section and may increase the amount as follows:

1.  For fiscal year 1988‑1989:

(a)  Multiply one thousand ninety‑four dollars by the number of children with disabilities or children with specific learning disabilities, excluding children who also reside on Indian lands, reported to the division of impact aid, United States department of education in the district's application for fiscal year 1987‑1988.

(b)  Multiply five hundred forty‑seven dollars by the number of children residing on Indian lands, excluding children who have disabilities or also have specific learning disabilities, reported to the division of impact aid, United States department of education in the district's application for fiscal year 1987‑1988.

(c)  Multiply one thousand nine hundred fourteen dollars by the number of children residing on Indian lands who have disabilities or also have specific learning disabilities reported to the division of impact aid, United States department of education in the district's application for fiscal year 1987‑1988.

(d)  Add the amounts determined in subdivisions (a) through (c) of this paragraph.

(e)  If the amount of title VIII of the elementary and secondary education act of 1965 assistance as provided in subsection K of this section is less than the sum determined in subdivision (d) of this paragraph, the district is eligible to use the provisions of this subsection.

2.  For budget years after 1988‑1989, use the provisions of paragraph 1 of this subsection, but increase each dollar amount by the growth rate for that year as prescribed by law, subject to appropriation and use the number of children reported in the appropriate category for the current fiscal year.

3.  If the district is eligible to use the provisions of this subsection, subtract the amount of title VIII of the elementary and secondary education act of 1965 assistance determined in subsection K of this section from the sum determined in paragraph 1, subdivision (d) of this subsection.  The difference is the increase in the amount that may be included in determining the general budget limit as provided in subsection K of this section, if including this amount does not increase the district's primary tax rate for the budget year.  If the amount of title VIII of the elementary and secondary education act of 1965 assistance determined in subsection K of this section is adjusted for the current year, the increase determined in this paragraph shall be recomputed using the adjusted amount and the recomputed increase shall be reported to the department of education by May 15 on a form prescribed by the department of education.

4.  If a district uses the provisions of this subsection, the district is not required to adjust its budget for the current year based on adjustments in the estimated amount of title VIII of the elementary and secondary education act of 1965 assistance as provided in subsection K of this section.

P.  A school district, except for an accommodation school, which applies for title VIII of the elementary and secondary education act of 1965 assistance during the current year may budget an amount for title VIII of the elementary and secondary education act of 1965 administrative costs for the budget year.  The amount budgeted for title VIII of the elementary and secondary education act of 1965 administrative costs is exempt from the revenue control limit and may not exceed an amount determined for the budgeted year as follows:

1.  Determine the minimum cost.  The minimum cost for fiscal year 1990‑1991 is two thousand three hundred forty‑three dollars.  For fiscal year 1991‑1992 and thereafter, the minimum cost is the minimum cost for the prior year increased by the growth rate as prescribed by law, subject to appropriation.

2.  Determine the hourly rate.  The hourly rate for fiscal year 1990‑1991 is nine dollars thirty‑eight cents.  For fiscal year 1991‑1992 and thereafter, the hourly rate is the hourly rate for the prior year increased by the growth rate as prescribed by law, subject to appropriation.

3.  Determine the title VIII of the elementary and secondary education act of 1965 revenues available by subtracting the amount of title VIII of the elementary and secondary education act of 1965 assistance used to increase the general budget limit as provided in subsections K and O of this section for the current fiscal year from the total amount of title VIII of the elementary and secondary education act of 1965 revenues received in the current fiscal year.

4.  Determine the total number of administrative hours as follows:

(a)  Determine the sum of the following:

(i)  1.00 hours for each high impact pupil who is not disabled or does not have specific learning disabilities.

(ii)  1.25 hours for each high impact pupil who is disabled or has specific learning disabilities.

(iii)  0.25 hours for each low impact pupil who is not disabled or does not have specific learning disabilities.

(iv)  0.31 hours for each low impact pupil who is disabled or has specific learning disabilities.

(b)  For the purposes of this paragraph:

(i)  "High impact pupil" means a pupil who resides on Indian lands or a pupil who resides on federal property or in low rent housing and whose parent is employed on federal property or low rent housing property or is on active duty in uniformed service, as provided in title VIII of the elementary and secondary education act of 1965, section 8003(a) (20 United States Code section 7703) and as reported in the application for title VIII of the elementary and secondary education act of 1965 assistance in the current year.

(ii)  "Low impact pupil" means a pupil who resides on nonfederal property and has a parent who is employed on federal property or low rent housing property or is on active duty in a uniformed service or a pupil who resides on federal property or in low rent housing and who does not have a parent who is employed on federal property or low rent housing property or is on active duty in uniformed service, as provided in title VIII of the elementary and secondary education act of 1965, section 8003(a) (20 United States Code section 7703) and as reported in the application for title VIII of the elementary and secondary education act of 1965 assistance in the current year.

5.  Multiply the total number of administrative hours determined in paragraph 4 of this subsection by the hourly rate determined in paragraph 2 of this subsection.

6.  Determine the greater of the minimum cost determined in paragraph 1 of this subsection or the product determined in paragraph 5 of this subsection.

7.  Add to the amount determined in paragraph 6 of this subsection the amount, if any, to be expended by the school district in the budget year through an intergovernmental agreement with other school districts or the department of education to provide title VIII of the elementary and secondary education act of 1965 technical assistance to participating districts.

8.  Determine the lesser of the amount determined in paragraph 7 of this subsection or the revenues available as determined in paragraph 3 of this subsection.

9.  The amount determined in paragraph 8 of this subsection is the maximum amount which may be budgeted for title VIII of the elementary and secondary education act of 1965 administrative costs for the budget year as provided in this subsection.

10.  If the governing board underestimated the amount that may be budgeted for title VIII of the elementary and secondary education act of 1965, section 8007 administrative costs for the current year, the board may adjust the general budget limit and the budget before May 15.  If the governing board overestimated the amount that may be budgeted for title VIII of the elementary and secondary education act of 1965 administrative costs for the current year, the board shall adjust the general budget limit and the budget before May 15.

Q.  If a school district governing board has adopted a budget for a fiscal year based on forms and instructions provided by the auditor general and the department of education for that fiscal year and if, as a result of the enactment or nonenactment of proposed legislation after May 1 of the previous fiscal year, the budget is based on incorrect limits, does not include items authorized by law or does not otherwise conform with law, the governing board may revise its budget at a public hearing on or before September 15 to conform with the law.  Not later than September 18, the budget as adjusted shall be submitted electronically to the superintendent of public instruction.  If the governing board does not revise the budget on or before September 15 and if the budget includes any items not authorized by law or if the budget exceeds any limits, the governing board shall adjust or revise the budget as provided in subsection E of this section.

R.  Notwithstanding any other law, if a school district receives assistance pursuant to title VIII of the elementary and secondary education act of 1965, the school district shall establish a local level fund designated as the impact aid fund and deposit the impact aid monies received in the fund.  The school district shall separately account for monies in the fund and shall not combine monies in the fund with any other source of local, state or federal assistance.  Monies in the fund shall be expended pursuant to federal law only for the purposes allowed by this title.  The school district shall account for monies in the fund according to the uniform system of financial records as prescribed by the auditor general.  The superintendent of public instruction shall separately account for monies in each school district's impact aid fund, if an impact aid fund is established, in the annual report required by section 15‑255.  Monies in the fund are considered federal monies and are not subject to legislative appropriation.

S.  For the purposes of this section, "title VIII of the elementary and secondary education act of 1965 assistance" means, for the current year, an amount equal to the final determination of title VIII of the elementary and secondary education act of 1965 assistance for the fiscal year preceding the current year as confirmed by the division of impact aid, United States department of education or, if a final determination has not been made, the amount estimated by the superintendent of public instruction as confirmed by the division of impact aid, United States department of education and, for the budget year, an amount equal to the determination of title VIII of the elementary and secondary education act of 1965 assistance for the fiscal year preceding the budget year as estimated by the superintendent of public instruction. END_STATUTE

Sec. 19.  Section 15-906, Arizona Revised Statutes, is amended to read:

START_STATUTE15-906.  Procedure for payment of levy fund liabilities payable on June 30; lapsing of levy funds with balance for reduction of taxes

A.  Annually on or before June 30, each school district shall prepare for all levy funds a list of liabilities for goods received or services rendered on or before June 30 which will not be paid by June 30 of the current fiscal year.

B.  Each school district having levy fund liabilities payable on June 30 shall file an advice of encumbrance with the county school superintendent on or before July 18, in the manner and upon a form to be prescribed in the uniform system of financial records.  The county school superintendent shall encumber amounts that are included in year to date expenditures not to exceed the budget and that are available to pay the liabilities pursuant to section 15‑304.  Any cash balances remaining in the maintenance and operation, the unrestricted capital outlay, the soft capital allocation and the adjacent ways funds after encumbrances on June 30 of the current year except reverted monies as provided in section 15‑991.02 that will be budgeted in the unrestricted capital outlay fund in the following fiscal year pursuant to section 15‑947, subsection D, paragraphs 4 and 5 and that will be budgeted in the soft capital allocation fund in the following fiscal year pursuant to section 15‑947, subsection E, paragraphs 2 and 3 shall be used for reduction of school district taxes for the budget year.

