HB2200 - 492R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 15-185, Arizona Revised Statutes, is amended to read:

START_STATUTE15-185. Charter schools; financing; civil penalty; transportation; definitions

A. Financial provisions for a charter school that is sponsored by a school district governing board are as follows:

1. The charter school shall be included in the district's budget and financial assistance calculations pursuant to paragraph 3 of this subsection and chapter 9 of this title, except for chapter 9, article 4 of this title. The charter of the charter school shall include a description of the methods of funding the charter school by the school district. The school district shall send a copy of the charter and application, including a description of how the school district plans to fund the school, to the state board of education before the start of the first fiscal year of operation of the charter school. The charter or application shall include an estimate of the student count for the charter school for its first fiscal year of operation. This estimate shall be computed pursuant to the requirements of paragraph 3 of this subsection.

2. A school district is not financially responsible for any charter school that is sponsored by the state board of education or the state board for charter schools.

3. A school district that sponsors a charter school may:

(a) Increase its student count as provided in subsection B, paragraph 2 of this section during the first year of the charter school's operation to include those charter school pupils who were not previously enrolled in the school district. A charter school sponsored by a school district governing board is eligible for the assistance prescribed in subsection B, paragraph 4 of this section. The soft capital allocation as provided in section 15‑962 for the school district sponsoring the charter school shall be increased by the amount of the additional assistance. The school district shall include the full amount of the additional assistance in the funding provided to the charter school.

(b) Compute separate weighted student counts pursuant to section 15‑943, paragraph 2, subdivision (a) for its noncharter school versus charter school pupils in order to maintain eligibility for small school district support level weights authorized in section 15‑943, paragraph 1 for its noncharter school pupils only. The portion of a district's student count that is attributable to charter school pupils is not eligible for small school district support level weights.

4. If a school district uses the provisions of paragraph 3 of this subsection, the school district is not eligible to include those pupils in its student count for the purposes of computing an increase in its revenue control limit and district support level as provided in section 15‑948.

5. A school district that sponsors a charter school is not eligible to include the charter school pupils in its student count for the purpose of computing an increase in its capital outlay revenue limit as provided in section 15‑961, subsection C, except that if the charter school was previously a school in the district, the district may include in its student count any charter school pupils who were enrolled in the school district in the prior year.

6. A school district that sponsors a charter school is not eligible to include the charter school pupils in its student count for the purpose of computing the revenue control limit which is used to determine the maximum budget increase as provided in chapter 4, article 4 of this title unless the charter school is located within the boundaries of the school district.

7. If a school district converts one or more of its district public schools to a charter school and receives assistance as prescribed in subsection B, paragraph 4 of this section, and subsequently converts the charter school back to a district public school, the school district shall repay the state the total additional assistance received for the charter school for all years that the charter school was in operation. The repayment shall be in one lump sum and shall be reduced from the school district's current year equalization assistance. The school district's general budget limit shall be reduced by the same lump sum amount in the current year.

B. Financial provisions for a charter school that is sponsored by the state board of education or the state board for charter schools are as follows:

1. The charter school shall calculate a base support level as prescribed in section 15‑943, except that sections 15‑941 and 15‑942 do not apply to these charter schools.

2. Notwithstanding paragraph 1 of this subsection, the student count shall be determined initially using an estimated student count based on actual registration of pupils before the beginning of the school year. After the first one hundred days or two hundred days in session, as applicable, the charter school shall revise the student count to be equal to the actual average daily membership attendance, as defined in section 15‑901, or the adjusted average daily membership, as prescribed in section 15‑902, of the charter school. A charter school that provides two hundred days of instruction may use section 15-902.02 for the purposes of this section. Before the one hundredth day or two hundredth day in session, as applicable, the state board of education or the state board for charter schools may require a charter school to report periodically regarding pupil enrollment and attendance, and the department of education may revise its computation of equalization assistance based on the report. A charter school shall revise its student count, base support level and additional assistance before May 15. A charter school that overestimated its student count shall revise its budget before May 15. A charter school that underestimated its student count may revise its budget before May 15.

3. A charter school may utilize section 15‑855 for the purposes of this section. The charter school and the department of education shall prescribe procedures for determining average daily attendance and average daily membership.

4. Equalization assistance for the charter school shall be determined by adding the amount of the base support level and additional assistance. The amount of the additional assistance is one thousand five hundred eighty‑eight dollars forty‑four cents per student count in kindergarten programs and grades one through eight and one thousand eight hundred fifty‑one dollars thirty cents per student count in grades nine through twelve.

5. The state board of education shall apportion state aid from the appropriations made for such purposes to the state treasurer for disbursement to the charter schools in each county in an amount as determined by this paragraph. The apportionments shall be made as prescribed in section 15‑973, subsection B.

6. The charter school shall not charge tuition for pupils who reside in this state, levy taxes or issue bonds. A charter school may admit pupils who are not residents of this state and shall charge tuition for those pupils in the same manner prescribed in section 15‑823.

7. Not later than noon on the day preceding each apportionment date established by paragraph 5 of this subsection, the superintendent of public instruction shall furnish to the state treasurer an abstract of the apportionment and shall certify the apportionment to the department of administration, which shall draw its warrant in favor of the charter schools for the amount apportioned.

C. If a pupil is enrolled in both a charter school and a public school that is not a charter school, the sum of the daily membership attendance, which includes enrollment as prescribed in section 15‑901, subsection A, paragraph 2 1, subdivisions (a) and (b) and daily attendance as prescribed in section 15‑901, subsection A, paragraph 6 5, for that pupil in the school district and the charter school shall not exceed 1.0, except that if the pupil is enrolled in both a charter school and a joint technological education district and resides within the boundaries of a school district participating in the joint technological education district, the sum of the average daily membership attendance for that pupil in the charter school and the joint technological education district shall not exceed 1.25. If a pupil is enrolled in both a charter school and a public school that is not a charter school, the department of education shall direct the average daily membership attendance to the school with the most recent enrollment date. Upon validation of actual enrollment in both a charter school and a public school that is not a charter school and if the sum of the daily membership or daily attendance for that pupil is greater than 1.0, the sum shall be reduced to 1.0 and shall be apportioned between the public school and the charter school based on the percentage of total time that the pupil is enrolled or in attendance in the public school and the charter school, except that if the pupil is enrolled in both a charter school and a joint technological education district and resides within the boundaries of a school district participating in the joint technological education district, the sum of the average daily membership attendance for that pupil in the charter school and the joint technological education district shall be reduced to 1.25 and shall be apportioned between the charter school and the joint technological education district based on the percentage of total time that the pupil is enrolled or in attendance in the charter school and the joint technological education district. The uniform system of financial records shall include guidelines for the apportionment of the pupil enrollment and attendance as provided in this section.

D. Charter schools are allowed to accept grants and gifts to supplement their state funding, but it is not the intent of the charter school law to require taxpayers to pay twice to educate the same pupils. The base support level for a charter school or for a school district sponsoring a charter school shall be reduced by an amount equal to the total amount of monies received by a charter school from a federal or state agency if the federal or state monies are intended for the basic maintenance and operations of the school. The superintendent of public instruction shall estimate the amount of the reduction for the budget year and shall revise the reduction to reflect the actual amount before May 15 of the current year. If the reduction results in a negative amount, the negative amount shall be used in computing all budget limits and equalization assistance, except that:

1. Equalization assistance shall not be less than zero.

2. For a charter school sponsored by the state board of education or the state board for charter schools, the total of the base support level and the additional assistance shall not be less than zero.

3. For a charter school sponsored by a school district, the base support level for the school district shall not be reduced by more than the amount that the charter school increased the district's base support level, capital outlay revenue limit and soft capital allocation.

E. If a charter school was a district public school in the prior year and is now being operated for or by the same school district and sponsored by the state board of education, the state board for charter schools or a school district governing board, the reduction in subsection D of this section applies. The reduction to the base support level of the charter school or the sponsoring district of the charter school shall equal the sum of the base support level and the additional assistance received in the current year for those pupils who were enrolled in the traditional public school in the prior year and are now enrolled in the charter school in the current year.

F. Equalization assistance for charter schools shall be provided as a single amount based on average daily membership attendance without categorical distinctions between maintenance and operations or capital.

G. At the request of a charter school, the county school superintendent of the county where the charter school is located may provide the same educational services to the charter school as prescribed in section 15‑308, subsection A. The county school superintendent may charge a fee to recover costs for providing educational services to charter schools.

H. If the sponsor of the charter school determines at a public meeting that the charter school is not in compliance with federal law, with the laws of this state or with its charter, the sponsor of a charter school may submit a request to the department of education to withhold up to ten per cent of the monthly apportionment of state aid that would otherwise be due the charter school. The department of education shall adjust the charter school's apportionment accordingly. The sponsor shall provide written notice to the charter school at least seventy‑two hours before the meeting and shall allow the charter school to respond to the allegations of noncompliance at the meeting before the sponsor makes a final determination to notify the department of education of noncompliance. The charter school shall submit a corrective action plan to the sponsor on a date specified by the sponsor at the meeting. The corrective action plan shall be designed to correct deficiencies at the charter school and to ensure that the charter school promptly returns to compliance. When the sponsor determines that the charter school is in compliance, the department of education shall restore the full amount of state aid payments to the charter school.

I. In addition to the withholding of state aid payments pursuant to subsection H of this section, the sponsor of a charter school may impose a civil penalty of one thousand dollars per occurrence if a charter school fails to comply with the fingerprinting requirements prescribed in section 15‑183, subsection C or section 15‑512. The sponsor of a charter school shall not impose a civil penalty if it is the first time that a charter school is out of compliance with the fingerprinting requirements and if the charter school provides proof within forty-eight hours of written notification that an application for the appropriate fingerprint check has been received by the department of public safety. The sponsor of the charter school shall obtain proof that the charter school has been notified, and the notification shall identify the date of the deadline and shall be signed by both parties. The sponsor of a charter school shall automatically impose a civil penalty of one thousand dollars per occurrence if the sponsor determines that the charter school subsequently violates the fingerprinting requirements. Civil penalties pursuant to this subsection shall be assessed by requesting the department of education to reduce the amount of state aid that the charter school would otherwise receive by an amount equal to the civil penalty. The amount of state aid withheld shall revert to the state general fund at the end of the fiscal year.

J. A charter school may receive and spend monies distributed by the department of education pursuant to section 42‑5029, subsection E and section 37‑521, subsection B.

K. If a school district transports or contracts to transport pupils to the Arizona state schools for the deaf and the blind during any fiscal year, the school district may transport or contract with a charter school to transport sensory impaired pupils during that same fiscal year to a charter school if requested by the parent of the pupil and if the distance from the pupil's place of actual residence within the school district to the charter school is less than the distance from the pupil's place of actual residence within the school district to the campus of the Arizona state schools for the deaf and the blind.

L. For the purposes of this section:

1. "Monies intended for the basic maintenance and operations of the school" means monies intended to provide support for the educational program of the school, except that it does not include supplemental assistance for a specific purpose or title VIII of the elementary and secondary education act of 1965 monies. The auditor general shall determine which federal or state monies meet the definition in this paragraph.

2. "Operated for or by the same school district" means the charter school is either governed by the same district governing board or operated by the district in the same manner as other traditional schools in the district or is operated by an independent party that has a contract with the school district. The auditor general and the department of education shall determine which charter schools meet the definition in this subsection. END_STATUTE

Sec. 2. Section 15-238, Arizona Revised Statutes, is amended to read:

START_STATUTE15-238. Statewide student estimate

Before February 15 of each year the department of education shall submit to the economic estimates commission the total estimated statewide number of students determined for the current year using the unit of measurement prescribed in section 15‑902, subsections A and B.END_STATUTE

Sec. 3. Section 15-239, Arizona Revised Statutes, is amended to read:

START_STATUTE15-239. School compliance and recognition; accreditation; audits

A. The department of education may:

1. Monitor school districts to ascertain that laws applying to the school districts are implemented as prescribed by law.

2. Adopt a system of recognition for school districts that meet or exceed the requirements of the law that apply to the school districts.

3. Establish standards and procedures for the accreditation of all schools requesting state accreditation.

B. The department of education may adopt guidelines necessary to implement this section.

C. The department of education may conduct financial, compliance or average daily membership attendance audits of school districts and charter schools.

