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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
AMENDED
continuation; school facilities oversight board
Purpose
Continues the School Facilities Oversight Board (SFOB) for five years. Modifies conflict of interest disclosure requirements for SFOB employees and removes the authorization for the SFOB Director to expedite money requests for specified projects.
Background
In 2021, the Legislature restructured the School Facilities Board (SFB) by establishing the SFOB and the Division of School Facilities (Division) within the Arizona Department of Administration (ADOA) and transferring the SFB's statutory responsibilities to the SFOB and the Division (Laws 2021, Ch. 404). The SFOB must: 1) review and approve student school district population projections to determine New School Facilities Fund distributions; 2) certify that new school facilities plans meet building adequacy standards; 3) approve or reject school district requests to reduce pupil square footage; 4) adopt minimum facility adequacy guidelines for the Arizona Schools for the Deaf and Blind; 5) administer the Lease-To-Own Fund; 6) review the Division's policies for administering the Emergency Deficiencies Correction Fund and the Building Renewal Grant Fund; and 7) report as outlined regarding the SFOB's actions. The SFOB may authorize revenue bonds for outlined expenses (A.R.S. §§ 41-5702; 41-5703; 41-5721; and 41-5731).
The SFOB consists of nine members, seven of whom are appointed by the Governor to serve four-year terms. The appointed members include: 1) one representative of a statewide organization of taxpayers; 2) one registered architect; 3) one member with knowledge and experience in school facilities management in a public school system; 4) one registered professional engineer; 5) one member who represents the business community; and 6) two members who are owners or officers of a private construction company who have knowledge and experience in construction large commercial or government buildings and whose business does not include school construction. Additionally, the Superintendent of Public Instruction and the ADOA Director serve as advisory nonvoting members (A.R.S. § 41-5701.02).
The Senate Education Committee of Reference (COR) held a public meeting on January 16, 2025, to review the Auditor General's performance audit and sunset review, evaluate the SFOB's responses to sunset review factors and receive public testimony. The Senate COR recommended that the Legislature continue the SFOB with revisions (COR Report). The SFOB terminates on July 1, 2025, unless continued by the Legislature (A.R.S. § 41-3025.07).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Continues, retroactive to July 1, 2025, the SFOB, until July 1, 2030.
2. Repeals the SFOB on January 1, 2031, if:
a) the SFOB has no outstanding state school facilities revenue bonds issued, no outstanding state school improvement revenue bonds issued and no outstanding lease-to-own transactions; or
b) the Legislature has otherwise provided for paying or retiring any outstanding state school facilities revenue bonds, any outstanding state school improvement revenue bonds and any outstanding lease-to-own transactions.
3. Repeals the SFOB, if neither of the conditions relating to outstanding revenue bonds and lease-to-own transaction are met by January 1, 2031, 30 days after the retirement of all revenue bonds and any outstanding lease-to-own transactions.
4. Directs the SFOB Director to require each SFOB employee to annually disclose in writing to the SFOB any interest that the employee has in any contract, sale, purchase, service or other transaction of the SFOB or Division.
5. Requires the SFOB to determine whether any interest disclosed by an SFOB employee is a substantial interest and to maintain a record of all identified substantial interests.
6. Removes the authorization for the SFOB Director to expedite any request for monies in which the local match was not obtained for a project that received preliminary approval by the State Board of Education for capital facilities.
7. Clarifies that the SFOB may direct the Division to temporarily transfer monies between the Emergency Deficiencies Correction Fund and New School Facilities Fund.
8. Contains a purpose statement.
9. Makes technical and conforming changes.
10. Becomes effective on the general effective date, with a retroactive provision as noted.
Amendments Adopted by Committee of the Whole
1. Continues the SFOB for five years, rather than two years, until July 1, 2030.
2. Directs the SFOB Director to require each SFOB employee to annually disclose any interest that the employee has in any contract, sale, purchase, service or other transaction of the SFOB or Division.
3. Requires the SFOB to determine whether any interest disclosed by an SFOB employee is a substantial interest and to maintain a record of all identified substantial interests.
4. Removes the authorization for the SFOB Director to expedite any request for monies in which the local match was not obtained for a project that received preliminary approval by the State Board of Education for capital facilities.
5. Clarifies that the SFOB may direct the Division to temporarily transfer monies between the Emergency Deficiencies Correction Fund and New School Facilities Fund.
6. Makes technical and conforming changes.
Senate Action
ED 2/19/25 DP 6-1-0
Prepared by Senate Research
March 11, 2025
MH/KK/ci