C.  The county school superintendent may draw warrants against the obligated in contract amounts pursuant to subsection B of this section for a period of sixty days immediately following the close of the fiscal year.

D.  After expiration of the period of sixty days immediately following the close of each fiscal year, the remaining obligated in contract balance shall lapse and no further payments from the maintenance and operation, unrestricted capital outlay, soft capital allocation and adjacent ways funds shall be made on any claim for expenditures of the prior fiscal year.

E.  School districts that are subject to section 15‑914.01 shall adhere to the duties described in section 15‑304 for the purposes of this section." END_STATUTE

Renumber to conform

Page 19, between lines 36 and 37, insert:

"Sec. 21.  Section 15-910, Arizona Revised Statutes, is amended to read:

START_STATUTE15-910.  School district budgets; excess utility costs; desegregation costs; tuition costs for bond issues; costs for registering warrants; report

A.  The governing board may budget for the district's excess utility costs which are specifically exempt from the district's revenue control limit.  If approved by the qualified electors voting at a statewide general election, the exemption from the revenue control limit under this subsection expires at the end of the 2008‑2009 budget year.  The uniform system of financial records shall specify expenditure items allowable as excess utility costs, which are limited to direct operational costs of heating, cooling, water and electricity, telephone communications and sanitation fees.  The department of education and the auditor general shall include in the maintenance and operation section of the budget format, as provided in section 15‑903, a separate line for utility expenditures and a special excess utility cost category.  The special excess utility cost category shall contain budgeted expenditures for excess utility costs, determined as follows:

1.  Determine the lesser of the total budgeted or total actual utility expenditures for fiscal year 1984‑1985.

2.  Multiply the amount in paragraph 1 of this subsection by the total percentage increase or decrease in the revenue control limit and the capital outlay revenue limit for the budget year over the revenue control limit and the capital outlay revenue limit for fiscal year 1984‑1985 excluding monies available from a career ladder program or a teacher compensation program provided for in section 15‑952.

3.  The sum of the amounts in paragraphs 1 and 2 of this subsection is the amount budgeted in the utility expenditure line.

4.  Additional expenditures for utilities are budgeted in the excess utility cost category.

B.  The governing board shall apply the same percentage increase or decrease allowed in the revenue control limit and the capital outlay revenue limit as provided in section 15‑905, subsection E or section 15‑948 to the utility expenditure line of the budget.

C.  The governing board may expend from the excess utility cost category only after it has expended for utility purposes the full amount budgeted in the utility expenditure line of the budget.

D.  The governing board, after notice is given and a public meeting is held as provided in section 15‑905, subsection D, may revise at any time before May 15 the amount budgeted in the excess utility cost category for the current year.  Not later than May 18, the budget as revised shall be submitted electronically to the superintendent of public instruction.

E.  If the revised excess utility cost category results in an expenditure of monies in excess of school district revenues for the current year, the county school superintendent shall include within the revenue estimate for the budget year monies necessary to meet the liabilities incurred by the school district in the current year in excess of revenues received for the current year.

F.  If a school district receives a refund of utility expenditures or a rebate on energy saving devices or services, the refund or rebate shall be applied against utility expenditures for the current year as a reduction of the expenditures, except that the reduction of expenditures shall not exceed the amount of actual utility expenditures.

G.  The governing board may budget for expenses of complying with or continuing to implement activities which were required or permitted by a court order of desegregation or administrative agreement with the United States department of education office for civil rights directed toward remediating alleged or proven racial discrimination which are specifically exempt in whole or in part from the revenue control limit and the capital outlay revenue limit district additional assistance.  This exemption applies only to expenses incurred for activities which are begun before the termination of the court order or administrative agreement.  If a district is levying a primary property tax on February 23, 2006 and using those monies to administer an English language learner program to remedy alleged or proven discrimination under title VI of the civil rights act of 1964 (42 United States Code section 2000d), the district may spend those monies to remedy a violation of the equal education act of 1974 (20 United States Code section 1703(f)).  Nothing in this subsection allows a school district to levy a primary property tax for violations of the equal education act of 1974 (20 United States Code section 1703(f)) in the absence of an alleged or proven discrimination under title VI of the civil rights act of 1964 (42 United States Code section 2000d).

H.  If a governing board chooses to budget monies outside of the revenue control limit as provided in subsection G of this section, the governing board may do one of the following:

1.  Use monies from the maintenance and operation fund equal to any excess desegregation or compliance expenses beyond the revenue control limit before June 30 of the current year.

2.  Notify the county school superintendent to include the cost of the excess expenses in the county school superintendent's estimate of the additional amount needed for the school district from the primary property tax as provided in section 15‑991.

3.  Employ the provisions of both paragraphs 1 and 2 of this subsection, provided that the total amount transferred and included in the amount needed from property taxes does not exceed the total amount budgeted as prescribed in subsection J, paragraph 1 of this section.

I.  Through fiscal year 2003‑2004, the maximum amount which a governing board may budget outside of the capital outlay revenue limit as provided in subsection G of this section is twelve per cent of the maintenance and operation desegregation budget as provided in subsection J of this section or the amount that it budgeted pursuant to this subsection for fiscal year 2001‑2002, whichever is less.  If a governing board chooses to budget monies outside of the capital outlay revenue limit district additional assistance as provided in subsection G of this section, the governing board may notify the county school superintendent to include the cost of the excess expenses in the county school superintendent's estimate of the additional amount needed for the school district from the primary property tax as provided in section 15‑991.

J.  A governing board using subsections G, H and I of this section:

1.  Shall prepare and employ a separate maintenance and operation desegregation budget and capital outlay desegregation budget on a form prescribed by the superintendent of public instruction in conjunction with the auditor general.  The budget format shall be designed to allow a school district to plan and provide in detail for expenditures to be incurred solely as a result of compliance with or continuing to implement activities which were required or permitted by a court order of desegregation or administrative agreement with the United States department of education office for civil rights directed toward remediating alleged or proven racial discrimination.

2.  Shall prepare as a part of the annual financial report a detailed report of expenditures incurred solely as a result of compliance with or continuing to implement activities which were required or permitted by a court order of desegregation or administrative agreement with the United States department of education office for civil rights directed toward remediating alleged or proven racial discrimination, in a format prescribed by the auditor general in conjunction with the Arizona department of education as provided by section 15‑904.

3.  On or before July 15, 2006 and each year thereafter, shall collect and report data regarding activities related to a court order of desegregation or an administrative agreement with the United States department of education office for civil rights directed toward remediating alleged or proven racial discrimination in a format prescribed by the Arizona department of education.  The department shall compile and submit copies of the reports to the governor, the president of the senate, the speaker of the house of representatives and the chairpersons of the education committees of the senate and the house of representatives.  A school district that becomes subject to a new court order of desegregation or a party to an administrative agreement with the United States department of education office for civil rights directed toward remediating alleged or proven racial discrimination shall submit these reports on or before July 15 or within ninety days of the date of the court order or administrative agreement, whichever occurs first. The Arizona department of education, in consultation with the auditor general, shall develop reporting requirements to ensure that school districts submit at least the following information and documentation to the Arizona department of education beginning in fiscal year 2006‑2007:

(a)  A district-wide budget summary and a budget summary on a school by school basis for each school in the school district that lists the sources and uses of monies that are designated for desegregation purposes.

(b)  A detailed list of desegregation activities on a district-wide basis and on a school by school basis for each school in the school district.

(c)  The date that the school district was determined to be out of compliance with title VI of the civil rights act of 1964 (42 United States Code section 2000d) and the basis for that determination.

(d)  The initial date that the school district began to levy property taxes to provide funding for desegregation expenses and any dates that these property tax levies were increased.

(e)  If applicable, a current and accurate description of all magnet type programs that are in operation pursuant to the court order during the current school year on a district-wide basis and on a school by school basis. This information shall contain the eligibility and attendance criteria of each magnet type program, the capacity of each magnet type program, the ethnic composition goals of each magnet type program, the actual attending ethnic composition of each magnet type program and the specific activities offered in each magnet type program.

(f)  The number of pupils who participate in desegregation activities on a district-wide basis and on a school by school basis for each school in the school district.

(g)  A detailed summary of the academic achievement of pupils on a district-wide basis and on a school by school basis for each school in the school district.

(h)  The number of employees, including teachers and administrative personnel, on a district-wide basis and on a school by school basis for each school in the school district that is necessary to conduct desegregation activities.

(i)  The number of employees, including teachers and administrative personnel, on a district-wide basis and on a school by school basis for each school in the school district and the number of employees at school district administrative offices that are funded in whole or in part with desegregation monies received pursuant to this section.

(j)  The amount of monies that is not derived through a primary or secondary property tax levy and that is budgeted and spent on desegregation activities on a district-wide basis and on a school by school basis for each school in the school district.

(k)  Verification that the desegregation funding will supplement and not supplant funding for other academic and extracurricular activities.

(l)  Verification that the desegregation funding is educationally justifiable.