D. The auditor general may conduct financial, program, compliance or average daily membership attendance audits of school districts and charter schools. END_STATUTE

Sec. 4. Section 15-241, Arizona Revised Statutes, is amended to read:

START_STATUTE15-241. School accountability; schools failing to meet academic standards; failing schools tutoring fund; classification label for school districts and charter school operators

A. The department of education shall compile an annual achievement profile for each public school.

B. Each school shall submit to the department any data that is required and requested and that is necessary to compile the achievement profile. A school that fails to submit the information that is necessary is not eligible to receive monies from the classroom site fund established by section 15‑977.

C. The department shall establish a baseline achievement profile for each school by October 15, 2001. The baseline achievement profile shall be used to determine a standard measurement of acceptable academic progress for each school and a school classification pursuant to subsection H of this section. Any disclosure of educational records compiled by the department of education pursuant to this section shall comply with the family educational and privacy rights act of 1974 (20 United States Code section 1232g).

D. The achievement profile for schools that offer instruction in kindergarten programs and grades one through eight, or any combination of those programs or grades, shall include the following school academic performance indicators:

1. The Arizona measure of academic progress. The department shall compute the extent of academic progress made by the pupils in each school during the course of each year.

2. The Arizona instrument to measure standards test. The department shall compute the percentage of pupils who meet or exceed the standard on the Arizona instrument to measure standards test, as prescribed by the state board of education. The superintendent of public instruction and the department may calculate academic gain on the Arizona instrument to measure standards test according to each of the school classifications prescribed in subsection G of this section on a statewide basis, for each school district in this state and for each school by determining the average scale scores for students in the current academic year as compared to the average scale scores for the previous academic year for the same students.

3. The results of English language learners tests administered pursuant to section 15‑756, subsection B, section 15‑756.05 and section 15‑756.06.

E. The achievement profile for schools that offer instruction in grades nine through twelve, or any combination of those grades, shall include the following school academic performance indicators:

1. The Arizona instrument to measure standards test. The department shall compute the percentage of pupils pursuant to subsection G of this section who meet or exceed the standard on the Arizona instrument to measure standards test, as prescribed by the state board of education. The superintendent of public instruction and the department may calculate academic gain on the Arizona instrument to measure standards test according to each of the school classifications prescribed in subsection G of this section on a statewide basis, for each school district in this state and for each school by determining the average scale scores for students in the current academic year as compared to the average scale scores for the previous academic year for the same students.

2. The annual dropout rate.

3. The annual graduation rate.

4. The results of English language learners tests administered pursuant to section 15‑756, subsection B, section 15‑756.05 and section 15‑756.06.

F. Schools that offer instruction in all or a combination of the grades specified in subsections D and E of this section shall include a single achievement profile for that school that includes the school academic performance indicators specified in subsections D and E of this section.

G. Subject to final adoption by the state board of education, the department shall determine the criteria for each school classification using a research based methodology. The methodology shall include the performance of pupils at all achievement levels, account for pupil mobility, account for the distribution of pupil achievement at each school and include longitudinal indicators of academic performance. For the purposes of this subsection, "research based methodology" means the systematic and objective application of statistical and quantitative research principles to determine a standard measurement of acceptable academic progress for each school.

H. The achievement profile shall be used to determine a school classification that designates each school as one of the following:

1. An excelling school.

2. A highly performing school.

3. A performing school.

4. An underperforming school.

5. A school failing to meet academic standards.

I. The classification for each school and the criteria used to determine classification pursuant to subsection G of this section shall be included on the school report card prescribed in section 15‑746.

J. Subject to final adoption by the state board of education, the department of education shall develop a parallel achievement profile for accommodation schools, alternative schools as defined by the state board of education and extremely small schools as defined by the state board of education for the purposes of this section.

K. If a school is designated as an underperforming school, within ninety days after receiving notice of the designation, the governing board shall develop an improvement plan for the school, submit a copy of the plan to the superintendent of public instruction and supervise the implementation of the plan. The plan shall include necessary components as identified by the state board of education. Within thirty days after submitting the improvement plan to the superintendent of public instruction, the governing board shall hold a special public meeting in each school that has been designated as an underperforming school and shall present the respective improvement plans that have been developed for each school. The school district governing board, within thirty days of receiving notice of the designation, shall provide written notification of the classification to each residence within the attendance area of the school. The notice shall explain the improvement plan process and provide information regarding the public meeting required by this subsection.

L. A school that has not submitted an improvement plan pursuant to subsection K of this section is not eligible to receive monies from the classroom site fund established by section 15‑977 for every day that a plan has not been received by the superintendent of public instruction within the time specified in subsection K of this section plus an additional ninety days. The state board of education shall require the superintendent of the school district to testify before the board and explain the reasons that an improvement plan for that school has not been submitted.

M. If a charter school is designated as an underperforming school, within thirty days the school shall notify the parents of the students attending the school of the classification. The notice shall explain the improvement plan process and provide information regarding the public meeting required by this subsection. Within ninety days of receiving the classification, the charter holder shall present an improvement plan to the charter sponsor at a public meeting and submit a copy of the plan to the superintendent of public instruction. The improvement plan shall include necessary components as identified by the state board of education. For every day that an improvement plan is not received by the superintendent of public instruction, the school is not eligible to receive monies from the classroom site fund established by section 15‑977 for every day that a plan has not been received by the superintendent of public instruction within the time specified in subsection K of this section plus an additional ninety days. The charter holder shall appear before the sponsoring board and explain why the improvement plan has not been submitted.

N. The department of education shall establish an appeals process, to be approved by the state board of education, for a school to appeal data used to determine the achievement profile of the school. The criteria established shall be based on mitigating factors and may include a visit to the school site by the department of education.

O. If a school remains classified as an underperforming school for a third consecutive year, the department of education shall visit the school site to confirm the classification data and to review the implementation of the school's improvement plan. The school shall be classified as failing to meet academic standards unless an alternate classification is made after an appeal pursuant to subsection N of this section.

P. The school district governing board, within thirty days of receiving notice of the school failing to meet academic standards classification, shall provide written notification of the classification to each residence in the attendance area of the school. The notice shall explain the improvement plan process and provide information regarding the public meeting required by subsection S of this section.

Q. The superintendent of public instruction, based on need, shall assign a solutions team to an underperforming school, a school failing to meet academic standards or any other school pursuant to a mutual agreement between the department of education and the school comprised of master teachers, fiscal analysts and curriculum assessment experts who are certified by the state board of education as Arizona academic standards technicians. The department of education may hire or contract with administrators, principals and teachers who have demonstrated experience with the characteristics and situations in an underperforming school or a school failing to meet academic standards and may use these personnel as part of the solutions team. The department of education shall work with staff at the school to assist in curricula alignment and shall instruct teachers on how to increase pupil academic progress, considering the school's achievement profile. The solutions team shall consider the existing improvement plan to assess the need for changes to curriculum, professional development and resource allocation and shall present a statement of its findings to the school administrator and district superintendent. Within forty‑five days after the presentation of the solutions team's statement of findings, the school district governing board, in cooperation with each school within the school district that is designated an underperforming school and its assigned solutions team representative, shall develop and submit to the department of education an action plan that details the manner in which the school district will assist the school as the school incorporates the findings of the solutions team into the improvement plan. The department of education shall review the action plan and shall either accept the action plan or return the action plan to the school district for modification. If the school district does not submit an approved action plan within forty‑five days, the state board of education may direct the superintendent of public instruction to withhold up to ten per cent of state monies that the school district would otherwise be entitled to receive each month until the plan is submitted to the department of education, at which time those monies shall be returned to the school district.

R. The parent or the guardian of the pupil may apply to the department of education, in a manner determined by the department of education, for a certificate of supplemental instruction from the failing schools tutoring fund established by this section. Pupils attending a school designated as an underperforming school or a school failing to meet academic standards or a pupil who has failed to pass one or more portions of the Arizona instrument to measure standards test in grades eight through twelve in order to graduate from high school may select an alternative tutoring program in academic standards from a provider that is certified by the state board of education. To qualify, the provider must state in writing a level of academic improvement for the pupil that includes a timeline for improvement that is agreed to by the parent or guardian of the pupil. The state board of education shall annually review academic performance levels for providers certified pursuant to this subsection and may remove a provider at a public hearing from an approved list of providers if that provider fails to meet its stated level of academic improvement. The state board of education shall determine the application guidelines and the maximum value for each certificate of supplemental instruction. The state board of education shall annually complete a market survey in order to determine the maximum value for each certificate of supplemental instruction. Nothing in this subsection shall be construed to require the state to provide additional monies beyond the monies provided pursuant to section 42‑5029, subsection E, paragraph 7.

S. Within sixty days of receiving notification of designation as a school failing to meet academic standards, the school district governing board shall evaluate needed changes to the existing improvement plan for the school, consider recommendations from the solutions team, submit a copy of the plan to the superintendent of public instruction and supervise the implementation of the plan. Within thirty days after submitting the improvement plan to the superintendent of public instruction, the governing board shall hold a public meeting in each school that has been designated as a school failing to meet academic standards and shall present the respective improvement plans that have been developed for each school.

T. A school that has not submitted an improvement plan pursuant to subsection S of this section is not eligible to receive monies from the classroom site fund established by section 15‑977 for every day that a plan has not been received by the superintendent of public instruction within the time specified in subsection S of this section plus an additional ninety days. The state board of education shall require the superintendent of the school district to testify before the board and explain the reasons that an improvement plan for that school has not been submitted.

U. If a charter school is designated as a school failing to meet academic standards, the department of education shall immediately notify the charter school's sponsor. The charter school's sponsor shall either take action to restore the charter school to acceptable performance or revoke the charter school's charter. Within thirty days the school shall notify the parents of the students attending the school of the classification and of any pending public meetings to review the issue.

V. A school that has been designated as a school failing to meet academic standards shall be evaluated by the department of education to determine if the school failed to properly implement its school improvement plan, align the curriculum with academic standards, provide teacher training, prioritize the budget or implement other proven strategies to improve academic performance. After visiting the school site pursuant to subsection O of this section, the department of education shall submit to the state board of education a recommendation to proceed pursuant to subsections Q, R and S of this section or that the school be subject to a public hearing to determine if the school failed to properly implement its improvement plan and the reasons for the department's recommendation.

W. If the department does recommend a public hearing, the state board of education shall meet and may provide by a majority vote at the public hearing for the continued operation of the school as allowed by this subsection. The state board of education shall determine whether governmental, nonprofit and private organizations may submit applications to the state board to fully or partially manage the school. The state board's determination shall include:

1. If and to what extent the local governing board may participate in the operation of the school including personnel matters.

2. If and to what extent the state board of education shall participate in the operation of the school.

3. Resource allocation pursuant to subsection Y of this section.

4. Provisions for the development and submittal of a school improvement plan to be presented in a public meeting at the school.

5. A suggested time frame for the alternative operation of the school.

X. The state board shall periodically review the status of a school that is operated by an organization other than the school district governing board to determine whether the operation of the school should be returned to the school district governing board. Before the state board makes a determination, the state board or its designee shall meet with the school district governing board or its designee to determine the time frame, operational considerations and the appropriate continuation of existing improvements that are necessary to assure a smooth transition of authority from the other organization back to the school district governing board.

Y. If an alternative operation plan is provided pursuant to subsection W of this section, the state board of education shall pay for the operation of the school and shall adjust the school district's student count pursuant to section 15‑902, soft capital allocation pursuant to section 15‑962, capital outlay revenue limit pursuant to section 15‑961, base support level pursuant to section 15‑943, monies distributed from the classroom site fund established by section 15‑977 and transportation support level pursuant to section 15‑945 to accurately reflect any reduction in district services that are no longer provided to that school by the district. The state board of education may modify the school district's revenue control limit, the district support level and the general budget limit calculated pursuant to section 15‑947 by an amount that corresponds to this reduction in services. The state board of education shall retain the portion of state aid that would otherwise be due the school district for the school and shall distribute that portion of state aid directly to the organization that contracts with the state board of education to operate the school.

