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ARIZONA HOUSE OF REPRESENTATIVESFifty-seventh Legislature First Regular Session |
House: ED DPA 12-0-0-0 | 3rd Read 37-21-2-0
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HB 2610: school districts; board members; superintendent
Sponsor: Representative Gress, LD 4
Senate Engrossed
Overview
Requires, if a school district is placed in receivership, the school district superintendent to be terminated for cause and the school district governing board (governing board) members to immediately resign. Outlines replacement and election procedures for governing board members who are required to resign. Restricts a governing board from entering into two or more real estate transactions in a 12-month period if the transactions involve the same parties and property.
History
The State Board of Education (SBE) has jurisdiction over all petitions requesting that a school district be placed in receivership or that a fiscal crisis team be appointed due to the school district's alleged insolvency or gross mismanagement. If, after a public meeting in which the school district has the opportunity to respond to the allegations, SBE finds that the school district is insolvent or has engaged in gross mismanagement, SBE may place the school district in receivership and appoint a receiver.
Once appointed, a receiver must begin an investigation of the school district's financial affairs. Within 120 days of appointment, the receiver is required to submit a detailed report that includes a financial improvement plan and budget that details how the school district will eliminate any continued gross mismanagement and achieve financial solvency. The financial improvement plan approved by SBE may authorize the receiver to: 1) override any decisions by the governing board or school district superintendent; 2) attend all governing board and administrative staff meetings; 3) supervise the day-to-day activities of school district staff; 4) place on extended leave, suspend or terminate for cause the school district superintendent or chief financial officer without providing a severance or buyout package; 5) authorize the transfer of pupils to other school districts; 6) appoint a chief educational officer, chief fiscal officer and independent public accountant; 7) reorganize the school district's financial accounts, management and budgetary systems; 8) establish school district fiscal guidelines and a system of internal controls; and 9) cancel or renegotiate most contracts.
After review and approval by SBE, the receiver must take all necessary steps to implement the financial improvement plan and budget. Statute details the requirements a school district must meet to be removed from receivership (A.R.S. § 15-103).
Provisions
School District Superintendent
1. Mandates the financial improvement plan for a school district placed in receivership to require the receiver to terminate for cause the school district superintendent. (Sec. 1)
2. Prohibits, if SBE places a school district in receivership, the receiver from providing a severance or buyout package to the school district superintendent. (Sec. 1)
3. Allows a school district superintendent who is terminated to file an appeal with SBE within 30 days after receiving notice of the termination. (Sec. 1)
4. Requires a school district superintendent who does not prevail in an appeal with SBE to surrender any certificates issued by the Arizona Department of Education (ADE). (Sec. 1)
Governing Board Members
5. Requires the following to occur if SBE places a school district in receivership:
a) each member of the governing board must immediately resign; and
b) the county school superintendent of the county in which the school district is located must appoint governing board members to temporarily fill the vacancies, except that:
i. the county school superintendent may not accept names from the governing board for consideration when filling the vacancies;
ii. the term of an appointment is until a special election is held to elect new governing board members;
iii. the county school superintendent must, as soon as practicable, call a special election to replace all governing board members who are temporarily appointed; and
iv. each vacancy must be filled by the county school superintendent of the county in which the former governing board member resided at the time of removal if the school district is located in two or more counties. (Sec. 2)
6. Directs the county school superintendent to assign by lot the new governing board members who are elected to initial two- and four-year terms. (Sec. 2)
7. Declares an elected governing board member's term, after the initial two- or four-year term, is four years from January 1 next following their election. (Sec. 2)
8. Excludes a governing board member from the resignation requirement if they:
a) submitted a written complaint relating to the school district's financial practices to SBE or ADE before ADE recommends that SBE place the school district in receivership; or
b) were elected or appointed as governing board member not more than six months before ADE recommends that SBE place the school district in receivership. (Sec. 2)
9. Requires, if SBE placed a school district in receivership in January 2025, each member of the school district governing board to immediately resign and the vacancies to be filled as outlined. (Sec. 5)
10. Repeals the resignation of governing board members requirement for a school district placed in receivership in January 2025 on January 1, 2026. (Sec. 5)
11. Declares a person is ineligible to hold an appointed state, county, city, town or precinct office established by legislative enactment if the person:
a) is required to resign as a governing board member due to SBE placing the school district in receivership; or
b) resigned as a governing board member up to one month before the school district was placed in receivership. (Sec. 4)
Governing Board Real Estate Transactions
12. Prohibits, retroactive to January 2, 2025, a governing board from entering into two or more real estate transactions in a 12-month period if the transactions involve the same parties and property. (Sec. 3, 6)
13. Defines property and transaction. (Sec. 3)
Miscellaneous
14. Contains a severability clause. (Sec. 7)
15. Passed without the emergency clause. (Sec. 8)
16. Makes technical and conforming changes. (Sec. 1, 3, 4)
Senate Amendments
1. Replaces the requirement that each governing board member immediately resign if SBE places the school district in receivership with the requirement that each governing board seat be deemed vacant by operation of law on the 31st day after SBE places the school district in receivership.
2. Deletes the requirement for the county school superintendent to call a special election as soon as practicable to replace all temporarily appointed governing board members.
3. Specifies the term for a governing board member appointed by the county school superintendent is until the next general election, rather than until a special election is held.
4. Directs the county school superintendent to assign by lot the new governing board members who are elected in the next general election.
5. Adds that a governing board member's seat is not deemed vacant if the governing board member applies to SBE for a waiver within 30 days of the school district being placed in receivership and in a form and manner prescribed by SBE.
6. Instructs SBE, on receipt of a waiver application, to waive the requirement that the governing board member's seat be deemed vacant if the application and supporting evidence clearly demonstrates that the governing board member:
a) attempted to address the school district's fiscal mismanagement; or
b) received false information about the school district's finances.
7. Defines supporting evidence.
8. Declares that if SBE does not waive the vacancy requirement, the governing board member's seat is vacant by operation of law on the date that SBE formally declines the waiver.
9. Directs a governing board to require:
a) before approving an expenditure or adopting a budget, the school district's administrators to provide all information and records relating to the expenditure or budget in a meeting for discussion at least one week before the meeting in which the governing board will vote on the expenditure or budget; and
b) before publishing a proposed budget, the school district's administrators to provide all information and records relating to the school district's budget in a meeting for discussion at least one week before a proposed budget is published.
10. Removes the January 1, 2025, retroactivity clause for the provision relating to prohibited governing board real estate transactions.
11. Adds a retroactivity clause of January 1, 2025, for the provisions relating to the:
a) termination of a school district superintendent;
b) requirement that a governing board member's seat be deemed vacant; and
c) ineligibility of a governing board member from holding appointive office.
12. Removes the emergency clause as the legislation failed to garner the required two-thirds vote in the House of Representatives.
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HB 2610
Initials CH Page 0 Senate Engrossed
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