(m)  Any documentation that supports the proposition that the requested desegregation funding is intended to result in equal education opportunities for all pupils in the school district.

(n)  Verification that the desegregation funding will be used to promote systemic and organizational changes within the school district.

(o)  Verification that the desegregation funding will be used in accordance with the academic standards adopted by the state board of education pursuant to sections 15‑701 and 15‑701.01.

(p)  Verification that the desegregation funding will be used to accomplish specific actions to remediate proven discrimination pursuant to title VI of the civil rights act of 1964 (42 United States Code section 2000d) as specified in the court order or administrative agreement.

(q)  An evaluation by the school district of the effectiveness of the school district's desegregation measures.

(r)  An estimate of when the school district will be in compliance with the court order or administrative agreement and a detailed account of the steps that the school district will take to achieve compliance.

(s)  Any other information that the department of education deems necessary to carry out the purposes of this paragraph.

K.  If a school district governing board budgets for expenses of complying with a court order of desegregation or an administrative agreement with the United States department of education office for civil rights directed toward remediating alleged or proven racial discrimination, the governing board shall ensure that the desegregation expenses will:

1.  Be educationally justifiable.

2.  Result in equal education opportunities for all pupils in the school district.

3.  Be used to promote systemic and organizational changes within the school district.

4.  Be used in accordance with the academic standards adopted by the state board of education pursuant to sections 15‑701 and 15‑701.01.

5.  Be used to accomplish specific actions to remediate proven discrimination pursuant to title VI of the civil rights act of 1964 (42 United States Code section 2000d) as specified in the court order or administrative agreement.

6.  Be used in accordance with a plan submitted to the department of education that includes an estimate of the amount of monies that will be required to bring the school district into compliance with the court order or administrative agreement and an estimate of when the school district will be in compliance with the court order or administrative agreement.

7.  Beginning in fiscal year 2009‑2010 and continuing each fiscal year thereafter, not exceed the amount budgeted by the school district for desegregation expenses in fiscal year 2008‑2009.

L.  The governing board may budget for the bond issues portion of the cost of tuition charged the district as provided in section 15‑824 for the pupils attending school in another school district, except that if the district is a common school district not within a high school district, the district may only include that part of tuition which is excluded from the revenue control limit and district support level as provided in section 15‑951.  The bond issues portion of the cost of tuition charged is specifically exempt from the revenue control limit of the school district of residence, and the primary property tax rate set to fund this amount shall not be included in the computation of additional state aid for education as provided in section 15‑972, except as provided in section 15‑972, subsection E.  The department of education and the auditor general shall include in the maintenance and operation section of the budget format, as provided in section 15‑903, a separate category for the bond issues portion of the cost of tuition.

M.  The governing board may budget for interest expenses it incurred for registering warrants drawn against a fund of the school district or net interest expense on tax anticipation notes as prescribed in section 35‑465.05, subsection C for the fiscal year preceding the current year if the county treasurer pooled all school district monies for investment as provided in section 15‑996 for the fiscal year preceding the current year and, in those school districts that receive state aid, the school districts applied for an apportionment of state aid before the date set for the apportionment as provided in section 15‑973 for the fiscal year preceding the current year. The governing board may budget an amount for interest expenses for registering warrants or issuing tax anticipation notes equal to or less than the amount of the warrant interest expense or net interest expense on tax anticipation notes as prescribed in section 35‑465.05, subsection C for the fiscal year preceding the current year as provided in this subsection which is specifically exempt from the revenue control limit.  For the purposes of this subsection, "state aid" means state aid as determined in sections 15‑971 and 15‑972. END_STATUTE

Sec. 22.  Title 15, chapter 9, article 1, Arizona Revised Statutes, is amended by adding section 15-917, to read:

START_STATUTE15-917.  Performance incentive fund; eligibility; use of monies

A.  The performance incentive fund is established consisting of legislative appropriations for school district and charter holder performance funding.  The department of education shall administer the fund.  Monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.  Beginning in fiscal year 2014-2015, the department of education shall distribute monies in the fund to school districts and charter holders based on achievement and improvement on the assigned achievement profile pursuant to section 15-241.

B.  The performance funding amount shall be budgeted in the separate subsections of the maintenance and operations and capital outlay sections of the budget using forms prescribed by the auditor general in conjunction with the department of education.  The unexpended budget balance in the performance funding subsections of the budget may be carried forward to the following fiscal years and shall not be included in the allowable budget balance carryforward calculated pursuant to section 15-943.01.

C.  A school district or charter holder is eligible for monies from the performance incentive fund only if the school district or charter holder was assigned an achievement profile pursuant to section 15-241, subsection H, as developed in accordance with the requirements established in section 15‑241, subsection G.  School districts or charter holders that are assigned a parallel achievement profile pursuant to section 15-241, subsection J are not eligible for monies from the performance incentive fund."

Renumber to conform

Page 21, between lines 32 and 33, insert:

"Sec. 24.  Section 15-947, Arizona Revised Statutes, is amended to read:

START_STATUTE15-947.  Revenue control limit; district support level; general budget limit; unrestricted total capital budget limit; district additional assistance limit

A.  The revenue control limit for a school district is equal to the sum of the base revenue control limit determined in section 15‑944 and the transportation revenue control limit determined in section 15‑946.

B.  The district support level for a school district is equal to the sum of the base support level determined in section 15‑943 and the transportation support level determined in section 15‑945.

C.  The general budget limit for each school district, for each fiscal year, is the sum of the following:

1.  The maintenance and operations portion of the revenue control limit for the budget year.

2.  The maintenance and operation portion of the following amounts:

(a)  Amounts that are fully funded by revenues other than a levy of taxes upon the taxable property within the school district, as listed below:

(i)  Amounts budgeted as the budget balance carryforward as provided in section 15‑943.01.

(ii)  Tuition revenues for attendance of nonresident pupils.

(iii)  State assistance as provided in section 15‑976.

(iv)  Special education revenues as provided in section 15‑825, subsection D and section 15‑1204.

(v)  Title VIII of the elementary and secondary education act of 1965 assistance determined for children with disabilities, children with specific learning disabilities, children residing on Indian lands and children residing within the boundaries of an accommodation school that is located on a military reservation and that is classified as a heavily impacted local educational agency pursuant to 20 United States Code section 7703 as provided in section 15‑905, subsections K and O.

(vi)  Title VIII of the elementary and secondary education act of 1965 administrative costs as provided in section 15‑905, subsection P.

(vii)  State assistance for excess tuition as provided in section 15‑825.01.

(viii)  Amounts received from the state board of education pursuant to section 15‑973.01.

(ix)  Transportation revenues for attendance of nonresident pupils.

(b)  Amounts approved pursuant to an override election as provided in section 15‑481 for the applicable fiscal year.

(c)  Expenditures for excess utility costs as provided in section 15‑910.

(d)  Amounts authorized by the county school superintendent pursuant to section 15‑974, subsection B.

(e)  Expenditures for complying with a court order of desegregation as provided in section 15‑910.

(f)  Expenditures for the bond issues portion of the cost of tuition as provided in section 15‑910.

(g)  Interest on registered warrants or tax anticipation notes as provided in section 15‑910.

(h)  Amounts budgeted for a jointly owned and operated career and technical education and vocational education center as provided in section 15‑910.01.

3.  The maintenance and operations portion of the capital outlay revenue limit district additional assistance for the budget year.

4.  Any other budget item that is budgeted in the maintenance and operation section of the budget and that is specifically exempt from the revenue control limit or the capital outlay revenue limit district additional assistance.

D.  The unrestricted capital budget limit, for each school district for each fiscal year, is the sum of the following:

1.  The federal impact adjustment as determined in section 15‑964 for the budget year.

2.  Any other budget item that is budgeted in the capital outlay section of the budget and that is specifically exempt from the capital outlay revenue limit district additional assistance.

3.  The unrestricted capital portion of the amounts contained in subsection C of this section.

4.  The unexpended budget balance in the unrestricted capital outlay fund from the previous fiscal year.

5.  The net interest earned in the unrestricted capital outlay fund the previous fiscal year.

6.  The budgeted amount as approved and determined pursuant to section 15‑962, subsection F.

E.  The soft capital allocation limit for each school district for each fiscal year is the sum of the following:

1.  The soft capital allocation for the budget year.

2.  The unexpended budget balance in the soft capital allocation fund from the previous fiscal year.

3.  The net interest earned in the soft capital allocation fund the previous fiscal year. END_STATUTE

Sec. 25.  Section 15-947.01, Arizona Revised Statutes, is amended to read:

START_STATUTE15-947.01.  Revenue control limit; general budget limit; total capital budget limit for joint technical education districts

A.  The revenue control limit for a joint technical education district is equal to the base support level determined in section 15‑943.02.

B.  The general budget limit for each joint technical education district, for each fiscal year, is the sum of the following:

1.  The revenue control limit for the budget year.

2.  The capital outlay revenue limit District additional assistance for the budget year.

3.  Tuition revenues for attendance of nonresident pupils.

4.  Title VIII of the elementary and secondary education act of 1965 assistance determined for children with disabilities, children with specific learning disabilities and children residing on Indian lands as provided in section 15‑905, subsections K and O.

