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ARIZONA HOUSE OF REPRESENTATIVES57th Legislature, 2nd Regular Session |
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HB 2384: school districts; lease agreements; requirements
Sponsor: Representative Gress, LD 4
Committee on Education
Overview
Modifies lease requirements for school district governing boards (governing boards) by limiting the maximum lease length at less than 20 years, mandating voter approval for leases that are for at least 10 years and requiring school buildings or grounds to be located within the school district's boundaries. Establishes real estate reporting requirements for school districts and the Division of School Facilities (SFD).
History
Statute details a governing board's discretionary powers, which include the power to enter into leases, subject to prescribed requirements. Specifically, a governing board may:
1) enter into leases or lease-purchase agreements for school buildings or grounds, as lessor or lessee, for less than 20 years without voter approval, unless the lease is to construct school buildings, in which case voter approval is required;
2) enter into leases or lease-purchase agreements for school buildings or grounds, as lessor or lessee, for between 20 and 99 years with voter approval, though statute outlines specific conditions in which voter approval is not required;
3) enter into option agreements to purchase school sites; and
4) lease school sites without voter approval if the buildings and sites are totally funded from specified sources (A.R.S. § 15-342 and 15-491).
SFD must maintain a school facilities database that includes all buildings owned by school districts. School districts must annually report information required by SFD and the School Facilities Oversight Board to administer school capital funding (A.R.S. § 41-5702).
Provisions
Lease Agreements
1. Prohibits a governing board from leasing, or approving the lease, of school property to any person or for any person if the school district leased that property, in whole or in part, from another person. (Sec. 3)
2. Caps the maximum length of a lease or lease-purchase agreement by a governing board for school buildings or grounds, as lessor as lessee, at less than 20 years, rather than 99 years. (Sec. 1)
3. Stipulates a governing board may enter into a lease or lease-purchase agreement as lessee only if the school buildings or grounds are located within the school district's boundaries. (Sec. 1, 2)
4. Requires a governing board to obtain voter approval for a lease that is for at least 10 years, rather than at least 20 years. (Sec. 1)
5. Specifies authorization by the school district electors in an election is not required if the lease or lease-purchase agreement is for not more than 10 years. (Sec. 1)
6. Caps the lease of school property by a governing board to specified governmental entities at not more than 10 years without voter approval or less than 20 years with voter approval. (Sec. 1).
7. Allows a governing board to enter into option agreements for the purchase of school sites only if the school sites are located within the school district's boundaries. (Sec. 1)
8. Prohibits a governing board from purchasing a school site or building that is located outside of the school district's boundaries. (Sec. 1, 2)
9. Reduces, from 20 years to 10 years after the election, the amount of time in which a governing board must call a special election to reauthorize negotiations if the governing board does not enter into a lease after receiving voter approval. (Sec. 2)
10. Limits the lease of school property by a governing board, or the superintendent or chief administrative officer with governing board approval, at not more than 10 years without voter approval or less than 20 years with voter approval. (Sec. 3)
11. Applies the lease requirements to any lease executed, renewed or amended after the general effective date. (Sec. 5)
Real Estate Holding Reporting
12. Requires, by October 1, 2026 and annually thereafter, each school district to report to SFD the following information about each real estate holding owned or leased by a school district during the immediately preceding school year:
a. the address and a description of the real estate holding as specified;
b. a description of the current use of each building that is part of the real estate holding;
c. whether the real estate holding is located outside the school district's boundaries;
d. the owner of the real estate holding; and
e. if the real estate holding is subject to a lease agreement:
i. the parties to the lease agreement;
ii. the terms of the lease;
iii. an estimate of the total amount of revenue that will be generated; and
iv. the total amount received or paid by the school district according to the lease agreement during the immediately preceding school year. (Sec. 4)
13. Directs SFD to compile the school district reports into a single report for the previous school year and submit the report to specified individuals by December 1, 2026, and annually thereafter. (Sec. 4)
14. Defines real estate holding. (Sec. 4)
Miscellaneous
15. Makes technical and conforming changes. (Sec. 1, 2, 3)
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19. Initials CH HB 2384
20. 2/1/2026 Page 0 Education
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