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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
Vetoed by the Governor
Overview
Requires, if a school district is placed in receivership, the school district superintendent to be terminated for cause and each school district governing board (governing board) seat to be declared vacant. Outlines replacement and election procedures for governing board seats that are declared vacant. Makes a governing board member whose seat is declared vacant ineligible to hold an appointed office. 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 (Retroactive to January 1, 2025)
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, 6)
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, 6)
3. Allows a school district superintendent to appeal their termination to SBE within 30 days after receiving notice of the termination. (Sec. 1, 6)
4. Requires a school district superintendent who does not prevail in an appeal to surrender any certificates issued by the Arizona Department of Education (ADE). (Sec. 1, 6)
Governing Board Members (Retroactive to January 1, 2025)
5. Declares, on the 31st day after SBE places a school district in receivership, each governing board seat vacant by operation of law. (Sec. 2, 6)
6. Requires the county school superintendent of the county in which the school district is located to appoint governing board members to fill the vacancies, except that if the school district is in more than one county, each vacancy must be filled by the county school superintendent of the county in which the former governing board member resided on the date the seat was deemed vacant. (Sec. 2, 6)
7. Prohibits the county school superintendent from accepting names from the governing board for consideration when filling the vacancies. (Sec. 2, 6)
8. Specifies the term of an appointment of a governing board member appointed by the county school superintendent is until the next general election. (Sec. 2, 6)
9. Directs the county school superintendent to assign by lot the new governing board members who are elected in the next general election to initial two- and four-year terms. (Sec. 2, 6)
10. Specifies 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, 6)
11. Excludes a governing board member from the requirement that their seat be deemed vacant by operation of law if they:
a) submitted a written complaint relating to the school district's financial practices to SBE or ADE before the date on which ADE recommends that SBE place the school district in receivership;
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; or
c) apply to SBE for a waiver. (Sec. 2, 6)
12. Allows a governing board member of a school district in receivership to apply to SBE, in a form and manner prescribed by SBE and within 30 days of SBE placing the school district in receivership, for a waiver from the vacancy requirement. (Sec. 2, 6)
13. 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. (Sec. 2, 6)
14. Asserts 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. (Sec. 2, 6)
15. Defines supporting evidence. (Sec. 2, 6)
16. Declares, if SBE placed a school district in receivership in January 2025, each seat of the school district's governing board is deemed vacant by operation of law and must be filled as outlined. (Sec. 5, 6)
17. Repeals, on January 1, 2027, the vacancy requirement for governing board members of a school district placed in receivership in January 2025. (Sec. 5, 6)
18. Makes a person ineligible to hold an appointed state, county, city, town or precinct office established by legislative enactment if the person:
a) held a governing board member seat that was deemed vacant; or
b) resigned as a governing board member up to one month before the school district was placed in receivership. (Sec. 4, 6)
Governing Board Powers and Duties
19. Prohibits 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)
20. Defines property and transaction. (Sec. 3)
21. Mandates a governing board require that the school district's administrators provide all information and records relating to:
a) an 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) the school district's budget in a meeting for discussion at least one week before a proposed budget is published. (Sec. 3)
Miscellaneous
22. Contains a severability clause. (Sec. 7)
23. Makes technical and conforming changes. (Sec. 1, 3, 4)
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HB 2610
Initials CH Page 0 Vetoed by the Governor
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