Z. If the state board of education determines that a charter school failed to properly implement its improvement plan, the sponsor of the charter school shall revoke the charter school's charter.

AA. If there are more than two schools in a district and more than one‑half, or in any case more than five, of the schools in the district are designated as schools failing to meet academic standards for more than two consecutive years, in the next election of members of the governing board the election ballot shall contain the following statement immediately above the listing of governing board candidates:

Within the last five years, (number of schools) schools in the ________ school district have been designated as "schools failing to meet academic standards" by the superintendent of public instruction.

BB. At least twice each year the department of education shall publish in a newspaper of general circulation in each county of this state a list of schools that are designated as schools failing to meet academic standards.

CC. The failing schools tutoring fund is established consisting of monies collected pursuant to section 42‑5029, subsection E as designated for this purpose. The department of education shall administer the fund. The department of education may use monies from the fund to purchase materials designed to assist students to meet the Arizona academic standards and to achieve a passing score on the Arizona instrument to measure standards test in order to graduate from high school.

DD. The department of education may develop a classification label for school districts and charter school operators. If the department of education develops a classification label for school districts and charter school operators, the classification label may be developed from the following components:

1. Measures of academic progress.

2. Pupil assessment data.

3. The attendance rates and graduation rates of pupils who are educated in that charter school operator's charter schools or in that school district's schools.

4. The percentage of the parents of pupils enrolled in that charter school operator's charter schools or in that school district's schools that categorizes the quality of their child's education as excellent on a parental rating of school quality. END_STATUTE

Sec. 5. Section 15-349, Arizona Revised Statutes, is amended to read:

START_STATUTE15-349. Operation of motor vehicle fleet; options to conventional fuels

A. The governing board of a school district with an average daily membership attendance as defined in section 15‑901 of more than three thousand that is located within or that has bus routes running within area A as defined in section 49‑541 shall develop and implement, subject to the availability of a state air quality funding source, a vehicle fleet plan for vehicles with a gross vehicle weight rating of at least seventeen thousand five hundred pounds for the purpose of encouraging the use of fuels listed pursuant to this subsection in school district owned vehicles. The plan shall provide for at least fifty per cent of the fleet with a gross vehicle weight rating of at least seventeen thousand five hundred pounds to operate on any of the following by December 31, 2004, and each year thereafter:

1. Alternative fuels or clean burning fuels as defined in section 1‑215.

2. Ultra low sulfur diesel fuel as defined in section 49‑558.01 that is used in an engine with an emission control device.

3. Vehicles powered by an engine that meets or exceeds an emission standard for diesel particulate matter of 0.05 grams per brake horsepower hour.

B. Engine retrofits or conversions meet the requirements of subsection A of this section if they have been approved for use by any one of the following:

1. The United States environmental protection agency voluntary retrofit program.

2. The United States environmental protection agency verification protocol for retrofit catalyst particulate filter and engine modification control technologies for highway and nonroad use diesel engines.

3. The California air resources board diesel emission control strategy verification procedure.

4. Sections 43100 and 43102 of the health and safety code of the state of California.

5. Actual emission testing performed on the vehicle.

C. This section does not preclude a school district from using any local, federal or private funding sources that may be available in order to comply with the requirements of this section.

D. If the requirements of subsection A of this section are met by the use of clean burning fuel as defined in section 1-215, vehicle equivalents under those requirements shall be calculated as follows:

1. One vehicle equivalent for every four hundred fifty gallons of neat biodiesel or two thousand two hundred fifty gallons of a diesel fuel substitute prescribed in section 1-215, paragraph 7, subdivision (b).

2. One vehicle equivalent for every five hundred thirty gallons of the fuel prescribed in section 1-215, paragraph 7, subdivision (d). END_STATUTE

Sec. 6. Section 15-393, Arizona Revised Statutes, is amended to read:

START_STATUTE15-393. Joint technological education district governing board; report; definition

A. The management and control of the joint district are vested in the joint technological education district governing board, including the content and quality of the courses offered by the district, the quality of teachers who provide instruction on behalf of the district, the salaries of teachers who provide instruction on behalf of the district and the reimbursement of other entities for the facilities used by the district. Unless the governing boards of the school districts participating in the formation of the joint district vote to implement an alternative election system as provided in subsection B of this section, the joint board shall consist of five members elected from five single member districts formed within the joint district. The single member district election system shall be submitted as part of the plan for the joint district pursuant to section 15‑392 and shall be established in the plan as follows:

1. The governing boards of the school districts participating in the formation of the joint district shall define the boundaries of the single member districts so that the single member districts are as nearly equal in population as is practicable, except that if the joint district lies in part in each of two or more counties, at least one single member district may be entirely within each of the counties comprising the joint district if this district design is consistent with the obligation to equalize the population among single member districts.

2. The boundaries of each single member district shall follow election precinct boundary lines, as far as practicable, in order to avoid further segmentation of the precincts.

3. A person who is a registered voter of this state and who is a resident of the single member district is eligible for election to the office of joint board member from the single member district. The terms of office of the members of the joint board shall be as prescribed in section 15‑427, subsection B. An employee of a joint technological education district or the spouse of an employee shall not hold membership on a governing board of a joint technological education district by which the employee is employed. A member of one school district governing board or joint technological education district governing board is ineligible to be a candidate for nomination or election to or serve simultaneously as a member of any other governing board, except that a member of a governing board may be a candidate for nomination or election for any other governing board if the member is serving in the last year of a term of office. A member of a governing board shall resign the member's seat on the governing board before becoming a candidate for nomination or election to the governing board of any other school district or joint technological education district, unless the member of the governing board is serving in the last year of a term of office.

4. Nominating petitions shall be signed by the number of qualified electors of the single member district as provided in section 16‑322.

B. The governing boards of the school districts participating in the formation of the joint district may vote to implement any other alternative election system for the election of joint district board members. If an alternative election system is selected, it shall be submitted as part of the plan for the joint district pursuant to section 15‑392, and the implementation of the system shall be as approved by the United States justice department.

C. The joint technological education district shall be subject to the following provisions of this title:

1. Chapter 1, articles 1 through 6.

2. Sections 15‑208, 15‑210, 15‑213 and 15‑234.

3. Articles 2, 3 and 5 of this chapter.

4. Section 15‑361.

5. Chapter 4, articles 1, 2 and 5.

6. Chapter 5, articles 1, 2 and 3.

7. Sections 15‑701.01, 15‑722, 15‑723, 15‑724, 15‑727, 15‑728, 15‑729 and 15‑730.

8. Chapter 7, article 5.

9. Chapter 8, articles 1, 3 and 4.

10. Sections 15‑828 and 15‑829.

11. Chapter 9, article 1, article 6, except for section 15‑995, and article 7.

12. Sections 15‑941, 15‑943.01, 15‑948, 15‑952, 15‑953 and 15‑973.

13. Sections 15‑1101 and 15‑1104.

14. Chapter 10, articles 2, 3, 4 and 8.

D. Notwithstanding subsection C of this section, the following apply to a joint technological education district:

1. A joint district may issue bonds for the purposes specified in section 15‑1021 and in chapter 4, article 5 of this title to an amount in the aggregate, including the existing indebtedness, not exceeding one per cent of the taxable property used for secondary tax purposes, as determined pursuant to title 42, chapter 15, article 1, within the joint technological education district as ascertained by the last property tax assessment previous to issuing the bonds.

2. The number of governing board members for a joint district shall be as prescribed in subsection A of this section.

3. If a career and technical education and vocational education course or program provided pursuant to this article is provided in a facility owned or operated by a school district in which a pupil is enrolled, including satellite courses, the sum of the daily attendance, as provided in section 15‑901, subsection A, paragraph 6 5, for that pupil in both the school district and joint technological education district shall not exceed 1.25 and the sum of the fractional student enrollment, as provided in section 15‑901, subsection A, paragraph 2 1, subdivision (a), shall not exceed 1.25 for the courses taken in the school district and the facility, including satellite courses. The school district and the joint district shall determine the apportionment of the daily attendance and fractional student enrollment for that pupil between the school district and the joint district.

4. The student count for the first year of operation of a joint technological education district as provided in this article shall be determined as follows:

(a) Determine the estimated student count for joint district classes that will operate in the first year of operation. This estimate shall be based on actual registration of pupils as of March 30 scheduled to attend classes that will be operated by the joint district. The student count for the district of residence of the pupils registered at the joint district shall be adjusted. The adjustment shall cause the district of residence to reduce the student count for the pupil to reflect the courses to be taken at the joint district. The district of residence shall review and approve the adjustment of its own student count as provided in this subdivision before the pupils from the school district can be added to the student count of the joint district.

(b) The student count for the new joint district shall be the student count as determined in subdivision (a) of this paragraph.

(c) After the first one hundred days or two hundred days in session, as applicable, for the first year of operation, the joint district shall revise the student count to the actual student count for students attending classes in the joint district. A joint district shall revise its student count, the base support level as provided in section 15‑943.02, the revenue control limit as provided in section 15‑944.01, the capital outlay revenue limit and the soft capital allocation as provided in section 15‑962.01 prior to May 15. A joint district that overestimated its student count shall revise its budget prior to May 15. A joint district that underestimated its student count may revise its budget prior to May 15.

(d) After the first one hundred days or two hundred days in session, as applicable, for the first year of operation, the district of residence shall adjust its student count by reducing it to reflect the courses actually taken at the joint district. The district of residence shall revise its student count, the base support level as provided in section 15‑943, the revenue control limit as provided in section 15‑944, the capital outlay revenue limit as provided in section 15‑961 and the soft capital allocation as provided in section 15‑962 prior to May 15. A district that underestimated the student count for students attending the joint district shall revise its budget prior to May 15. A district that overestimated the student count for students attending the joint district may revise its budget prior to May 15.

(e) A joint district for the first year of operation shall not be eligible for adjustment pursuant to section 15‑948.

(f) The procedures for implementing this paragraph shall be as prescribed in the uniform system of financial records.

(g) If the district of residence utilizes section 15‑942 to determine its student count, the district shall reduce its student count as provided in this paragraph by subtracting the appropriate count from the student count determined as provided in section 15‑942.

For the purposes of this paragraph, "district of residence" means the district that included the pupil in its average daily membership attendance for the year before the first year of operation of the joint district and that would have included the pupil in its student count for the purposes of computing its base support level for the fiscal year of the first year of operation of the joint district if the pupil had not enrolled in the joint district.

5. A student includes any person enrolled in the joint district without regard to the person's age or high school graduation status, except that:

(a) A student in a kindergarten program or in grades one through eight who enrolls in courses offered by the joint technological education district shall not be included in the joint district's average daily attendance or average daily membership.

(b) A student in a kindergarten program or in grades one through eight who is enrolled in vocational education courses shall not be funded in whole or in part with monies provided by a joint technological education district.

(c) A student who is over twenty‑two years of age shall not be included in the student count of the joint district for the purposes of chapter 9, articles 3, 4 and 5 of this title.

(d) A student in grade nine who enrolls in a career exploration course shall not be included in the joint district's average daily attendance or average daily membership.

6. A joint district may operate for more than one hundred seventy‑five days per year, with expanded hours of service.

7. A joint district may use the excess utility costs provisions of section 15‑910 in the same manner as a school district for fiscal years 1999‑2000 and 2000‑2001, except that the base year shall be the first full fiscal year of operations.

8. A joint district may use the carryforward provisions of section 15‑943.01 retroactively to July 1, 1993.

9. A school district that is part of a joint district shall use any monies received pursuant to this article to supplement and not supplant base year career and technical education and vocational education courses, and directly related equipment and facilities, except that a school district that is part of a joint technological education district and that has used monies received pursuant to this article to supplant career and technological education and vocational education courses that were offered before the first year that the school district participated in the joint district or the first year that the school district used monies received pursuant to this article or that used the monies for purposes other than for career and technological education and vocational education courses shall:

(a) Use at least thirty‑three per cent of the monies received pursuant to this article in fiscal year 2005‑2006 to supplement and not supplant base year career and technical education and vocational education courses.

(b) Use at least sixty‑six per cent of the monies received pursuant to this article in fiscal year 2006‑2007 to supplement and not supplant base year career and technical education and vocational education courses.