5.  Expenditures for excess utility costs as provided in section 15‑910.

C.  The unrestricted capital budget limit for each joint technical education district for the budget year is as provided in section 15‑947, subsection D.

D.  The soft capital allocation limit for each joint technical education district for the budget year is as provided in section 15‑947, subsection E. END_STATUTE

Sec. 26.  Section 15-951, Arizona Revised Statutes, is amended to read:

START_STATUTE15-951.  District additional assistance, district support level and student count for a common school district not within a high school district

A.  Notwithstanding section 15‑947, the revenue control limit for a common school district not within a high school district is the sum of the following:

1.  The base revenue control limit computed as prescribed in section 15‑944 but excluding pupils admitted to another school district as provided in section 15‑824, subsection A, paragraph 2.

2.  The tuition payable for high school pupils who attend school in another school district as provided in section 15‑824, subsection A, paragraph 2, including any transportation charge, except as provided in subsection H  F of this section.

3.  The transportation revenue control limit for all pupils who reside in the district except those high school pupils transported by another district.

B.  Notwithstanding subsection A of this section, for the purposes of sections 15‑481, 15‑482 and 15‑1102, the revenue control limit for a common school district not within a high school district is the sum of the following:

1.  The base revenue control limit for pupils computed as prescribed in section 15‑944 but excluding pupils admitted to another school district as provided in section 15‑824, subsection A, paragraph 2.

2.  The transportation revenue control limit for all pupils who reside in the district except those high school pupils transported by another district.

C.  Notwithstanding section 15‑961, the capital outlay revenue limit district additional assistance for a common school district not within a high school district is the capital outlay revenue limit computed district additional assistance as prescribed in section 15‑961 but excluding pupils who are admitted to another school district as provided in section 15‑824, subsection A, paragraph 2, except that if the school district transports high school pupils, the district additional assistance amount prescribed in section 15‑961 shall be increased by an amount equal to fifty per cent of the district additional assistance per pupil amount prescribed for the school district pursuant to section 15‑961 multiplied by the number of high school pupils transported.

D.  Notwithstanding section 15‑962, the soft capital allocation for a common school district not within a high school district is the soft capital allocation computed as prescribed in section 15‑962 but excluding pupils who are both admitted to another school district as provided in section 15‑824, subsection A, paragraph 2 and not transported by the common school district.

E.  D.  Notwithstanding section 15‑947, the district support level for a common school district not within a high school district is the sum of the following:

1.  The base support level computed as prescribed in section 15‑943 but excluding pupils who are admitted to another school district as provided in section 15‑824, subsection A, paragraph 2.

2.  The tuition payable for high school pupils who are admitted to another school district as provided in section 15‑824, subsection A, paragraph 2, including any transportation charge, except as provided in subsection H  F of this section.

3.  The transportation support level for all pupils who reside in the school district except those high school pupils transported by another school district.

F.  E.  For the purpose of determining eligibility to increase the revenue control limit and district support level or recompute the revenue control limit as provided in section 15‑948, the student count for a common school district not within a high school district is the student count for pupils in kindergarten programs and grades one through twelve, including pupils enrolled in another school district as provided in section 15‑824, subsection A, paragraph 2.

G.  F.  The tuition amount in subsections A and E  D of this section shall not include amounts per student count for bond issues as prescribed by section 15‑824, subsection G, paragraph 1, subdivision (c) in excess of the following:

1.  One hundred fifty dollars if the pupil's school district of residence pays tuition for seven hundred fifty or fewer pupils to other school districts.

2.  Two hundred dollars if the pupil's school district of residence pays tuition for one thousand or fewer, but more than seven hundred fifty pupils to other school districts.

3.  The actual cost per student count if the pupil's school district of residence pays tuition for more than one thousand pupils to other school districts." END_STATUTE

Renumber to conform

Page 21, lines 39 and 40, strike "five hundred seven dollars sixty‑four cents" insert "five hundred forty‑four dollars fifty‑eight cents"

Lines 42 and 43, strike "three hundred sixty‑two dollars eighty‑four cents" insert "three hundred eighty‑nine dollars twenty‑five cents"

Page 22, lines 3 and 4, strike "four hundred twenty dollars eighteen cents" insert "four hundred fifty dollars seventy‑six cents"

Line 7, strike "six hundred thirteen dollars ten cents" insert "six hundred one dollars twenty‑four cents"

Line 10, strike "three hundred ninety‑three dollars twenty‑five cents" insert "four hundred five dollars fifty‑nine cents"

Line 15, strike "four hundred ninety‑eight dollars sixty‑nine cents" insert "four hundred ninety‑two dollars ninety‑four cents"

Lines 17 and 18, strike "four hundred twenty dollars eighteen cents" insert "four hundred fifty dollars seventy‑six cents"

Line 36, after "by" insert "fifty per cent of"

Lines 43 and 44, strike "sixty‑nine dollars sixty‑eight cents one hundred twenty‑nine dollars sixty‑nine cents" insert "sixty‑nine dollars sixty‑eight cents"

Page 23, between lines 24 and 25, insert:

"Sec. 30.  Section 15-963, Arizona Revised Statutes, is amended to read:

START_STATUTE15-963.  Capital transportation adjustment for small school districts

A.  A school district may apply to the state board of education for  a capital transportation adjustment for the purchase of a transportation vehicle if the district meets all of the following requirements:

1.  Has a student count of fewer than six hundred in kindergarten programs and grades one through twelve.

2.  Transports as eligible students at least one‑third of the total student count of the school district.

3.  Has an approved daily route mileage per eligible student transported of more than 1.0, computed as prescribed in section 15‑945, subsection A, paragraph 4.

B.  If a school district receives a capital transportation adjustment as provided in this section, the soft capital allocation limit district additional assistance for that district shall be equal to the capital levy revenue limit or the soft capital allocation limit district additional assistance determined as prescribed in section 15‑962 15‑961 plus any additional amount approved by the state board of education.

C.  The state board of education may grant a capital transportation adjustment to a school district which meets the qualifications prescribed in subsection A of this section, except that the total amount of all additional amounts approved as capital transportation adjustments for all school districts for a fiscal year shall not exceed twenty per cent of the total amount which a county may budget for that fiscal year in all small district service program funds as provided in section 15‑365, subsection F.END_STATUTE

Sec. 31.  Section 15-964, Arizona Revised Statutes, is amended to read:

START_STATUTE15-964.  Federal impact adjustment

A.  The governing board of a school district may compute a federal impact adjustment to the unrestricted capital budget limit.  The maximum amount of the federal impact adjustment is the sum of the following:

1.  Twenty‑five per cent of the monies received from forest reserve funds by the school district in the prior fiscal year as provided in section 41‑736.

2.  For a school district that is not an accommodation school, the lesser of:

(a)  Twenty‑five per cent of the title VIII of the elementary and secondary education act of 1965 revenues received in the prior fiscal year.

(b)  The total amount of title VIII of the elementary and secondary education act of 1965 revenues received in the prior fiscal year minus the sum of the following:

(i)  The amount of title VIII of the elementary and secondary education act of 1965 assistance used to increase the general budget limit as provided in section 15‑905, subsections K and O for the prior fiscal year.

(ii)  The amount budgeted for title VIII of the elementary and secondary education act of 1965 administrative costs as provided in section 15‑905, subsection P for the current year.

(iii)  The amount budgeted for principal and interest on impact aid revenue bonds pursuant to section 15‑2104 for the current year.

B.  The federal impact adjustment shall only be budgeted and expended for new construction, major renovation of buildings or soft capital expenditures that may be budgeted in the unrestricted capital fund.

C.  The governing board may not compute a federal impact adjustment for any year in which it budgets as provided in section 15‑962, subsection F.

D.  C.  If the governing board underestimated the amount of the federal impact adjustment for the current year, the board may adjust the unrestricted capital budget limit and the budget before May 15.  If the board overestimated the amount of the federal impact adjustment for the current year, the board shall adjust the unrestricted capital budget limit and the budget before May 15.  Not later than May 18, the budget as revised shall be submitted electronically to the superintendent of public instruction. END_STATUTE

Sec. 32.  Section 15-971, Arizona Revised Statutes, is amended to read:

START_STATUTE15-971.  Determination of equalization assistance payments from county and state funds for school districts

A.  Equalization assistance for education is computed by determining the total of the following:

1.  The lesser of a school district's revenue control limit or district support level as determined in section 15‑947 or 15‑951.

2.  The capital outlay revenue limit District additional assistance of a school district as determined in section 15‑951 or 15‑961.

3.  The soft capital allocation of a school district as determined in section 15‑951 or 15‑962.

B.  From the total of the amounts determined in subsection A of this section subtract:

1.  The amount that would be produced by levying the applicable qualifying tax rate determined pursuant to section 41‑1276 for a high school district or a common school district within a high school district that does not offer instruction in high school subjects as provided in section 15‑447.

