Assigned to K-12 ED & APPROP                                                                                                          AS ENACTED

ARIZONA STATE SENATE

Forty-seventh Legislature, Second Regular Session

FINAL AMENDED

FACT SHEET FOR H.B. 2700

JTEDs; omnibus

Purpose

            Defines a joint technical education district (JTED) course and expands the governance duties of a JTED governing board. Modifies the calculation of shared student enrollment between a JTED and member districts or participating charter schools. Creates new requirements for intergovernmental agreements (IGAs) for JTEDs and establishes new annual reporting requirements for a JTED and the Arizona Department of Education.

Background

            In 1990, the Legislature enacted legislation to facilitate the delivery and mitigate the cost of vocational and career and technical education offerings by allowing public school districts to form cooperatives known as joint technological education districts (JTEDs). Current statutes allow school districts to form a JTED upon voter approval in each of their districts.  The governance structure of a JTED is similar to that of a school district with an elected governing board.  Currently, ten JTEDs operate career and vocational education programs in the state:

East Valley Institute of Technology (EVIT)

Northern Arizona Vocational Institute of Technology (NAVIT)

Northeastern Arizona Technological Institute of Vocational Education (NATIVE)

Gila Institute of Technology (GIFT)

Valley Academy for Career and Technology Education (VACTE)

Central Arizona Valley Institute of Technology (CAVIT)

Cobre Valley Institute of Technology (CVIT)

Coconino Association for Vocation, Industry and Technology (CAVIAT)

Western Maricopa Education Consortium and Native (West-MEC)

Cochise Technology District (CTD)

            A JTED may levy at a rate of five cents per $100 of secondary property net assessed valuation and receive funding through local, county, state and federal monies.  For FY 2005-2006, the Joint Legislative Budget Committee (JLBC) estimates that the ten JTEDs will serve approximately 14,000 average daily membership (ADM) statewide and receive approximately $43 million in state aid funding.

            A JTED may operate under two organizational models: central or satellite. In a JTED that uses the central model, the member school districts send students to a centralized facility for instruction. Under this model, both the member district and the JTED are allowed to include each student in their ADM calculation. Under a satellite model, the member school districts continue to provide the instruction and facilities in a JTED authorized vocational course. Currently, the member school districts and the JTED receive a combined 1.25 ADM per student in satellite courses and share funding for those students in a manner determined by the member school districts and the JTED. JTEDs also collaborate with community college districts to allow for dual enrollment courses for community college credit.

            In 2004, the Auditor General completed an analysis of both EVIT and NAVIT and found that each had converted a majority of their existing high school vocational courses to satellite courses without making substantive changes, resulting in higher state aid funding. Additionally, the Auditor General found that in some cases, student enrollment figures had been overstated and that other potential state fiscal impacts existed such as removal of the state funding cap, expansion to elementary districts, nontechnical courses included as prerequisites and increased dual enrollment courses with community colleges. In the report, the Auditor General recommended review of the central and satellite models, restriction of vocational funds for vocational purposes and clarification of the type and level of classes that should be included for JTED funding.

            Laws 2005, Chapter 329 modified JTED funding by capping state aid for JTED districts in FY 2005-2006.  Laws 2005, Chapter 294 continued through FY 2005-2006 an existing moratorium on the formation of new JTEDs or expansion of existing JTEDs with an exemption for Pima County.  Additionally, Laws 2005, Chapter 294 permanently prohibited funding for general education courses at a JTED, limited concurrent enrollment at .5 ADM for school districts in FY 2005-2006 and eliminated funding to community colleges for dual enrollment courses offered by a JTED and community college district in FY 2005-2006.  Finally, Chapter 294 permanently abolished funding for K-8 students attending at a JTED and specified that all monies received by school districts for pass through funding from JTED courses must be expended for career and technical education (phased in over three years).

            There is an unknown potential impact to the state General Fund. H.B. 2700 increases the combined total of ADM that may be shared by a JTED and its member school districts, which may result in increased state aid. Conversely, this bill sets new definitions for JTED satellite and centralized courses and excludes from ADM calculations students in grade nine who are enrolled in career exploration classes, which may result in a decrease in state funding. The bill also restricts increases in local property taxes that may result in tax savings for property owners.

Provisions

Average Daily Membership

1. Specifies that in order for a charter school to receive shared funding with a JTED of up to 1.25 ADM for a charter school student who is enrolled in both the charter school and a JTED, the student must reside within the boundaries of a school district that participates in the JTED.

2. Excludes a student in grade nine who is enrolled in career exploration courses from being counted in a JTED’s average daily attendance or ADM.

3. Caps, retroactive to August 1, 2005, the ADM of a pupil at .75 if that pupil is enrolled in a course that meets for at least 150 minutes per class period at a centralized JTED campus.