(c) use one hundred per cent of the monies received pursuant to this article in fiscal year 2007‑2008 and each fiscal year thereafter to supplement and not supplant base year career and technical education and vocational education courses.

10. A joint technological education district shall use any monies received pursuant to this article to enhance and not supplant career and technical education and vocational education courses and directly related equipment and facilities.

11. A joint technological education district or a school district that is part of a joint district shall only include pupils in grades nine through twelve in the calculation of average daily membership or average daily attendance if the pupils are enrolled in courses that are approved jointly by the governing board of the joint technological education district and each participating school district for satellite courses taught within the participating school district, or approved solely by the joint technological education district for centrally located courses. Average daily membership and Average daily attendance from courses that are not part of an approved program for career and technical education shall not be included in average daily membership and average daily attendance of a joint technological education district. A student in grade nine who enrolls in a career exploration course shall not be included in the joint district's average daily attendance or average daily membership.

E. The joint board shall appoint a superintendent as the executive officer of the joint district.

F. Taxes may be levied for the support of the joint district as prescribed in chapter 9, article 6 of this title, except that a joint technological education district shall not levy a property tax pursuant to law that exceeds five cents per one hundred dollars assessed valuation except for bond monies pursuant to subsection D, paragraph 1 of this section. Except for the taxes levied pursuant to section 15‑994, such taxes shall be obtained from a levy of taxes on the taxable property used for secondary tax purposes.

G. The schools in the joint district are available to all persons who reside in the joint district subject to the rules for admission prescribed by the joint board.

H. The joint board may collect tuition for adult students and the attendance of pupils who are residents of school districts that are not participating in the joint district pursuant to arrangements made between the governing board of the district and the joint board.

I. The joint board may accept gifts, grants, federal monies, tuition and other allocations of monies to erect, repair and equip buildings and for the cost of operation of the schools of the joint district.

J. One member of the joint board shall be selected chairman. The chairman shall be selected annually on a rotation basis from among the participating school districts. The chairman of the joint board shall be a voting member.

K. A joint board and a community college district may enter into agreements for the provision of administrative, operational and educational services and facilities.

L. Any agreement between the governing board of a joint technological education district and another joint technological education district, a school district, a charter school or a community college district shall be in the form of an intergovernmental agreement or other written contract. The auditor general shall modify the uniform system of financial records and budget forms in accordance with this subsection. The intergovernmental agreement or other written contract shall completely and accurately specify each of the following:

1. The financial provisions of the intergovernmental agreement or other written contract and the format for the billing of all services.

2. The accountability provisions of the intergovernmental agreement or other written contract.

3. The responsibilities of each joint technological education district, each school district, each charter school and each community college district that is a party to the intergovernmental agreement or other written contract.

4. The type of instruction that will be provided under the intergovernmental agreement or other written contract.

5. The quality of the instruction that will be provided under the intergovernmental agreement or other written contract.

6. The transportation services that will be provided under the intergovernmental agreement or other written contract and the manner in which transportation costs will be paid.

7. The amount that the joint technological education district will contribute to a course and the amount of support required by the school district or the community college.

8. That the services provided by the joint technological education district, the school district, the charter school or the community college district be proportionally calculated in the cost of delivering the service.

9. That the payment for services shall not exceed the cost of the services provided.

10. That any initial intergovernmental agreement or other written contract and any addendums between the governing board of a joint technological education district and another joint technological education district, a school district, a charter school or a community college district be submitted by the joint technological education district to the joint legislative budget committee for review.

M. On or before December 31 of each year, each joint technological education district shall submit a detailed report to the career and technical education division of the department of education. The career and technical education division of the department of education shall collect, summarize and analyze the data submitted by the joint districts, shall submit an annual report that summarizes the data submitted by the joint districts to the governor, the speaker of the house of representatives, the president of the senate and the state board of education and shall submit a copy of this report to the secretary of state and the director of the Arizona state library, archives and public records. The data submitted by each joint technological education district shall include the following:

1. The average daily membership attendance of the joint district.

2. The course listings and course descriptions of courses offered by the joint district.

3. The costs associated with each course offered by the joint district.

4. The completion rate for each course offered by the joint district.

5. The graduation rate of students enrolled in the joint district.

6. A detailed description of the career opportunities available to students after completion of the program offered by the joint district.

7. A detailed description of the career placement of students who have completed the program offered by the joint district.

8. Any other data deemed necessary by the department of education to carry out its duties under this subsection.

N. If the career and technical education division of the department of education determines that a course does not meet the criteria for approval as a joint technical education course, the governing board of the joint technological education district may appeal this decision to the state board of education acting as the state board of vocational education.

O. Notwithstanding any other law, the average daily membership attendance of a pupil who is enrolled in a course that meets for at least one hundred fifty minutes per class period at a centralized campus owned and operated by a joint technological education district shall be 0.75.

P. For the purposes of this section, "base year" means the complete school year in which voters of a school district elected to join a joint technological education district. END_STATUTE

Sec. 7. Section 15-431, Arizona Revised Statutes, is amended to read:

START_STATUTE15-431. Alternative election procedure of governing board members

A. If, for the prior school year, a school district had an average daily membership attendance of at least one thousand and the total minority enrollment in the district, as reported to the department of education, was at least twenty‑five per cent of the total enrollment of the district, the governing board may vote to implement an alternative election system for the election of governing board members. The alternative election system implemented by the board may include a vote by the board to divide the school district into as many single member districts as there are governing board members or a vote by the board to implement any other election method that is consistent with section 2 of the voting rights act of 1965 (42 United States Code section 1973), as amended. A school district that has implemented an alternative election system for the election of governing board members as provided by this subsection may continue to elect governing board members using the alternative election system even if the average daily membership attendance of the school district or percentage of minority pupils enrolled in the district falls below the levels prescribed in this subsection. If the average daily membership attendance of the school district or percentage of minority pupils enrolled in the district falls below the levels prescribed in this subsection, the governing board may vote to elect governing board members using the at large election method as prescribed in section 15‑429.

B. If the governing board of a school district has implemented a single member district election system as provided in subsection A of this section, the system shall be implemented as follows:

1. The governing board shall define the boundaries of the single member district so that the single member districts are as nearly equal in population as is practicable, except that if the school district lies in part in each of two or more counties, at least one single member district may be entirely within each of the counties comprising the school district if this district design is consistent with the obligation to equalize the population among single member districts.

2. The boundaries of the single member district shall follow election precinct boundary lines, as far as practicable, in order to avoid further segmentation of the precincts.

3. A number shall be assigned to each of the new single member districts in ascending order according to the percentage of the district's minority population in each single member district.

4. As the terms of the governing board members who were elected at large expire, the members shall be replaced by members who are elected from the single member districts in ascending order of single member district number.

5. A person who is a registered voter of this state and who is a resident of the single member district is eligible for election to the office of school board member from the single member district.

6. Nominating petitions shall be signed by the number of qualified electors of the single member district as provided in section 16‑322.

C. If the governing board has voted to implement any other alternative election system for the election of governing board members, as provided in subsection A of this section, the implementation of the system shall be as approved by the United States justice department. END_STATUTE

Sec. 8. Section 15-448, Arizona Revised Statutes, is amended to read:

START_STATUTE15-448. Formation of unified school district; board membership; budget

A. One or more common school districts and a high school district with coterminous or overlapping boundaries may establish a unified school district pursuant to this section. Unification of a common school district and a high school district is not authorized by this section if any of the high school facilities owned by the new unified school district would not be located within its boundaries.

B. Formation of a unified school district shall be by resolutions approved by the governing boards of the unifying school districts and certification of approval by such governing boards to the county school superintendent of the county or counties in which such individual school districts are located. A common school district and high school district that unify pursuant to this section shall not exclude from the same unification a common school district that has overlapping boundaries with the high school district and that wishes to unify. The formation of a unified school district shall become effective on July 1 of the next fiscal year following the certification of the county school superintendent. An election shall not be required to form a unified school district pursuant to this section. At least ninety days before the governing boards vote on the resolutions prescribed in this subsection, the governing boards shall mail a pamphlet to each household with one or more qualified electors that shall list the full cash value, the assessed valuation and the estimated amount of the primary property taxes and the estimated amount of the secondary property taxes under the proposed unification for each of the following:

1. An owner occupied residence whose assessed valuation is the average assessed valuation of property classified as class three, as prescribed by section 42-12003 for the current year in the school district.

2. An owner occupied residence whose assessed valuation is one-half of the assessed valuation of the residence in paragraph 1 of this subsection.

3. An owner occupied residence whose assessed valuation is twice the assessed valuation of the residence in paragraph 1 of this subsection.

4. A business whose assessed valuation is the average of the assessed valuation of property classified as class one, as prescribed by section 42‑12001, paragraphs 12 and 13 for the current year in the school district.

C. The boundaries of the unified school district shall be the boundaries of the former common school district or districts that unify. The boundaries of the common school district or districts that are not unifying remain unchanged. The county school superintendent, immediately upon receipt of the approved resolutions prescribed by subsection B of this section, shall file with the board of supervisors, the county assessor and the superintendent of public instruction a transcript of the boundaries of the unified school district. The boundaries shown in the transcript shall become the legal boundaries of the school districts on July 1 of the next fiscal year.

D. On formation of the unified school district, the governing board consists of the members of the former school district governing boards and the members shall hold office until January 1 following the first general election after formation of the district.

E. Beginning on January 1 following the first general election after formation of the unified school district, the governing board shall have five members. At the first general election after the formation of the district, members shall be elected in the following manner:

1. The three candidates receiving the highest, the second highest and the third highest number of votes shall be elected to four year terms.

2. The two candidates receiving the fourth and fifth highest number of votes shall be elected to two year terms. Thereafter all offices shall have four year terms.

F. The new unified school district may appoint a resident of the remaining common school district to serve as a nonvoting member of the governing board to represent the interests of the high school pupils who reside in the remaining common school district and who attend school in the unified school district.

G. For the first year of operation, the unified school district governing board shall prepare a consolidated budget based on the student counts from the school districts comprising the unified school district, except that for purposes of determining budget amounts and equalization assistance, the student count for the former high school district shall not include the prior year average daily membership attendance attributable to high school pupils from a common school district that was part of the former high school district but is not part of the unified school district. The unified school district shall charge the remaining common school district tuition for these pupils as provided in subsection J of this section and shall not include such pupils for the purpose of making any adjustment for rapid decline in student count pursuant to section 15‑942. The unified school district may budget for unification assistance pursuant to section 15‑912.01.

H. The governing board of the unified school district shall prepare policies, curricula and budgets for the district. These policies shall require that:

1. The base compensation of each certificated teacher for the first year of operation of the new unified school district shall not be lower than the certificated teacher's base compensation for the prior year in the previously existing school districts.

2. The certificated teacher's years of employment in the previously existing school districts shall be included in determining the teacher's certificated years of employment in the new unified school district.

I. Upon formation of a unified school district any existing override authorization of the former high school district and the former common school district or districts shall continue until expiration based on the revenue control limit of the school district or districts that had override authorization prior to unification. The unified school district may request new override authorization for the budget year as provided in section 15‑481 based on the combined revenue control limit of the new district after unification. If the unified school district's request for override authorization is approved, it will replace any existing override for the budget year.

J. The unified school district shall admit high school pupils who reside in a common school district that was located within the boundaries of the former high school district. Tuition shall be paid to the unified school district by the common school district in which such pupils reside. Such tuition amount shall be calculated in accordance with section 15‑824, subject to the following modifications:

1. If the former high school district had outstanding bonded indebtedness at the time of unification, the combined tuition for the group of high school pupils who reside in each common school district shall include a debt service amount for the former high school district's outstanding bonded indebtedness that is determined as follows:

(a) Divide the total secondary assessed valuation of the common school district in which the group of pupils reside resides by the total secondary assessed valuation of the former high school district. For the purposes of this subdivision, "secondary assessed valuation" means secondary assessed valuation for the tax year prior to the year when the unification occurs and includes the values used to determine voluntary contributions collected pursuant to title 9, chapter 4, article 3 and title 48, chapter 1, article 8.

(b) Multiply the quotient obtained in subdivision (a) by the unified school district's annual debt service expenditure.