2.  The amount that would be produced by levying the applicable qualifying tax rate determined pursuant to section 41‑1276 for a unified school district, a common school district not within a high school district or a common school district within a high school district that offers instruction in high school subjects as provided in section 15‑447.  The qualifying tax rate shall be applied in the following manner:

(a)  For the purposes of the amount determined in subsection A, paragraph 1 of this section:

(i)  Determine separately the percentage that the weighted student count in preschool programs for children with disabilities, kindergarten programs and grades one through eight and the weighted student count in grades nine through twelve is to the weighted student count determined in subtotal A as provided in section 15‑943, paragraph 2, subdivision (a).

(ii)  Apply the percentages determined in item (i) of this subdivision to the amount determined in subsection A, paragraph 1 of this section.

(b)  For the purposes of the amounts determined in subsection A, paragraphs paragraph 2 and 3 of this section, determine separately the amount of the capital outlay revenue limit and the amount of the soft capital allocation district additional assistance attributable to the student count in preschool programs for children with disabilities, kindergarten programs and grades one through eight and grades nine through twelve.

(c)  From the amounts determined in subdivisions (a) and (b) of this paragraph, subtract the levy that would be produced by the current qualifying tax rate for a high school district or a common school district within a high school district that does not offer instruction in high school subjects as provided in section 15‑447.  If the qualifying tax rate generates a levy that is in excess of the total determined in subsection A of this section, the school district shall not be eligible for equalization assistance.   For the purposes of this subsection, "assessed valuation" includes the values used to determine voluntary contributions collected pursuant to title 9, chapter 4, article 3 and title 48, chapter 1, article 8 and the assessed value of all property subject to the government property lease excise tax pursuant to title 42, chapter 6, article 5.

3.  The amount that would be produced by levying a qualifying tax rate in a joint technical education district, which shall be five cents per one hundred dollars assessed valuation unless the legislature sets a lower rate by law.

C.  County aid for equalization assistance for education shall be computed as follows:

1.  Determine the total equalization assistance for all school districts in the county as provided in subsections A and B of this section.

2.  Determine the total amount of state equalization assistance collected for all school districts in the county as provided in section 15‑994.

3.  Divide the amount determined in paragraph 2 of this subsection by the amount determined in paragraph 1 of this subsection.

4.  Multiply the amount determined in subsections A and B of this section by the quotient determined in paragraph 3 of this subsection for each school district.

5.  The amount determined in paragraph 4 of this subsection shall be the county aid for equalization assistance for education for a school district.

D.  State aid for equalization assistance for education for a school district shall be computed as follows:

1.  Determine the equalization assistance for education for a school district as provided in subsections A and B of this section.

2.  For each county, determine the levy that would be produced by the state equalization assistance property tax rate prescribed in section 15‑994, subsection A.

3.  Prorate the amount determined in paragraph 2 of this subsection to each school district in the county as prescribed by subsection C of this section.

4.  Subtract the amount determined in paragraph 3 of this subsection from the amount determined in paragraph 1 of this subsection.

E.  Equalization assistance for education shall be paid from appropriations for that purpose to the school districts as provided in section 15‑973.

F.  A school district shall report expenditures on approved career and technical education and vocational education programs in the annual financial report according to uniform guidelines prescribed by the uniform system of financial records and in order to facilitate compliance with sections 15‑255 and 15‑904.

G.  The additional weight for state aid purposes given to special education as provided in section 15‑943 shall be given to school districts only if special education programs comply with chapter 7, article 4 of this title and the conditions and standards prescribed by the superintendent of public instruction pursuant to rules of the state board of education for pupil identification and placement pursuant to sections 15‑766 and 15‑767.

H.  In addition to general fund appropriations, all amounts received pursuant to section 37‑521, subsection B, paragraph 3 and section 42‑5029, subsection E, paragraph 5 and from any other source for the purposes of this section are appropriated for state aid to schools as provided in this section.

I.  The total amount of state monies that may be spent in any fiscal year for state equalization assistance shall not exceed the amount appropriated or authorized by section 35‑173 for that purpose.  This section shall not be construed to impose a duty on an officer, agent or employee of this state to discharge a responsibility or to create any right in a person or group if the discharge or right would require an expenditure of state monies in excess of the expenditure authorized by legislative appropriation for that specific purpose. END_STATUTE

Sec. 33.  Section 15-974, Arizona Revised Statutes, is amended to read:

START_STATUTE15-974.  Equalization assistance for education for accommodation schools

A.  Equalization assistance for education for accommodation schools shall be paid from appropriations for that purpose to the school districts as provided in section 15‑973.

B.  When an accommodation school has a positive total cash balance at the end of a fiscal year in its maintenance and operation fund, the county school superintendent of the county in which the accommodation school is located may authorize an addition to the accommodation school's revenue control limit as provided in section 15‑947, subsection A for the following fiscal year.  The county school superintendent may not authorize an addition that exceeds the lesser of the ending cash balance less the amount budgeted for the budget balance carryforward as provided in section 15‑943.01 or ten per cent of the revenue control limit of the accommodation school and five per cent of the revenue control limit pursuant to section 15‑482, without the necessity of an election pursuant to section 15‑481.  If an accommodation school has a cash balance in excess of the amount needed to fund the budget balance carryforward, the addition authorized pursuant to this subsection and the items listed in section 15‑947, subsection C, paragraph 2, subdivisions (c) and (f) for the following fiscal year, the remaining cash balance may be used for capital expenditures pursuant to section 15‑962, subsection F.

C.  Subsection B of this section shall not apply to an accommodation school with a student count of one hundred twenty‑five or less in kindergarten programs and grades one through eight or to an accommodation school which offers instruction in grades nine, ten, eleven or twelve and which has a student count of one hundred or less in grades nine through twelve. END_STATUTE

Sec. 34.  Section 15-996, Arizona Revised Statutes, is amended to read:

START_STATUTE15-996.  Duties of county treasurer relating to school district's monies

The county treasurer shall:

1.  Receive and hold all school district monies and keep a separate account for each school district and for the special county school reserve fund.  The county treasurer may maintain separate accounts for each fund of a school district or the county treasurer may maintain only two accounts for each school district's monies in addition to the funds provided for in sections 15‑1024, 15‑1025, 15‑2021, 15‑2031 and 15‑2041.  If only two accounts are maintained, the first account shall consist of maintenance and operation, unrestricted capital outlay, soft capital allocation and adjacent ways monies and the classroom site fund prescribed in section 15‑977 and the second account shall consist of federal and state grant monies and all other monies.

2.  Pool school district monies for investment except as provided in sections 15‑1024 and 15‑1025.  Interest earned on the monies pooled for investment shall be apportioned at least quarterly to the appropriate school district based on an average monthly balance as prescribed in the uniform system of accounting for county treasurers as provided in section 41‑1279.21.

3.  Notwithstanding section 11‑605, register warrants only as follows:

(a)  If separate accounts are maintained for each fund, warrants may only be registered on the maintenance and operation, unrestricted capital outlay, soft capital allocation and adjacent ways accounts and the classroom site fund prescribed in section 15‑977 and only if the total cash balance of all three accounts is insufficient to pay the warrants, except that, during the period of time when a school district is under receivership pursuant to section 15-103, a warrant may be registered on the debt service account for which the cash balance in the debt service account is insufficient to cover the debt service payment if there are not sufficient monies in the debt service account to cover the debt.

(b)  If the county treasurer maintains only two accounts as provided in paragraph 1 of this section:

(i)  The county treasurer may register warrants only on the first account and only if the balance of that account is insufficient to pay the warrants.

(ii)  The county treasurer may honor warrants for any federal or state grant fund with a negative balance as long as the total balance in the second account is positive.  If the second account total balance is negative, the warrant for a federal or state grant fund shall be charged to the maintenance and operation fund.  Any interest charged to the federal or state grant fund as a result of a negative balance that is in excess of interest earned on the fund shall be transferred to the maintenance and operation fund at the end of the fiscal year or the end of the grant year.  If a federal or state grant fund has a negative balance at the end of the fiscal year or grant year, sufficient expenditures shall be transferred to the maintenance and operation fund to eliminate the negative balance.

4.  Notify the county school superintendent by the fifteenth day of each calendar month of the month end balances of each school district account.

5.  Pay warrants issued by the county school superintendent and duly endorsed by the person entitled to receive the monies.

6.  On each property tax bill and each property tax statement prepared, separately state and identify by name each school district's primary property tax rate, the secondary property tax rate that is associated with overrides, the secondary property tax rate that is associated with class A bonds and the secondary property tax rate that is associated with class B bonds.  For the purposes of this paragraph, "class A bonds" and "class B bonds" have the same meanings prescribed in section 15‑101. END_STATUTE

Sec. 35.  Section 15-1021, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1021.  Limitation on bonded indebtedness; limitation on authorization and issuance of bonds

A.  Until December 31, 1999, a school district may issue class A bonds for the purposes specified in this section and chapter 4, article 5 of this title to an amount in the aggregate, including the existing indebtedness, not exceeding fifteen per cent of the taxable property used for secondary property tax purposes, as determined pursuant to title 42, chapter 15, article 1, within a school district as ascertained by the last property tax assessment previous to issuing the bonds.

