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REFERENCE TITLE: school districts; receivership; mandatory consolidation |
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State of Arizona Senate Fifty-seventh Legislature Second Regular Session 2026
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SB 1507 |
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Introduced by Senator Fernandez
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AN ACT
amending title 15, chapter 1, article 1, Arizona Revised Statutes, by adding section 15-103.01; relating to public schools.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 15, chapter 1, article 1, Arizona Revised Statutes, is amended by adding section 15-103.01, to read:
15-103.01. Small school districts; receivership; consolidation as a matter of law; new governing board; powers and duties of receiver
A. Notwithstanding any other law, if the state board of education places a school district in receivership pursuant to section 15-103 and the school district has a student count of less than three hundred, the following school districts are consolidated into one school district as a matter of law:
1. If the school district in receivership is a high school district or a union high school district, the school district in receivership, the closest school district and any common school district that is located within the boundaries of the school district in receivership.
2. If the school district in receivership is not a high school district or a union high school district, the school district in receivership and the closest school district.
B. For the purposes of subsection A of this section, the closest school district is the school district that both:
1. Meets one of the following:
(a) Adjoins the school district in receivership.
(b) If there is no adjoining school district and only one school district is adjacent to the school district in receivership, the adjacent school district.
(c) If there is no adjoining school district and more than one school district is adjacent to the school district in receivership, the adjacent school district with the shortest distance between its boundaries and the boundaries of the school district in receivership.
2. Provides instruction to students in:
(a) Elementary grades, if the school district in receivership is a common school district.
(b) Secondary grades, if the school district in receivership is a high school district, a union high school district or a unified school district.
C. The terms of the governing board members of the previously existing school districts do not expire on the effective date of the consolidation and continue until January 1 following the next general election, during which time the members of the governing boards of the previously existing school districts shall serve as the governing board of the new school district. At the next general election held following the consolidation and thereafter, five members shall be elected as prescribed by section 15-427, subsection B. The new board shall take office on January 1 following the general election.
D. Notwithstanding section 15-103, the receiver who is appointed by the state board of education:
1. Does not have the powers prescribed in section 15-103, subsection F.
2. Shall submit to the governing board of the new school district a copy of the report, financial improvement plan and budget that the receiver submits to the state board of education pursuant to section 15-103.
3. Shall advise the governing board of the new school district how the school district may eliminate any continued gross financial mismanagement and achieve financial solvency.
4. May recommend that the governing board of the new school district take any of the actions listed in section 15-103, subsection F.
E. Notwithstanding section 15-103, subsection J, the state board of education shall dismiss the receiver thirty days after all of the following occur:
1. The auditor general certifies that the school district has been financially solvent for one fiscal year.
2. The auditor general certifies that the school district's financial records are in compliance with the uniform system of financial records and generally accepted accounting principles.
3. The receiver certifies that the new school district is not engaged in gross mismanagement.
4. The state board of education determines that the new school district is able to pay its debts as those debts become due.
5. The new school district governing board notifies that state board of education that the advice and professional services of the receiver are no longer necessary.