2. The debt service portion of such tuition payments calculated pursuant to paragraph 1 of this subsection shall be used exclusively for debt service of the outstanding bonded indebtedness of the former high school district. When such indebtedness is fully extinguished, the debt service portion of a pupil's tuition shall be determined in accordance with paragraph 3 of this subsection.

3. If the former high school district had no outstanding bonded indebtedness at the time of unification, the tuition calculation shall include the actual school district expenditures for the portion of any debt service of the unified school district that pertains to any construction or renovation of high school facilities divided by the school district's student count for the high school portion of the school district.

4. The unified school district shall not include in the tuition calculation any debt service that pertains to any construction or renovation of school facilities for preschool through grade eight.

5. Notwithstanding section 15‑951, subsection H, the revenue control limit of the common school district shall include the full amount of the debt service portion of the tuition calculated pursuant to this subsection.

K. All assets and liabilities of the unifying school districts shall be transferred and assumed by the new unified school district. Any existing bonded indebtedness of a common school district or a high school district unifying pursuant to this section shall be assumed by the new unified school district and shall be regarded as an indebtedness of the new unified school district for the purpose of determining the debt incurring authority of the district. Taxes for the payment of such bonded indebtedness shall be levied on all taxable property in the new unified school district, but nothing in this subsection shall be construed to relieve from liability to taxation for the payment of all taxable property of the former high school district if necessary to prevent a default in the payment of any bonded indebtedness of the former high school district. The residents of a common school district that does not unify shall not vote in bond or override elections of the unified school district and shall not be assessed taxes as a result of a bond or override election of the unified school district.

L. If the remaining common school district had authorization for an override as provided in section 15‑481 or 15‑482, the override authorization continues for the remaining common school district or districts in the same manner as before the formation of the unified school district.

M. The bonding authorization and bonding limitations continue for the remaining common school district or districts in the same manner as before the formation of the unified school district.

N. Nothing in this section shall be construed to relieve a school district formed pursuant to section 15‑457 or 15‑458 of its liability for any outstanding bonded indebtedness.

0. For school districts that become unified after July 1, 2004 and where all of the common schools were eligible for the small school district weight pursuant to section 15‑943, paragraph 1, subdivision (a) when computing their base support level and base revenue control limit before unification, the unified school district may continue to use the small school district weight as follows:

1. Annually determine the common school student count and the weighted student count pursuant to section 15‑943, paragraph 1, subdivision (a) for each common school district before unification.

2. Calculate the sum of the common school districts' student counts and weighted student counts determined in paragraph 1 of this subsection.

3. Divide the sum of the weighted student counts by the sum of the student counts determined in paragraph 2 of this subsection.

4. The amount determined in paragraph 3 of this subsection shall be the weight for the common schools in the unified school district.

P. A unified school district may calculate its revenue control limit and district support level by using subsection O of this section as follows:

1. Determine the number of individual school districts that existed before unification into a single school district.

2. Multiply the amount determined in paragraph 1 of this subsection by six hundred.

3. Multiply the amount determined in paragraph 2 of this subsection by 0.80.

4. If the amount determined in paragraph 3 of this subsection exceeds the student count of the unified school district, the unified school district is eligible to use subsection O of this section.

Q. Subsections O and P of this section shall remain in effect until the aggregate student count of the common school districts before unification exceeds the aggregate number of students of the common school districts before unification authorized to utilize section 15‑943, paragraph 1, subdivision (a). END_STATUTE

Sec. 9. Section 15-746, Arizona Revised Statutes, is amended to read:

START_STATUTE15-746. School report cards

A. Each school shall distribute an annual report card that contains at least the following information:

1. A description of the school's regular, magnet and special instructional programs.

2. A description of the current academic goals of the school.

3. A summary of the results achieved by pupils enrolled at the school during the prior three school years as measured by the Arizona instrument to measure standards test and the nationally standardized norm‑referenced achievement test as designated by the state board and as reported in the annual report prescribed by section 15‑743, a summary of the pupil progress on an ongoing and annual basis, showing the trends in gain or loss in pupil achievement over time in reading, language arts and mathematics for all years in which pupils are enrolled in the school district for an entire school year and for which this information is available and a summary of the pupil progress for pupils not enrolled in a district for an entire school year.

4. The school's current expenditures per pupil for classroom supplies, classroom instruction excluding classroom supplies, administration, support services‑students, and all other support services and operations. The current expenditures per pupil by school shall include allocation of the district‑wide expenditures to each school, as provided by the district. The report shall include a comparison of the school to the state amount for a similar type of district as calculated in section 15‑255. The method of calculating these per pupil amounts and the allocation of expenditures shall be as prescribed in the uniform system of financial records.

5. The attendance rate of pupils enrolled at the school as reflected in the school's average daily membership attendance as defined in section 15‑901.

6. The total number of incidents that occurred on the school grounds, at school bus stops, on school buses and at school sponsored events and that required the contact of a local, county, tribal, state or federal law enforcement officer pursuant to section 13‑3411, subsection F, section 13‑3620, section 15‑341, subsection A, paragraph 31 or section 15‑515. The total number of incidents reported shall only include reports that law enforcement officers report to the school are supported by probable cause. For the purposes of this paragraph, a certified peace officer who serves as a school resource officer is a law enforcement officer. A school may provide clarifying information if the school has a school resource officer on campus.

7. The percentage of pupils who have either graduated to the next grade level or graduated from high school.

8. A description of the social services available at the school site.

9. The school calendar, including the length of the school day and hours of operations.

10. The total number of pupils enrolled at the school during the previous school year.

11. The transportation services available.

12. Beginning in the 2000‑2001 school year and until July 1, 2006, the reading instruction programs used by the school for kindergarten programs and grades one, two and three, pursuant to section 15‑704. The report card shall include a district comparison of test scores among the different programs of reading instruction and shall identify the program of reading instruction used in each classroom.

13. A description of the responsibilities of parents of children enrolled at the school.

14. A description of the responsibilities of the school to the parents of the children enrolled at the school, including dates the report cards are delivered to the home.

15. A description of the composition and duties of the school council as prescribed in section 15‑351 if such a school council exists.

16. For the most recent year available, the average current expenditure per pupil for administrative functions compared to the predicted average current expenditure per pupil for administrative functions according to an analysis of administrative cost data by the joint legislative budget committee staff.

17. If the school provides instruction to pupils in kindergarten programs and grades one through three, the ratio of pupils to teachers in each classroom where instruction is provided in kindergarten programs and grades one through three.

18. The average class size per grade level for all grade levels, kindergarten programs and grades one through eight. For the purposes of this paragraph, "average class size" means the weighted average of each class.

B. The department of education shall develop a standardized report card format that meets the requirements of subsection A of this section. The department shall modify the standardized report card as necessary on an annual basis. The department shall distribute to each school in this state a copy of the standardized report card that includes the required test scores for each school. Additional copies of the standardized report card shall be available on request.

C. After each school has completed the report card distributed to it by the department of education, the school, in addition to distributing the report card as prescribed in subsection A of this section, shall send a copy of the report card to the department. The department shall prepare an annual report that contains the report card from each school in this state.

D. The school shall distribute report cards to parents of pupils enrolled at the school, no later than the last day of school of each fiscal year, and shall present a summary of the contents of the report cards at an annual public meeting held at the school. The school shall give notice at least two weeks before the public meeting that clearly states the purposes, time and place of the meeting. END_STATUTE

Sec. 10. Section 15-771, Arizona Revised Statutes, is amended to read:

START_STATUTE15-771. Preschool programs for children with disabilities; definition

A. Each school district shall make available an educational program for preschool children with disabilities who reside in the school district and who are not already receiving services that have been provided through the department of education. The state board of education shall prescribe rules for use by school districts in the provision of educational programs for preschool children with disabilities. School districts are required to make available educational programs for and, for the purposes of calculating average daily attendance and average daily membership, may count only those preschool children who meet the definition of one of the following conditions:

1. Hearing impairment.

2. Visual impairment.

3. Developmental delay.

4. Preschool severe delay.

5. Speech/language impairment.

B. The state board of education shall annually distribute to school districts at least ten per cent of the monies it receives under 20 United States Code section 1411(c)(2) for preschool programs for children with disabilities. The state board shall prescribe rules for the distribution of the monies to school districts.

C. The governing board of a school district may submit a proposal to the state board of education as prescribed by the state board to receive monies for preschool programs for children with disabilities as provided in this section. A school district which receives monies as provided in this section shall include the monies in the special projects section of the budget as provided in section 15‑903, subsection F.

D. All school districts shall cooperate, if appropriate, with community organizations that provide services to preschool children with disabilities in the provision of the district's preschool program for children with disabilities.

E. A school district may not admit a child to a preschool program for children with disabilities unless the child is evaluated and recommended for placement as provided in sections 15‑766 and 15‑767.

F. For the purpose of allocating monies pursuant to 20 United States Code section 1419(g)(1)(B)(i), "jurisdiction" includes high school pupils whose parents reside within the boundaries of a common school district. The common school district shall ensure such high school pupils are not counted by any other school district.

G. For the purposes of this section, "preschool child" means a child who is at least three years of age but who has not reached the age required for kindergarten. A preschool child is three years of age as of the date of the child's third birthday. The governing board of a school district may admit otherwise eligible children who are within ninety days of their third birthday, if it is determined to be in the best interest of the individual child. Children who are admitted to programs for preschool children prior to their third birthday are entitled to the same provision of services as if they were three years of age. END_STATUTE

Sec. 11. Section 15-803, Arizona Revised Statutes, is amended to read:

START_STATUTE15-803. School attendance; exemptions; definitions

A. It is unlawful for any child who is between six and sixteen years of age to fail to attend school during the hours school is in session, unless either:

1. The child is excused pursuant to section 15‑802, subsection D or section 15‑901, subsection A, paragraph 6 5, subdivision (c).

2. The child is accompanied by a parent or a person authorized by a parent.

3. The child is provided with instruction in a home school.

B. A child who is habitually truant or who has excessive absences may be adjudicated an incorrigible child as defined in section 8‑201. Absences may be considered excessive when the number of absent days exceeds ten per cent of the number of required attendance days prescribed in section 15‑802, subsection B, paragraph 1.

C. As used in For the purposes of this section:

1. "Habitually truant" means a truant child who is truant for at least five school days within a school year.

2. "Truant" means an unexcused absence for at least one class period during the day.

3. "Truant child" means a child who is between six and sixteen years of age and who is not in attendance at a public or private school during the hours that school is in session, unless excused as provided by this section. END_STATUTE

Sec. 12. Section 15-808, Arizona Revised Statutes, is amended to read:

START_STATUTE15-808. Arizona online instruction; reports; definitions

A. Arizona online instruction shall be instituted to meet the needs of pupils in the information age. The state board of education shall select traditional public schools and the state board for charter schools shall sponsor charter schools to be online course providers or online schools. The state board of education and the state board for charter schools shall jointly develop standards for the approval of online course providers and online schools based on the following criteria:

1. The depth and breadth of curriculum choices.

2. The variety of educational methodologies employed by the school and the means of addressing the unique needs and learning styles of targeted pupil populations, including computer assisted learning systems, virtual classrooms, virtual laboratories, electronic field trips, electronic mail, virtual tutoring, online help desk, group chat sessions and noncomputer based activities performed under the direction of a certificated teacher.

3. The availability of an intranet or private network to safeguard pupils against predatory and pornographic elements of the internet.

4. The availability of filtered research access to the internet.

5. The availability of private individual electronic mail between pupils, teachers, administrators and parents in order to protect the confidentiality of pupil records and information.

6. The availability of faculty members who are experienced with computer networks, the internet and computer animation.

7. The extent to which the school intends to develop partnerships with universities, community colleges and private businesses.