B.  From and after December 31, 1998, a school district may issue class B bonds for the purposes specified in this section and chapter 4, article 5 of this title to an amount in the aggregate, including the existing class B indebtedness, not exceeding five ten per cent of the taxable property used for secondary property tax purposes, as determined pursuant to title 42, chapter 15, article 1, within a school district as ascertained by the last assessment of state and county taxes previous to issuing the bonds, or one thousand five hundred dollars per student count pursuant to section 15‑901, subsection A, paragraph 13, whichever amount is greater.  A school district shall not issue class B bonds until the proceeds of any class A bonds issued by the school district have been obligated in contract.  The total amount of class A and class B bonds issued by a school district shall not exceed the debt limitations prescribed in article IX, section 8, Constitution of Arizona.

C.  Until December 31, 1999, a unified school district, as defined under article IX, section 8.1, Constitution of Arizona, may issue class A bonds for the purposes specified in this section and chapter 4, article 5 of this title to an amount in the aggregate, including the existing indebtedness, not exceeding thirty per cent of the taxable property used for secondary property tax purposes, as determined pursuant to title 42, chapter 15, article 1, within a unified school district as ascertained by the last property tax assessment previous to issuing the bonds.

D.  From and after December 31, 1998, a unified school district, as defined under article IX, section 8.1, Constitution of Arizona, may issue class B bonds for the purposes specified in this section and chapter 4, article 5 of this title to an amount in the aggregate, including the existing class B indebtedness, not exceeding ten twenty per cent of the taxable property used for secondary tax purposes, as determined pursuant to title 42, chapter 15, article 1, within a school district as ascertained by the last assessment of state and county taxes previous to issuing the bonds, or one thousand five hundred dollars per student count pursuant to section 15‑901, subsection A, paragraph 13, whichever amount is greater.  A unified school district shall not issue class B bonds until the proceeds of any class A bonds issued by the unified school district have been obligated in contract. The total amount of class A and class B bonds issued by a unified school district shall not exceed the debt limitations prescribed in article IX, section 8.1, Constitution of Arizona.

E.  No bonds authorized to be issued by an election held after July 1, 1980 and before November 24, 2009 may be issued more than six years after the date of the election, except that the time period may be extended to ten years pursuant to an election conducted pursuant to section 15‑491, subsection A, paragraph 6 and except that class A bonds shall not be issued after December 31, 1999.  No bonds authorized to be issued by an election held after November 24, 2009 may be issued more than ten years after the date of the election.

F.  Except as provided in section 15‑491, subsection A, paragraph 3, bond proceeds shall not be expended for items whose useful life is less than the average life of the bonds issued, except that bond proceeds shall not be expended for items whose useful life is less than five years.

G.  A joint technical education district shall not spend class B bond proceeds to construct or renovate a facility located on the campus of a school in a school district that participates in the joint district unless the facility is only used to provide career and technical education and is available to all pupils who live within the joint technical education district.  If the facility is not owned by the joint technical education district, an intergovernmental agreement or a written contract shall be executed for ten years or the duration of the bonded indebtedness, whichever is greater.  The intergovernmental agreement or written contract shall include provisions:

1.  That preserve the usage of the facility renovated or constructed, or both, only for career and technology programs operated by the joint technical education district.

2.  That include the process to be used by the participating district to compensate the joint technical education district in the event that the facility is no longer used only for career and technical education programs offered by the joint technical education district during the life of the bond.

H.  A school district shall not authorize, issue or sell bonds pursuant to this section if the school district has any existing indebtedness from impact aid revenue bonds pursuant to chapter 16, article 8 of this title, except for bonds issued to refund any bonds issued by the governing board. END_STATUTE

Sec. 36.  Section 15-1371, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1371.  Equalization assistance for state educational system for committed youth; state education fund for committed youth

A.  The superintendent of the state educational system for committed youth shall calculate a base support level as prescribed in section 15‑943 and a capital outlay revenue limit district additional assistance as prescribed in section 15‑961 for the educational system established pursuant to section 41‑2831, except that:

1.  Notwithstanding section 15‑901:

(a)  The student count shall be determined using the following definitions:

(i)  "Daily attendance" means days in which a pupil attends an educational program for a minimum of two hundred forty minutes not including meal and recess periods.  Attendance for one hundred twenty or more minutes but fewer than two hundred forty minutes shall be counted as one‑half day's attendance.

(ii)  "Fractional student" means a pupil enrolled in an educational program of one hundred twenty or more minutes but fewer than two hundred forty minutes a day not including meal and recess periods.  A fractional student shall be counted as one‑half of a full‑time student.

(iii)  "Full‑time student" means a pupil enrolled in an educational program for a minimum of two hundred forty minutes a day not including meal and recess periods.

(b)  "Seriously emotionally disabled pupils enrolled in a school district program as provided in section 15‑765" includes seriously emotionally disabled pupils enrolled in the department of juvenile corrections school system.

2.  All pupils shall be counted as if they were enrolled in grades nine through twelve.

3.  The teacher experience index is 1.00.

4.  The base support level shall be calculated using the base level multiplied by 1.0, except that the state educational system for committed youth is also eligible beginning with fiscal year 1992‑1993 for additional teacher compensation monies as specified in section 15‑952.

5.  Section 15‑943, paragraph 1 does not apply.

B.  The superintendent may use sections 15‑855 and 15‑948 in making the calculations prescribed in subsection A of this section, except that for the 1992‑1993 fiscal year rapid decline shall not be used.  The superintendent of the system and the department of education shall prescribe procedures for determining average daily membership.

C.  Equalization assistance for the state educational system for committed youth for the budget year is determined by adding the amount of the base support level and the capital outlay revenue limit district additional assistance for the budget year calculated as prescribed in subsection A of this section.

D.  The state educational system for committed youth shall not receive twenty‑five per cent of the equalization assistance unless it is accredited by the north central association of colleges and secondary schools.

E.  The state education fund for committed youth is established.  Fund monies shall be used for the purposes of the state educational system for committed youth, and notwithstanding section 35‑173, monies appropriated to the fund shall not be transferred to or used for any program not within the state educational system for committed youth.  State equalization assistance for the state educational system for committed youth as determined in subsection A of this section, other state and federal monies received from the department of education for the state educational system for committed youth and monies appropriated for the state educational system for committed youth, except monies appropriated pursuant to subsection F of this section, shall be deposited in the fund.  The state treasurer shall maintain separate accounts for fund monies if the separate accounts are required by statute or federal law.

F.  The department of juvenile corrections may seek appropriations for capital needs for land, buildings and improvements, including repairs and maintenance, required to maintain the state educational system for committed youth.

G.  The state board of education shall apportion state aid and deposit it, pursuant to sections 35‑146 and 35‑147, in the state education fund for committed youth in an amount as determined by subsection A of this section.  The apportionments shall be as follows:

1.  On July 1, one‑third of the total amount to be apportioned during the fiscal year.

2.  On October 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

3.  On December 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

4.  On January 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

5.  On February 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

6.  On March 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

7.  On April 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

8.  On May 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

9.  On June 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

H.  In conjunction with the department of administration, the superintendent of the state educational system for committed youth shall establish procedures to account for the receipt and expenditure of state education fund for committed youth monies by modifying the current accounting system used for state agencies as necessary. END_STATUTE

Sec. 37.  Section 15-1372, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1372.  Equalization assistance for state educational system for persons in the state department of corrections; fund

A.  The state department of corrections shall provide educational services for pupils who are under the age of eighteen years and pupils with disabilities who are age twenty‑one or younger who are committed to the state department of corrections.  The department of education shall provide technical assistance to the state department of corrections on request and shall assist the state department of corrections in establishing program and personnel standards.

B.  The state education fund for correctional education is established. Subject to legislative appropriation, fund monies shall be used for the purposes of providing education to pupils as specified in subsection A of this section.  Notwithstanding section 35‑173, monies appropriated to the fund shall not be transferred to or used for any program not directly related to the educational services required by this section.  State equalization assistance, other state and federal monies received from the department of education for which the pupils in correctional education programs qualify and monies appropriated for correctional education except monies appropriated pursuant to subsection C of this section shall be deposited in the fund.  The state treasurer shall maintain separate accounts for fund monies if the separate accounts are required by statute or federal law.

C.  The state department of corrections may seek appropriations for capital needs for land, buildings and improvements, including repairs and maintenance, required to maintain the educational services required by this section.

D.  The state board of education shall apportion state aid and deposit it, pursuant to sections 35‑146 and 35‑147, in the state education fund for correctional education in an amount as determined by subsection E of this section.  The apportionments are as follows:

1.  On July 1, one‑third of the total amount to be apportioned during the fiscal year.

2.  On October 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

3.  On December 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

4.  On January 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

5.  On February 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

6.  On March 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

7.  On April 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

8.  On May 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

9.  On June 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

E.  The director of the state department of corrections shall calculate a base support level as prescribed in section 15‑943 and a capital outlay revenue limit district additional assistance as prescribed in section 15‑961 for the educational services required by this section, except that:

1.  Notwithstanding section 15‑901, the student count shall be determined using the following definitions:

(a)  "Daily attendance" means days in which a pupil attends an educational program for a minimum of one hundred eighty minutes not including meal and recess periods.  Attendance for ninety or more minutes but fewer than one hundred eighty minutes shall be counted as one‑half day's attendance.