JTED Course Definition

4. Defines a JTED course to meet each of the following requirements:

a) designed to lead a student toward a specific career, vocation or industry, including certification accepted as a demonstration of skill or competency.

b) taught by an instructor who is certified by the State Board of Education or a postsecondary educational institution to teach career and technical education.

c) requires the use of special equipment or specialized instruction materials above and beyond the scope and cost of a standard and educational course.

d) requires a student to pass an industry-accepted examination that demonstrates the student’s skill or competency in that vocation or industry.

e) approved by the Career and Technical Education Division of the Arizona Department of Education (CTE) within 120 days of submission of documentation.

f) certified by the JTED governing board.

g) offered to students in grades ten through twelve.

5. Allows a JTED governing board to appeal course approval decisions made by CTE to the State Board of Education for Vocational Education.

JTED Governing Boards

6. Specifies that a JTED governing board manages and controls the quality and content of courses offered, the quality and salaries of teachers and the reimbursement of entities that provide facilities to the JTED.

7. Prohibits a JTED employee or the employee’s spouse from serving on the governing board of the JTED district in which they are employed. Excludes current JTED governing board members from this restriction.

8. Prohibits a JTED governing board member from simultaneously holding a position on other governing boards unless the member is serving in his or her last year of office.

Taxes

9. Prohibits a JTED from imposing any property tax levy that exceeds five cents per $100 of assessed valuation currently allowed in law, excluding monies intended to compensate for bond indebtedness.

Intergovernmental Agreements and Written Contracts

10. Requires an agreement between the governing board of a JTED and the governing boards of other JTEDs, school districts, charter schools and community college districts to be in the form of a written contract or IGA that includes the following:

a) financial provisions and the billing format for all services.

b) accountability provisions.

c) responsibilities of each party.

d) type and quality of instruction.

e) transportation services and how those costs will be paid.

f) amount that the JTED will contribute to a course and the amount of support required by the school district or community college.

g) specification that the services provided by the parties will be proportionally calculated in the cost of delivering the services.

h) agreement that the payment for the services will not exceed the cost of the services.

11. Requires any initial IGAs or other written contracts and any addendums between the governing boards of a JTED and another JTED, school district or community college to be submitted to JLBC for review.

12. Requires the Auditor General to modify the uniform system of financial records and budget forms to allow written contracts and IGAs between the governing boards of JTEDs and the governing boards of other JTEDs, school districts, charter schools or community college districts.

13. Requires, retroactive to June 30, 2006, each JTED to begin the process of implementing the IGA or written contract process no later than July 1, 2006, and complete the process no later than June 30, 2007.

Reporting Requirements

14. Requires each JTED to submit an annual report on or before December 31 of each year to CTE.

15. Requires CTE to collect, summarize and analyze the data submitted by the JTEDs and submit a report that summarizes the data to the Governor, the Speaker of the House of Representatives, the President of the Senate, the State Board of Education, the Secretary of State and the Director of the Arizona State Library, Archives and Public Records.

16. Specifies that the report submitted by CTE must include the ADM, descriptions and costs of the courses offered, completion and graduate rate of enrolled students, a detailed description of the career opportunities, placement available to students after graduation, career placement of students who have completed a program and any other pertinent data for each JTED.

Miscellaneous

17. Extends current JTED formation and expansion caps in FY 2006- 2007.

18. Allows JTED funding in FY 2006-2007 to increase by two percent from the amount of state aid received in FY 2005-2006 plus the amount of county equalization assistance for education tax rate the JTED received in FY 2005-2006.

19. Makes technical and conforming changes.

20. Becomes effective on the general effective date, with retroactive provisions as noted.

Amendments Adopted by Appropriations Committee

1. Reduces the combined ADM for a student enrolled in both a charter school and a JTED.

2. Specifies that charter school sites must be located within the boundaries of a school district participating in a JTED to qualify for additional funding.

3. Removes the ADM increase shared by a school district and a JTED.

4. Deletes language allowing automatic approval of a JTED course by CTE and increases CTE response time to 120 days. 

5. Restores age restrictions for students attending programs in high school and JTED buildings during regular school hours.

6. Eliminates a JTED’s ability to levy property taxes for adjacent ways.

7. Extends current JTED funding, formation and expansion caps.

8. Requires JTEDs to submit IGAs or other written contracts to JLBC for review.

9. Describes the conditions under which a minor school district boundary adjustment may occur if a petition for the change is rejected by the school district in which the petitioners reside.

10. Adds a new reporting requirement.

Amendments Adopted by Committee of the Whole

1. Specifies that charter school students must reside within a school district that participates in a JTED in order to count toward shared ADM between the charter school and the JTED.

2. Allows JTED funding to increase in FY 2006-2007.

3. Removes language describing the conditions under which a minor school district boundary adjustment may occur.

House Action Senate Action

ED                   2/1/06     DP        7-2-0-1                    K-12 ED         3/22/06     DP        6-2-0-0

APPROP (B) 2/21/06   DPA     13-0-1-1                  APPROP         4/18/06     DPA     8-3-0-0

3^rd Read           3/13/06                58-2-0-0                  3^rd Read           6/20/06                  22-6-2-0   

Final Read       6/20/06                56-0-4-0

Signed by the Governor 6/21/06

Chapter 341

Prepared by Senate Research

July 6, 2006

DN/BB/jas