8. The services offered to developmentally disabled populations.

9. The grade levels that will be served.

B. Each new school that provides online instruction shall provide online instruction on a probationary status. After a new school that provides online instruction has clearly demonstrated the academic integrity of its instruction through the actual improvement of the academic performance of its students, the school may apply to be removed from probationary status. The state board of education or the state board for charter schools shall remove from Arizona online instruction any probationary school that fails to clearly demonstrate improvement in academic performance within three years measured against goals in the approved application and the state's accountability system. The state board of education and the state board for charter schools shall review the effectiveness of each participating school and other information that is contained in the annual report prescribed in subsection C D of this section. All pupils who participate in Arizona online instruction shall reside in this state. Pupils who participate in Arizona online instruction are subject to the testing requirements prescribed in chapter 7, article 3 of this title. Upon enrollment, the school shall notify the parents or guardians of the pupil of the state testing requirements. If a pupil fails to comply with the testing requirements and the school administers the tests pursuant to this subsection to less than ninety‑five per cent of the pupils in Arizona online instruction, the pupil shall not be allowed to participate in Arizona online instruction.

C. Beginning July 1, 2010, the state board of education and the state board for charter schools shall develop annual reporting mechanisms for schools that participate in Arizona online instruction.

D. The department of education shall compile the information submitted in the annual reports by schools participating in the Arizona online instruction. The department of education shall submit the compiled report to the governor, the speaker of the house of representatives and the president of the senate by November 15 of each year.

E. Each school selected for Arizona online instruction shall ensure that a daily log is maintained for each pupil who participates in Arizona online instruction. The daily log shall describe the amount of time spent by each pupil participating in Arizona online instruction pursuant to this section on academic tasks. The daily log shall be used by the school district or charter school to qualify the pupils who participate in Arizona online instruction in the school's average daily attendance calculations pursuant to section 15‑901.

F. If a pupil is enrolled in a school district or charter school and also participates in Arizona online instruction, the sum of the average daily membership attendance, which includes enrollment as prescribed in section 15‑901, subsection A, paragraph 2 1, subdivisions (a) and (b) and daily attendance as prescribed in section 15‑901, subsection A, paragraph 6 5, for that pupil in the school district or charter school and in Arizona online instruction shall not exceed 1.0. If the pupil is enrolled in a school district or a charter school and also participates in Arizona online instruction and the sum of the daily membership or daily attendance for that pupil is greater than 1.0, the sum shall be reduced to 1.0 and shall be apportioned between the school district or charter school and Arizona online instruction based on the percentage of total time that the pupil is enrolled or in attendance in the school district or charter school and Arizona online instruction. The uniform system of financial records shall include guidelines for the apportionment of the pupil enrollment and attendance as provided in this subsection. Pupils in Arizona online instruction do not incur absences for purposes of section 15-901 and may generate an average daily attendance of 1.0 for attendance hours during any hour of the day, during any day of the week and at any time between July 1 and June 30 of each fiscal year. For kindergarten programs and grades one through eight, average daily membership attendance shall be calculated by dividing the instructional hours as reported in the daily log required in subsection E of this section by the applicable hourly requirements prescribed in section 15‑901. For grades nine through twelve, average daily membership attendance shall be calculated by dividing the instructional hours as reported in the daily log required in subsection E of this section by nine hundred. The average daily membership attendance of a pupil who participates in online instruction shall not exceed 1.0. Average daily membership attendance shall not be calculated on the one hundredth day of instruction for the purposes of this section. Funding shall be determined as follows:

1. Pupils A pupil who are is enrolled full-time in Arizona online instruction shall be funded for online instruction at ninety‑five per cent of the base support level that would be calculated for that pupil if that pupil were enrolled as a full‑time student in a school district or charter school that does not participate in Arizona online instruction. Additional assistance, capital outlay revenue limit and soft capital allocation limit shall be calculated in the same manner they would be calculated if the student were enrolled in a district or charter school that does not participate in Arizona online instruction. A pupil enrolled in Arizona online instruction shall be considered full‑time if the pupil's average instructional hours, as reported in the daily log required in subsection E of this section, exceed one hundred nineteen minutes for kindergarten programs, two hundred thirty-eight minutes for grades one through three, two hundred ninety-seven minutes for grades four through six, three hundred fifty-six minutes for grades seven and eight and three hundred minutes for grades nine through twelve.

2. Pupils A pupil who are is enrolled part-time in Arizona online instruction shall be funded for online instruction at eighty‑five per cent of the base support level that would be calculated for that pupil if that pupil were enrolled as a part‑time student in a school district or charter school that does not participate in Arizona online instruction. Additional assistance, capital outlay revenue limit and soft capital allocation limit shall be calculated in the same manner they would be calculated if the student were enrolled in a district or charter school that does not participate in Arizona online instruction. A pupil enrolled in Arizona online instruction shall be considered part‑time if the pupil's average instructional hours, as reported in the daily log required in subsection E of this section, are less than the hours required for a full‑time pupil pursuant to paragraph 1 of this subsection.

G. If the academic achievement of a pupil declines while the pupil is participating in Arizona online instruction, the pupil's parents, the pupil's teachers and the principal or head teacher of the school shall confer to evaluate whether the pupil should be allowed to continue to participate in Arizona online instruction.

H. To ensure the academic integrity of pupils who participate in online instruction, Arizona online instruction shall include multiple diverse assessment measures and the proctored administration of required state standardized tests.

I. For the purposes of this section:

1. "Online course provider" means a school other than an online school that is selected by the state board of education or the state board for charter schools to participate in Arizona online instruction pursuant to this section and that provides at least one online academic course that is approved by the state board of education.

2. "Online school" means a school that provides at least four online academic courses or one or more online courses for the equivalent of at least five hours each day for one hundred eighty school days and that is a charter school that is sponsored by the state board for charter schools or a traditional public school that is selected by the state board of education to participate in Arizona online instruction. END_STATUTE

Sec. 13. Section 15-824, Arizona Revised Statutes, is amended to read:

START_STATUTE15-824. Admission of pupils of other school districts; homeless children; tuition charges; definitions

A. The governing board of a school district shall admit pupils from another school district or area as follows:

1. Upon the presentation of a certificate of educational convenience issued by the county school superintendent pursuant to section 15‑825.

2. For three hundred fifty or fewer pupils, to a high school without the presentation of such certificate, if the pupil is a resident of a common school district within this state that is not within a high school district and that does not offer instruction in the pupil's grade. The three hundred fifty or fewer pupil limitation prescribed in this paragraph does not apply to a small isolated school district as defined in section 15‑901. Tuition shall be charged as prescribed in subsection E of this section for each pupil admitted pursuant to this paragraph, each pupil from a school district that provides only financing for pupils who are instructed by another school district and each pupil from a unified district that does not offer instruction in the pupil's grade. The school membership of such pupils is deemed, for the purpose of determining student count and for apportionment of state aid, to be enrollment in the school district of the pupil's residence.

B. The residence of the person having legal custody of the pupil is considered the residence of the pupil, except as provided in subsection C of this section and in section 15‑825, subsection B.

C. The current residence of a homeless pupil who does not reside with the person having legal custody of the pupil is considered to be the residence of the homeless pupil if the person having legal custody of the pupil is a resident of the United States. For the purposes of this subsection, "homeless pupil" means a pupil who has a primary residence that is:

1. A supervised publicly or privately operated shelter designed to provide temporary living accommodations.

2. An institution that provides a temporary residence for individuals intended to be institutionalized.

3. A public or private place not designed for, or ordinarily used as, a regular sleeping accommodation for human beings.

D. The school enrollment of a pupil who is a resident of this state or who is admitted to a school district under section 15‑823, subsection B, C or E is deemed, for the purpose of determining student count and for apportionment of state aid, to be enrollment in the school district of actual attendance, except as provided in section 15‑825, subsection A, paragraph 1 and subsection A, paragraph 2 of this section and except for pupils for whom the superintendent of public instruction is charged tuition pursuant to section 15‑825, subsections B and D and section 15‑976 or for whom another school district is charged tuition as provided in subsections E and G of this section.

E. If tuition is required to be charged for pupils attending school in a school district other than that of their residence, the tuition shall be determined and paid in the following manner:

1. The number of high school pupils for which tuition may be charged to a common school district that is not within a high school district is equal to the average daily membership attendance in the district of attendance from the common school district for the prior fiscal year, except that for the first year in which a common school district not within a high school district stops teaching high school subjects, the district of attendance may charge tuition for the number of pupils which is equal to the average daily membership attendance for high school pupils in the common school district for the prior fiscal year. This number may be adjusted if the common school district increases its revenue control limit and district support level or recomputes its revenue control limit as provided in section 15‑948.

2. The tuition for pupils attending school in a school district other than that of their residence, except pupils provided for by section 15‑825, subsections B and D and any pupils included in the definition of child with a disability in section 15‑761, shall not exceed the cost per student count of the school district attended, as determined for the current school year. Tuition for pupils included in the definition of child with a disability in section 15‑761 shall not exceed the actual cost of the school attended for each pupil as determined for the current year. The school district of attendance shall not include in the cost per student count a charge for transportation if no transportation is provided, and the charge for transportation shall not exceed the actual costs of providing transportation for the pupils served, as prescribed in the uniform system of financial records. The school district of attendance shall provide the school district of residence with the final tuition charge for the current year and with an estimate of the budget year's tuition charge by May 1 of the current year. The school district of residence shall pay at least one‑fourth of the total amount of the estimated tuition by September 30, December 31 and March 31, and it shall pay the remaining amount it owes after adjustments are made by June 30.

3. Notwithstanding paragraph 2 of this subsection and subsection G of this section, if two school districts enter into a voluntary agreement for the payment of tuition, the agreement shall specify the method for computing the tuition amount and the timing of the payments. The agreement shall not be longer than five consecutive years. If two school districts enter into an agreement and choose to renew the agreement, each renewal shall not be longer than five consecutive years. The agreement shall specify that a parent or legal guardian of a pupil affected by a tuition agreement entered pursuant to this section or section 15‑816.01 may choose not to send their the pupil or pupils to a school district or school that is a party to the agreement.

4. Tuition of pupils as provided in section 15‑825, subsection D shall not exceed the excess costs for group B children with disabilities in the cost study prescribed in section 15‑236 minus the amount generated by the equalization base as determined in section 15‑971, subsection A for these pupils. A school district may submit to the superintendent of public instruction a record of actual excess costs to educate a group B child with a disability if the costs are higher than the calculated excess costs or if a pupil has been placed in a private school for special education services. The superintendent shall determine if the additional costs will be paid, and if the costs are paid, whether the additional costs will be paid by the state or the resident district.

5. The amount received representing contributions to capital outlay as provided in subsection G, paragraph 1, subdivision (b) of this section shall be applied to the capital outlay fund or the debt service fund of the school district.

6. The amount received representing contributions to debt service as provided in subsection G, paragraph 1, subdivisions (c) and (d) of this section shall be applied to the debt service fund of the school district if there is one. Otherwise such amount shall be credited to the capital outlay fund of the school district.

F. A school district may submit to the superintendent of public instruction a record of actual costs paid by the school district to educate a pupil who qualifies for a certificate of educational convenience under section 15‑825, subsection B. If the actual costs for that pupil exceed the costs per student count computed pursuant to subsection G of this section, the superintendent of public instruction shall reimburse the school district for these additional costs subject to legislative appropriation.

G. For the purposes of this section:

1. "Costs per student count" means the sum of the following for the common or high school portion of the school district attended, whichever is applicable to the pupil involved, as prescribed in the uniform system of financial records:

(a) The actual school district expenditures for the regular education program subsection of the maintenance and operation section of the budget divided by the school district's student count for the common or high school portion of the school district, whichever is applicable.

(b) The actual school district expenditures for the capital outlay section of the budget as provided in sections 15‑903 and 15‑905 excluding expenditures for transportation equipment and buildings if no transportation is provided and expenditures for the acquisition of building sites, divided by the school district's student count for the common or high school portion of the school district, whichever is applicable.

(c) The actual school district expenditures for debt service divided by the school district's student count for the common or high school portion of the school district, whichever is applicable.

(d) The result obtained in subdivision (c) of this paragraph shall not exceed:

(i) Seven hundred fifty dollars if the pupil's school district of residence pays tuition for seven hundred fifty or fewer pupils to other school districts or one hundred fifty dollars if the state pays tuition for seven hundred fifty or fewer pupils to a school district pursuant to section 15‑825, subsection D or section 15‑976.