(b)  "Fractional student" means a pupil enrolled in an educational program of ninety or more minutes but fewer than one hundred eighty minutes per day not including meal and recess periods.  A fractional student shall be counted as one‑half of a full‑time student.

(c)  "Full‑time student" means a pupil enrolled in an educational program for a minimum of one hundred eighty minutes per day not including meal and recess periods.

(d)  "Pupil with a disability" has the same meaning as child with a disability prescribed in section 15‑761.

2.  All pupils shall be counted as if they were enrolled in grades nine through twelve.

3.  The teacher experience index is 1.00.

4.  The calculation for additional teacher compensation monies as prescribed in section 15‑952 is available.

5.  Section 15‑943, paragraph 1 does not apply.

6.  The base support level and capital outlay amounts calculated pursuant to this section shall be multiplied by 0.67.

7.  The school year shall consist of a period of not less than two hundred eight days.

F.  The director of the state department of corrections may use sections 15‑855 and 15‑948 in making the calculations prescribed in subsection E of this section.  The director of the state department of corrections and the department of education shall prescribe procedures for calculating average daily membership.

G.  Equalization assistance for correctional education programs provided for those pupils specified in subsection A of this section is determined by adding the amount of the base support level and the capital outlay revenue limit district additional assistance for the budget year calculated as prescribed in subsection E of this section.

H.  The director of the state department of corrections shall keep records and provide information as the department of education requires to determine the appropriate amount of equalization assistance.  Equalization assistance shall be used to provide educational services in this section.

I.  The department of education and the state department of corrections shall enter into an intergovernmental agreement that establishes the necessary accountability between the two departments regarding the administrative and funding requirements contained in subsections A and B of this section.  The agreement shall:

1.  Provide for appropriate education to all committed youths as required by state and federal law.

2.  Provide financial information to meet requirements for equalization assistance.

3.  Provide for appropriate pupil intake and assessment procedures.

4.  Require pupil performance assessment and the reporting of results." END_STATUTE

Renumber to conform 

Page 23, line 40, strike "October 15" insert "September 1"

Page 29, between lines 6 and 7, insert:

"Sec. 39.  Section 15-2004, Arizona Revised Statutes, is amended to read:

START_STATUTE15-2004.  School facilities board lease‑to‑own; fund; expiration

A.  In order to fulfill the requirements of section 15‑2041, the school facilities board may acquire school facilities for the use of one or more school districts by entering into one or more lease‑to‑own transactions in accordance with this section.  For purposes of this section, providing school facilities includes land acquisition, related infrastructure, fixtures, furnishings, equipment and costs of the lease‑to‑own transaction.  The school facilities board may provide monies to provide school facilities in part pursuant to section 15‑2041 and in part through a lease‑to‑own transaction.

B.  A lease‑to‑own transaction may provide for:

1.  The ground lease of the land for the facilities to a private entity for the term of the lease‑to‑own transaction or for a term of up to one and one‑half times the term of the lease‑to‑own transaction, subject to earlier termination on completion of performance of the lease‑to‑own agreement.  The ground lessor may either be the school district or the school facilities board, whichever holds title to the land.

2.  The lease of the completed school facilities by a private entity to the school facilities board for an extended term of years pursuant to a lease‑to‑own agreement.

3.  The sublease of the completed school facilities by the school facilities board to the school district during the term of the lease‑to‑own agreement.  The sublease shall provide for the use, maintenance and operation of the school facilities by the school district and for the transfer of ownership of the school facilities to the school district on completion of performance of the lease‑to‑own agreement.

4.  The option for the school facilities board’s purchase of the school facilities and transfer of ownership of the school facilities to the school district before the expiration of the lease‑to‑own agreement.

5.  The services of trustees, financial advisors, paying agents, transfer agents, underwriters, lawyers and other professional service providers, credit enhancements or liquidity facilities and all other services considered necessary by the school facilities board in connection with the lease‑to‑own transaction, and related agreements and arrangements including arrangements for the creation and sale of certificates of participation evidencing proportionate interests in the lease payments to be made by the school facilities board pursuant to the lease‑to‑own agreement.

C.  The sublease of the school facilities to the school district is subject to this section and to the provisions of the lease‑to‑own agreement. Neither a ground lease by the school district as lessor nor a sublease of the school facilities to the school district is required to be authorized by a vote of the school district electors.  A ground lease is not subject to any limitations or requirements applicable to leases or lease‑purchase agreements pursuant to section 15‑342 or any other section of this title.

D.  Any school facility that is constructed through a lease‑to‑own agreement shall meet the minimum building adequacy standards set forth in section 15‑2011.

E.  School districts may use local monies to exceed the minimum adequacy standards and to build athletic fields and any other capital project for leased‑to‑own facilities.

F.  The school facilities board shall include any square footage of new school facilities constructed through lease‑to‑own agreements in the computations prescribed in section 15‑2011.

G.  Pursuant to section 15‑2031, a school district is eligible to receive building renewal monies for any facility constructed through a lease‑to‑own agreement.  If a facility's building maintenance renewal is included in the lease‑to‑own agreement, the facility shall not be included in the district's building renewal calculation.

H.  G.  A lease‑to‑own fund is established consisting of monies appropriated by the legislature.  The school facilities board shall administer the fund and distribute monies in the fund to make payments pursuant to lease‑to‑own agreements entered into by the school facilities board pursuant to this section, to make payments to or for the benefit of school districts pursuant to local lease‑to‑own agreements entered into by school districts pursuant to section 15‑2005 and to pay costs considered necessary by the school facilities board in connection with lease‑to‑own transactions and local lease‑to‑own transactions.  Payments by the school facilities board pursuant to a lease‑to‑own agreement or local lease‑to‑own agreement shall be made only from the lease‑to‑own fund.  On notice from the school facilities board, the state treasurer shall invest and divest monies in the fund as provided by section 35‑313, and monies earned from investment shall be credited to the lease‑to‑own fund.

I.  H.  A lease‑to‑own agreement entered into by the school facilities board pursuant to this section shall provide that:

1.  At the completion of the lease‑to‑own agreement, ownership of the school facilities and land associated with the lease‑to‑own agreement shall be transferred to the school district as specified in the agreement.

2.  The obligation of the school facilities board to make any payment under the lease‑to‑own agreement is a current expense, payable exclusively from appropriated monies, and is not a general obligation indebtedness of this state or the school facilities board.  The obligation of a school district to make expenditures under a sublease pursuant to subsection B, paragraph 3 of this section is a current expense, payable exclusively from budgeted monies, and is not a general obligation indebtedness of the school district.

3.  If the legislature fails to appropriate monies or the school facilities board fails to allocate such monies for any periodic payment or renewal term of the lease‑to‑own agreement, the lease‑to‑own agreement terminates at the end of the current term and this state and the school facilities board are relieved of any subsequent obligation under the agreement and the school district is relieved of any subsequent obligation under the sublease.

4.  The lease‑to‑own agreement shall be reviewed and approved by the attorney general before the agreement may take effect.

5.  Before the agreement takes effect and after review by the attorney general, the project or projects related to the agreement shall be submitted for review by the joint committee on capital review.

J.  I.  The school facilities board may covenant to use its best efforts to budget, obtain, allocate and maintain sufficient appropriated monies to make payments under a lease‑to‑own agreement, but the lease‑to‑own agreement shall acknowledge that appropriating state monies is a legislative act and is beyond the control of the school facilities board or of any other party to the lease‑to‑own agreement.

K.  J.  The land and the school facilities on the land are exempt from taxation during the term of the lease‑to‑own agreement and during construction and subsequent occupancy by the school district pursuant to the sublease.

L.  K.  The powers prescribed in this section are in addition to the powers conferred by any other law.  Without reference to any other provision of this title or to any other law, this section is authority for the completion of the purposes prescribed in this section for the school facilities board to provide school facilities for use by school districts through lease‑to‑own transactions pursuant to this section without regard to the procedure required by any other law.  Except as otherwise provided in this section, the provisions of this title that relate to the matters contained in this section are superseded because this section is the exclusive law on these matters.

M.  L.  The school facilities board shall not enter into lease‑to‑own transactions, including any refinancings or refundings, pursuant to this section from and after May 15, 2006. END_STATUTE

Sec. 40.  Section 15-2005, Arizona Revised Statutes, is amended to read:

START_STATUTE15-2005.  Local lease‑to‑own by school districts; expiration

A.  In order to fulfill the requirements of section 15‑2041, with the approval of the school facilities board, a school district may acquire school facilities by entering into a local lease‑to‑own transaction in accordance with this section.  For purposes of this section, providing school facilities includes land acquisition, related infrastructure, fixtures, furnishings, equipment and costs of the local lease‑to‑own transaction.  The school facilities board may provide monies to provide school facilities in part pursuant to section 15‑2041 and in part through payments to or for the benefit of a school district for a local lease‑to‑own transaction.

B.  A local lease‑to‑own transaction may provide for:

1.  The ground lease of the land for the facilities to a private entity for the term of the local lease‑to‑own transaction or for a term of up to one and one‑half times the term of the local lease‑to‑own transaction, subject to earlier termination on completion of performance of the local lease‑to‑own agreement.  The ground lessor may either be the school district or the school facilities board, whichever holds title to the land.

2.  The lease of the completed school facilities by a private entity to the school district for an extended term of years pursuant to a local lease‑to‑own agreement.  The local lease‑to‑own agreement shall provide for the use, maintenance and operation of the school facilities by the school district and for the transfer of ownership of the school facilities to the school district on completion of performance of the local lease‑to‑own agreement.

3.  The option for the school district's purchase of the school facilities and transfer of ownership of the school facilities to the school district before the expiration of the local lease‑to‑own agreement.

4.  The services of trustees, financial advisors, paying agents, transfer agents, underwriters, lawyers and other professional service providers, credit enhancements or liquidity facilities and all other services considered necessary by the school district or the school facilities board in connection with the local lease‑to‑own transaction, and related agreements and arrangements including arrangements for the creation and sale of certificates of participation evidencing proportionate interests in the lease payments to be made by the school district pursuant to the local lease‑to‑own agreement.

C.  Neither a ground lease by the school district as lessor nor a local lease‑to‑own agreement is required to be authorized by a vote of the school district electors.  A ground lease is not subject to any limitations or requirements applicable to leases or lease‑purchase agreements pursuant to section 15‑342 or any other section of this title.

D.  The school facilities board may make payments to or for the benefit of the school district from the lease‑to‑own fund established by section 15‑2004 for the payment of amounts payable under the local lease‑to‑own agreement.

E.  Any school facility that is constructed through a lease‑to‑own agreement shall meet the minimum building adequacy standards set forth in section 15‑2011.

F.  School districts may use local monies to exceed the minimum adequacy standards and to build athletic fields and any other capital project for leased‑to‑own facilities.

G.  The school facilities board shall include any square footage of new school facilities constructed through lease‑to‑own agreements in the computations prescribed in section 15‑2011.

H.  Pursuant to section 15‑2031, a school district is eligible to receive building renewal monies for any facility constructed through a lease‑to‑own agreement.  If a facility's building maintenance renewal is included in the lease‑to‑own agreement, the facility shall not be included in the district's building renewal calculation.

I.  H.  A local lease‑to‑own agreement entered into by a school district pursuant to this section shall provide that:

1.  At the completion of the lease‑to‑own agreement, ownership of the school facilities and land associated with the lease‑to‑own agreement shall be transferred to the school district as specified in the agreement.

2.  The obligation of the school district to make any payment or expenditure under the local lease‑to‑own agreement is a current expense, payable exclusively from properly budgeted monies, and is not a general obligation indebtedness of this state, the school facilities board or the school district, and that any payment by the school facilities board to or for the benefit of the school district from the lease‑to‑own fund established by section 15‑2004 for payments of amounts payable under the local lease‑to‑own agreement is a current expense, payable exclusively from appropriated monies, and is not a general obligation indebtedness of this state or the school facilities board.

3.  If the school district fails to properly budget for payments under the local lease‑to‑own agreement or if the legislature fails to appropriate monies or the school facilities board fails to allocate monies for periodic payment to or for the benefit of the school district for payments under the local lease‑to‑own agreement, the local lease‑to‑own agreement terminates at the end of the current term and the school district, the school facilities board and this state are relieved of any subsequent obligation under the local lease‑to‑own agreement.

4.  The local lease‑to‑own agreement shall be reviewed and approved by the attorney general before the agreement may take effect.

5.  Before the agreement takes effect and after review by the attorney general, the project or projects related to the agreement shall be submitted for review by the joint committee on capital review.

J.  I.  The school district may covenant to use its best efforts to budget, obtain, allocate and maintain sufficient monies to make payments under a local lease‑to‑own agreement, but the local lease‑to‑own agreement shall acknowledge that budgeting school district monies is a governmental act of the school district governing board that may not be contracted away.  The school facilities board is not required to covenant to budget, obtain, allocate or maintain sufficient monies in the lease‑to‑own fund to make payments to or for the benefit of a school district for payments under a local lease‑to‑own agreement.

K.  J.  The land and the school facilities on the land are exempt from taxation during the term of the local lease‑to‑own agreement and during construction and subsequent occupancy by the school district pursuant to the local lease‑to‑own agreement.

L.  K.  The powers prescribed in this section are in addition to the powers conferred by any other law.  Without reference to any other provision of this title or to any other law, this section is authority for the completion of the purposes prescribed in this section for school districts to provide school facilities through local lease‑to‑own transactions pursuant to this section without regard to the procedure required by any other law.  Except as otherwise provided in this section, the provisions of this title that relate to the matters contained in this section are superseded because this section is the exclusive law on these matters.

M.  L.  School districts shall not enter into lease-to-own transactions, including any refinancings or refundings, pursuant to this section from and after May 15, 2006." END_STATUTE

Renumber to conform

Page 37, between lines 2 and 3, insert:

"7.  A school district shall qualify for new construction funding in a fiscal year only if the school facilities board has approved or revised its enrollment projection under paragraph 3 of this subsection on or before March 1 of the prior fiscal year."

Page 40, line 40, after "law" insert "and shall reduce its budget limits accordingly"

Strike lines 41 through 45

Page 41, strike lines 1 through 22

Renumber to conform

Lines 34 and 35, strike "M" insert "L, Arizona Revised Statutes,"

Page 42, strike lines 4 through 44

Strike page 43

Page 44, strike lines 1 through 18

Renumber to conform

Page 45, line 12, after "for" insert "school districts and"

Line 14, before "The" insert "A."

Line 16, after "schools" insert "and school districts"

Line 18, after "act" insert "and shall reduce school district budget limits accordingly"

Line 20, after "school" insert "and school district"

Strike lines 22 through 35, insert:

"B.  For fiscal year 2013‑2014, the department of education shall reduce charter additional assistance for a school district that is not eligible to receive basic state aid funding for fiscal year 2013‑2014 by the amount that its charter additional assistance would be reduced pursuant to subsection A of this section if the school district was eligible to receive basic state aid funding for fiscal year 2013‑2014 and shall reduce the school district's budget limits accordingly.

Sec. 55.  Pilot program on school emergency readiness; report; delayed repeal

A.  The $3,646,400 state general fund appropriation to the department of education for the school safety program for fiscal year 2013-2014 in the general appropriations act includes $100,000 for a pilot program on school emergency readiness.

B.  School districts shall submit applications to the department of education to participate in the pilot program on or before September 30, 2013.

C.  On or before November 30, 2013, the department of education shall select three school districts to participate in the pilot program.  The selected school districts shall collectively consist of no more than thirty‑one individual school sites and shall consist of:

1.  One school district that is located in a county with a population of more than eight hundred thousand persons.

2.  One school district that is located in a county with a population of more than one hundred thousand persons but less than eight hundred thousand persons.

3.  One school district that is located in a county with a population of less than one hundred thousand persons.

D.  School districts that are selected to participate in the pilot program shall be provided and use a readiness and emergency management program that incorporates the following:

1.  Education specific emergency management software.  All plans and critical emergency readiness information including contacts, floor plans and critical equipment photos and locations shall be accessible online and off‑line via mobile device applications.  The software used in the pilot program shall comply with the national emergency information management system adopted by the federal emergency management agency.

2.  Training of teachers and administrators in the readiness and emergency management program.

3.  The development, implementation and maintenance of a comprehensive crisis plan for those school districts and their teachers and administrators.

E.  On or before November 1, 2014, the department of education shall submit to the governor, the president of the senate and the speaker of the house of representatives a report that summarizes the results of the pilot program.  The department of education shall provide a copy of the annual report to the secretary of state.

F.  This section is repealed from and after December 31, 2014.

Sec. 56.  Transfer; Arizona structured English immersion fund

On or before July 31, 2013, the department of education shall transfer $10,000,000 to the state general fund from the Arizona structured English immersion fund established by section 15‑756.04, Arizona Revised Statutes.

Sec. 57.  Soft capital carryforward balances; transfer

Notwithstanding any other law, a school district shall transfer any budget capacity and cash remaining in its soft capital allocation fund at the end of fiscal year 2012‑2013 to its maintenance and operations fund or its unrestricted capital outlay fund.

Sec. 58.  Provisions for bonds authorized by prior elections; legislative finding

A.  The bonded indebtedness limits prescribed in section 15‑1021, Arizona Revised Statutes, as amended by this act, apply to bonds issued pursuant to elections held both before and after the effective date of this act.

B.  The legislature finds and declares that the social, economic and financial welfare of the state is affected by the economic and financial conditions that have existed since 2008 and continue today.  The conditions have caused a decrease in tax revenue and in assessed valuations, which has resulted in a temporary emergency involving the ability to fund needed construction and repair of school facilities that is alleviated by this act."

Amend title to conform

 

 

 

1007sp

06/11/2013

09:35 PM

C: tdb