(ii) Eight hundred dollars if the pupil's school district of residence pays tuition for one thousand or fewer, but more than seven hundred fifty, pupils to other school districts or two hundred dollars if the state pays tuition for one thousand or fewer, but more than seven hundred fifty, pupils to a school district pursuant to section 15‑825, subsection D or section 15‑976.

(iii) The actual cost per student count if either the pupil's school district of residence or the state pays tuition for more than one thousand pupils to other school districts.

2. "Legal custody" means:

(a) Custody exercised by the natural or adoptive parents with whom a pupil resides.

(b) Custody granted by order of a court of competent jurisdiction to a person or persons with whom a pupil resides unless the primary purpose for which custody was requested was to circumvent the payment of tuition as provided in this section. END_STATUTE

Sec. 14. Section 15-861, Arizona Revised Statutes, is amended to read:

START_STATUTE15-861. Four day school week and alternative kindergarten programs

A. A governing board, after at least two public hearings in the school district, may offer an educational program on the basis of a four day school week or an alternative kindergarten program on the basis of a three day school week, or both.

B. The instructional time in an educational program offered on the basis of a four day school week or in an alternative kindergarten program offered on the basis of a three day school week must be equal to the instructional time in an educational program or kindergarten program, as applicable, offered on the basis of a five day school week. Notwithstanding section 15‑901, subsection A, paragraph 6 5, for school districts which offer an educational program on the basis of a four day school week in common schools or an alternative kindergarten program on the basis of a three day school week, or both, as provided in this section, the minimum number of minutes required for daily attendance shall be increased so that the number of minutes per day multiplied by the total number of school days per school year is at least equal to the number of minutes prescribed for that program or grade in section 15‑901, subsection A, paragraph 6 5, multiplied by one hundred seventy‑five. END_STATUTE

Sec. 15. Section 15-901, Arizona Revised Statutes, is amended to read:

START_STATUTE15-901. Definitions

A. In this title, unless the context otherwise requires:

1. "Average daily attendance" or "ADA" means actual average daily attendance of fractional students and full-time students through the first one hundred eighty days or two hundred days in session, as applicable. For high school pupils, daily attendance is calculated for a full-time student by dividing the number of hours attended by the number of hours scheduled for a full-time instructional program. This amount shall be reduced by one-fourth, one-half or three-fourths for part-time students, as applicable.

2. "Average daily membership" means the total enrollment of fractional students and full‑time students, minus withdrawals, of each school day through the first one hundred days or two hundred days in session, as applicable, for the current year. Withdrawals include students formally withdrawn from schools and students absent for ten consecutive school days, except for excused absences as identified by the department of education. For computation purposes, the effective date of withdrawal shall be retroactive to the last day of actual attendance of the student.

(a) "Fractional student" means:

(i) For common schools, until fiscal year 2001‑2002, a preschool child who is enrolled in a program for preschool children with disabilities of at least three hundred sixty minutes each week or a kindergarten student at least five years of age prior to January 1 of the school year and enrolled in a school kindergarten program that meets at least three hundred forty‑six instructional hours during the minimum number of days required in a school year as provided in section 15‑341. In fiscal year 2001‑2002, the kindergarten program shall meet at least three hundred forty‑eight hours. In fiscal year 2002‑2003, the kindergarten program shall meet at least three hundred fifty hours. In fiscal year 2003‑2004, the kindergarten program shall meet at least three hundred fifty‑two hours. In fiscal year 2004‑2005, the kindergarten program shall meet at least three hundred fifty‑four hours. In fiscal year 2005‑2006 and each fiscal year thereafter, the kindergarten program shall meet that meets at least three hundred fifty‑six hours. Lunch periods and recess periods may not be included as part of the instructional hours unless the child's individualized education program requires instruction during those periods and the specific reasons for such instruction are fully documented. In computing the average daily membership attendance, preschool children with disabilities and kindergarten students shall be counted as one‑half of a full‑time student. For common schools, a part‑time student is a student enrolled for less than the total time for a full‑time student as defined in this section. A part‑time common school student shall be counted as one‑fourth, one‑half or three‑fourths of a full‑time student if the student is enrolled in an instructional program that is at least one‑fourth, one‑half or three‑fourths of the time a full‑time student is enrolled as defined in subdivision (b) of this paragraph.

(ii) For high schools, a part‑time student who is enrolled in less than four subjects that count toward graduation as defined by the state board of education in a recognized high school and who is taught in less than twenty instructional hours per week prorated for any week with fewer than five school days. A part‑time high school student shall be counted as one‑fourth, one‑half or three‑fourths of a full‑time student if the student is enrolled in an instructional program that is at least one‑fourth, one‑half or three‑fourths of a full‑time instructional program as defined in subdivision (c) of this paragraph.

(b) "Full‑time student" means:

(i) For common schools, a student who is at least six years of age prior to January 1 of a school year, who has not graduated from the highest grade taught in the school district and who is regularly enrolled in a course of study required by the state board of education. Until fiscal year 2001‑2002, first, second and third grade students, ungraded students at least six, but under nine, years of age by September 1 or ungraded group B children with disabilities who are at least five, but under six, years of age by September 1 must be enrolled in an instructional program that meets for a total of at least six hundred ninety‑two hours during the minimum number of days required in a school year as provided in section 15‑341. In fiscal year 2001‑2002, the program shall meet at least six hundred ninety‑six hours. In fiscal year 2002‑2003, the program shall meet at least seven hundred hours. In fiscal year 2003‑2004, the program shall meet at least seven hundred four hours. In fiscal year 2004‑2005, the program shall meet at least seven hundred eight hours. In fiscal year 2005‑2006 and in each fiscal year thereafter, the program shall meet at least seven hundred twelve hours. Until fiscal year 2001‑2002, fourth, fifth and sixth grade students or ungraded students at least nine, but under twelve, years of age by September 1 must be enrolled in an instructional program that meets for a total of at least eight hundred sixty‑five hours during the minimum number of school days required in a school year as provided in section 15‑341. In fiscal year 2001‑2002, the program shall meet at least eight hundred seventy hours. In fiscal year 2002‑2003, the program shall meet at least eight hundred seventy‑five hours. In fiscal year 2003‑2004, the program shall meet at least eight hundred eighty hours. In fiscal year 2004‑2005, the program shall meet at least eight hundred eighty‑five hours. In fiscal year 2005‑2006 and each fiscal year thereafter, the program shall meet at least eight hundred ninety hours. Until fiscal year 2001‑2002, seventh and eighth grade students or ungraded students at least twelve, but under fourteen, years of age by September 1 must be enrolled in an instructional program that meets for a total of at least one thousand thirty‑eight hours during the minimum number of days required in a school year as provided in section 15‑341. In fiscal year 2001‑2002, the program shall meet at least one thousand forty‑four hours. In fiscal year 2002‑2003, the program shall meet at least one thousand fifty hours. In fiscal year 2003‑2004, the program shall meet at least one thousand fifty‑six hours. In fiscal year 2004‑2005, the program shall meet at least one thousand sixty‑two hours. In fiscal year 2005‑2006 and each fiscal year thereafter, the program shall meet at least one thousand sixty‑eight hours. Lunch periods and recess periods may not be included as part of the instructional hours unless the student is a child with a disability and the child's individualized education program requires instruction during those periods and the specific reasons for such instruction are fully documented.

(ii) For high schools, except as provided in section 15‑105, a student not graduated from the highest grade taught in the school district, or an ungraded student at least fourteen years of age by September 1, and enrolled in at least a full‑time instructional program of subjects that count toward graduation as defined by the state board of education in a recognized high school. A full‑time student shall not be counted more than once for computation of average daily membership attendance.

(iii) Except as otherwise provided by law, for a full‑time high school student who is concurrently enrolled in two school districts or two charter schools, the average daily membership attendance shall not exceed 1.0.

(iv) Except as otherwise provided by law, for any student who is concurrently enrolled in a school district and a charter school, the average daily membership attendance shall be apportioned between the school district and the charter school and shall not exceed 1.0. The apportionment shall be based on the percentage of total time that the student is enrolled in or in attendance at the school district and the charter school.

(v) Except as otherwise provided by law, for any student who is concurrently enrolled, pursuant to section 15-808, in a school district and Arizona online instruction or a charter school and Arizona online instruction, the average daily membership attendance shall be apportioned between the school district and Arizona online instruction or the charter school and Arizona online instruction and shall not exceed 1.0. The apportionment shall be based on the percentage of total time that the student is enrolled in or in attendance at the school district and Arizona online instruction or the charter school and Arizona online instruction.

(vi) For homebound or hospitalized, a student receiving at least four hours of instruction per week.

(i) Through fiscal year 2000‑2001, at least four subjects, each of which, if taught each school day for the minimum number of days required in a school year, would meet a minimum of one hundred twenty hours a year, or the equivalent, or one or more subjects taught in amounts of time totaling at least twenty hours per week prorated for any week with fewer than five school days.

(ii) For fiscal year 2001‑2002, an instructional program that meets at least a total of seven hundred four hours during the minimum number of days required and includes at least four subjects each of which, if taught each school day for the minimum number of days required in a school year, would meet a minimum of one hundred twenty‑two hours a year, or the equivalent, or one or more subjects taught in amounts of time totaling at least twenty hours per week prorated for any week with fewer than five school days.

(iii) For fiscal year 2002‑2003, an instructional program that meets at least a total of seven hundred eight hours during the minimum number of days required and includes at least four subjects each of which, if taught each school day for the minimum number of days required in a school year, would meet a minimum of one hundred twenty‑two hours a year, or the equivalent, or one or more subjects taught in amounts of time totaling at least twenty hours per week prorated for any week with fewer than five school days.

(iv) For fiscal year 2003‑2004, an instructional program that meets at least a total of seven hundred twelve hours during the minimum number of days required and includes at least four subjects each of which, if taught each school day for the minimum number of days required in a school year, would meet a minimum of one hundred twenty‑three hours a year, or the equivalent, or one or more subjects taught in amounts of time totaling at least twenty hours per week prorated for any week with fewer than five school days.

(v) For fiscal year 2004‑2005, an instructional program that meets at least a total of seven hundred sixteen hours during the minimum number of days required and includes at least four subjects each of which, if taught each school day for the minimum number of days required in a school year, would meet a minimum of one hundred twenty‑three hours a year, or the equivalent, or one or more subjects taught in amounts of time totaling at least twenty hours per week prorated for any week with fewer than five school days.

(vi) For fiscal year 2005‑2006 and each fiscal year thereafter, an instructional program that meets at least a total of seven hundred twenty hours during the minimum number of days required and includes at least four subjects each of which, if taught each school day for the minimum number of days required in a school year, would meet a minimum of one hundred twenty‑three hours a year, or the equivalent, or one or more subjects taught in amounts of time totaling at least twenty hours per week prorated for any week with fewer than five school days.

3. 2. "Budget year" means the fiscal year for which the school district is budgeting and which immediately follows the current year.

4. 3. "Common school district" means a political subdivision of this state offering instruction to students in programs for preschool children with disabilities and kindergarten programs and grades one through eight.

5. 4. "Current year" means the fiscal year in which a school district is operating.

6. 5. "Daily attendance" means:

(a) For common schools, days in which a pupil:

(i) Of a kindergarten program or ungraded, but not group B children with disabilities, and at least five, but under six, years of age by September 1 attends at least three‑quarters of the instructional time scheduled for the day. If the total instruction time scheduled for the year is at least three hundred forty‑six hours but is less than six hundred ninety‑two hours such attendance shall be counted as one‑half day of attendance. If the instructional time scheduled for the year is at least six hundred ninety‑two hours, "daily attendance" means days in which a pupil attends at least one‑half of the instructional time scheduled for the day. Such attendance shall be counted as one‑half day of attendance.

(ii) Of the first, second or third grades, ungraded and at least six, but under nine, years of age by September 1 or ungraded group B children with disabilities and at least five, but under six, years of age by September 1 attends more than three‑quarters of the instructional time scheduled for the day.

(iii) Of the fourth, fifth or sixth grades or ungraded and at least nine, but under twelve, years of age by September 1 attends more than three‑quarters of the instructional time scheduled for the day, except as provided in section 15‑797.

(iv) Of the seventh or eighth grades or ungraded and at least twelve, but under fourteen, years of age by September 1 attends more than three‑quarters of the instructional time scheduled for the day, except as provided in section 15‑797.

(b) For common schools, the attendance of a pupil at three‑quarters or less of the instructional time scheduled for the day shall be counted as follows, except as provided in section 15‑797 and except that attendance for a fractional student shall not exceed the pupil's fractional membership attendance:

(i) If attendance for all pupils in the school is based on quarter days, the attendance of a pupil shall be counted as one‑fourth of a day's attendance for each one‑fourth of full‑time instructional time attended.

(ii) If attendance for all pupils in the school is based on half days, the attendance of at least three‑quarters of the instructional time scheduled for the day shall be counted as a full day's attendance and attendance at a minimum of one‑half but less than three‑quarters of the instructional time scheduled for the day equals one‑half day of attendance.

(c) For common schools, the attendance of a preschool child with disabilities shall be counted as one‑fourth day's attendance for each thirty‑six minutes of attendance not including lunch periods and recess periods, except as provided in paragraph 2, subdivision (a), item (i) of this subsection for children with disabilities up to a maximum of three hundred sixty minutes each week.

(d) For high schools or ungraded schools in which the pupil is at least fourteen years of age by September 1, the attendance of a pupil shall not be counted as a full day unless the pupil is actually and physically in attendance and enrolled in and carrying four subjects, each of which, if taught each school day for the minimum number of days required in a school year, would meet a minimum of one hundred twenty hours a year, or the equivalent, that count toward graduation in a recognized high school except as provided in section 15‑797 and subdivision (e) of this paragraph. Attendance of a pupil carrying less than the load prescribed shall be prorated.

(e) For high schools or ungraded schools in which the pupil is at least fourteen years of age by September 1, the attendance of a pupil may be counted as one‑fourth of a day's attendance for each sixty minutes of instructional time in a subject that counts toward graduation, except that attendance for a pupil shall not exceed the pupil's full or fractional membership attendance.

(f) For homebound or hospitalized, a full day of attendance may be counted for each day during a week in which the student receives at least four hours of instruction.

(g) For school districts which maintain school for an approved year‑round school year operation, attendance shall be based on a computation, as prescribed by the superintendent of public instruction, of the one hundred eighty days' equivalency or two hundred days' equivalency, as applicable, of instructional time as approved by the superintendent of public instruction during which each pupil is enrolled.

7. 6. "Daily route mileage" means the sum of:

(a) The total number of miles driven daily by all buses of a school district while transporting eligible students from their residence to the school of attendance and from the school of attendance to their residence on scheduled routes approved by the superintendent of public instruction.

(b) The total number of miles driven daily on routes approved by the superintendent of public instruction for which a private party, a political subdivision or a common or a contract carrier is reimbursed for bringing an eligible student from the place of his residence to a school transportation pickup point or to the school of attendance and from the school transportation scheduled return point or from the school of attendance to his residence. Daily route mileage includes the total number of miles necessary to drive to transport eligible students from and to their residence as provided in this paragraph.

8. 7. "District support level" means the base support level plus the transportation support level.

9. 8. "Eligible students" means:

(a) Students who are transported by or for a school district and who qualify as full‑time students or fractional students, except students for whom transportation is paid by another school district or a county school superintendent, and:

(i) For common school students, whose place of actual residence within the school district is more than one mile from the school facility of attendance or students who are admitted pursuant to section 15‑816.01 and who meet the economic eligibility requirements established under the national school lunch and child nutrition acts (42 United States Code sections 1751 through 1785) for free or reduced price lunches and whose actual place of residence outside the school district boundaries is more than one mile from the school facility of attendance.

(ii) For high school students, whose place of actual residence within the school district is more than one and one‑half miles from the school facility of attendance or students who are admitted pursuant to section 15‑816.01 and who meet the economic eligibility requirements established under the national school lunch and child nutrition acts (42 United States Code sections 1751 through 1785) for free or reduced price lunches and whose actual place of residence outside the school district boundaries is more than one and one‑half miles from the school facility of attendance.

(b) Kindergarten students, for purposes of computing the number of eligible students under subdivision (a), item (i) of this paragraph, shall be counted as full‑time students, notwithstanding any other provision of law.

(c) Children with disabilities, as defined by section 15‑761, who are transported by or for the school district or who are admitted pursuant to chapter 8, article 1.1 of this title and who qualify as full‑time students or fractional students regardless of location or residence within the school district or children with disabilities whose transportation is required by the pupil's individualized education program.

(d) Students whose residence is outside the school district and who are transported within the school district on the same basis as students who reside in the school district.

10. 9. "Enrolled" or "enrollment" means when a pupil is currently registered in the school district.

11. 10. "GDP price deflator" means the average of the four implicit price deflators for the gross domestic product reported by the United States department of commerce for the four quarters of the calendar year.

12. 11. "High school district" means a political subdivision of this state offering instruction to students for grades nine through twelve or that portion of the budget of a common school district which is allocated to teaching high school subjects with permission of the state board of education.

13. 12. "Revenue control limit" means the base revenue control limit plus the transportation revenue control limit.

14. 13. "Student count" means average daily membership ATTENDANCE as prescribed in this subsection for the fiscal year prior to the current year, except that for the purpose of budget preparation student count means average daily membership ATTENDANCE as prescribed in this subsection for the current year.

15. 14. "Submit electronically" means submitted in a format and in a manner prescribed by the department of education.

16. 15. "Total bus mileage" means the total number of miles driven by all buses of a school district during the school year.

17. 16. "Total students transported" means all eligible students transported from their place of residence to a school transportation pickup point or to the school of attendance and from the school of attendance or from the school transportation scheduled return point to their place of residence.

18. 17. "Unified school district" means a political subdivision of the state offering instruction to students in programs for preschool children with disabilities and kindergarten programs and grades one through twelve.

B. In this title, unless the context otherwise requires:

1. "Base" means the revenue level per student count specified by the legislature.

2. "Base level" means:

(a) For fiscal year 2007‑2008, three thousand two hundred twenty‑six dollars eighty-eight cents.

(b) For fiscal year 2008-2009, three thousand two hundred ninety-one dollars forty-two cents.

3. "Base revenue control limit" means the base revenue control limit computed as provided in section 15‑944.

4. "Base support level" means the base support level as provided in section 15‑943.

5. "Certified teacher" means a person who is certified as a teacher pursuant to the rules adopted by the state board of education, who renders direct and personal services to school children in the form of instruction related to the school district's educational course of study and who is paid from the maintenance and operation section of the budget.

6. "DD" means programs for children with developmental delays who are at least three years of age but under ten years of age. A preschool child who is categorized under this paragraph is not eligible to receive funding pursuant to section 15-943, paragraph 2, subdivision (b).

7. "ED, MIMR, SLD, SLI and OHI" means programs for children with emotional disabilities, mild mental retardation, a specific learning disability, a speech/language impairment and other health impairments. A preschool child who is categorized as SLI under this paragraph is not eligible to receive funding pursuant to section 15-943, paragraph 2, subdivision (b).

8. "ED‑P" means programs for children with emotional disabilities who are enrolled in private special education programs as prescribed in section 15‑765, subsection D, paragraph 1 or in an intensive school district program as provided in section 15‑765, subsection D, paragraph 2.

9. "ELL" means English learners who do not speak English or whose native language is not English, who are not currently able to perform ordinary classroom work in English and who are enrolled in an English language education program pursuant to sections 15‑751, 15‑752 and 15‑753.

10. "Full‑time equivalent certified teacher" or "FTE certified teacher" means for a certified teacher the following:

(a) If employed full time as defined in section 15‑501, 1.00.

(b) If employed less than full time, multiply 1.00 by the percentage of a full school day, or its equivalent, or a full class load, or its equivalent, for which the teacher is employed as determined by the governing board.

11. "Group A" means educational programs for career exploration, a specific learning disability, an emotional disability, mild mental retardation, remedial education, a speech/language impairment, developmental delay, homebound, bilingual, other health impairments and gifted pupils.

12. "Group B" means educational improvements for pupils in kindergarten programs and grades one through three, educational programs for autism, a hearing impairment, moderate mental retardation, multiple disabilities, multiple disabilities with severe sensory impairment, orthopedic impairments, preschool severe delay, severe mental retardation and emotional disabilities for school age pupils enrolled in private special education programs or in school district programs for children with severe disabilities or visual impairment and English learners enrolled in a program to promote English language proficiency pursuant to section 15‑752.

13. "HI" means programs for pupils with hearing impairment.

14. "Homebound" or "hospitalized" means a pupil who is capable of profiting from academic instruction but is unable to attend school due to illness, disease, accident or other health conditions, who has been examined by a competent medical doctor and who is certified by that doctor as being unable to attend regular classes for a period of not less than three school months or a pupil who is capable of profiting from academic instruction but is unable to attend school regularly due to chronic or acute health problems, who has been examined by a competent medical doctor and who is certified by that doctor as being unable to attend regular classes for intermittent periods of time totaling three school months during a school year. The medical certification shall state the general medical condition, such as illness, disease or chronic health condition, that is the reason that the pupil is unable to attend school. Homebound or hospitalized includes a student who is unable to attend school for a period of less than three months due to a pregnancy if a competent medical doctor, after an examination, certifies that the student is unable to attend regular classes due to risk to the pregnancy or to the student's health.

15. "K" means kindergarten programs.

16. "K‑3" means kindergarten programs and grades one through three.

17. "MD‑R, A‑R and SMR‑R" means resource programs for pupils with multiple disabilities, autism and severe mental retardation.

18. "MD‑SC, A‑SC and SMR‑SC" means self‑contained programs for pupils with multiple disabilities, autism and severe mental retardation.

19. "MDSSI" means a program for pupils with multiple disabilities with severe sensory impairment.

20. "MOMR" means programs for pupils with moderate mental retardation.

21. "OI‑R" means a resource program for pupils with orthopedic impairments.

22. "OI‑SC" means a self‑contained program for pupils with orthopedic impairments.

23. "PSD" means preschool programs for children with disabilities as provided in section 15‑771.

24. "P‑SD" means programs for children who meet the definition of preschool severe delay as provided in section 15‑771.

25. "Qualifying tax rate" means the qualifying tax rate specified in section 15‑971 applied to the assessed valuation used for primary property taxes.

26. "Small isolated school district" means a school district which meets all of the following:

(a) Has a student count of fewer than six hundred in kindergarten programs and grades one through eight or grades nine through twelve.

(b) Contains no school which is fewer than thirty miles by the most reasonable route from another school, or, if road conditions and terrain make the driving slow or hazardous, fifteen miles from another school which teaches one or more of the same grades and is operated by another school district in this state.

27. "Small school district" means a school district which meets all of the following:

(a) Has a student count of fewer than six hundred in kindergarten programs and grades one through eight or grades nine through twelve.

(b) Contains at least one school which is fewer than thirty miles by the most reasonable route from another school which teaches one or more of the same grades and is operated by another school district in this state.

28. "Transportation revenue control limit" means the transportation revenue control limit computed as prescribed in section 15‑946.

29. "Transportation support level" means the support level for pupil transportation operating expenses as provided in section 15‑945.

30. "VI" means programs for pupils with visual impairments.

31. "Voc. Ed." means career and technical education and vocational education programs, as defined in section 15‑781. END_STATUTE

Sec. 16. Repeal

Section 15-902, Arizona Revised Statutes, is repealed.

Sec. 17. Section 15-902.01, Arizona Revised Statutes, is amended to read:

START_STATUTE15-902.01. Student revenue loss phase‑down

A. Notwithstanding section 15‑902, subsection I A school district which that loses at least five hundred students from its student count as a result of the formation of a joint unified school district pursuant to section 15‑450 and that does not receive tuition for those students for the budget year, may increase its base support level for the budget year by an amount as follows:

1. For the first year of the loss, six hundred fifty thousand dollars.

2. For the second year following the loss, six hundred thousand dollars.

3. For the third year following the loss, five hundred thousand dollars.

4. For the fourth year following the loss, three hundred thousand dollars.

5. For the fifth year following the loss, one hundred thousand dollars.

B. In addition to any adjustment for tuition loss received pursuant to section 15‑954, a union high school district which that loses at least fifty students from its tuition count as a result of the formation of a joint unified school district pursuant to section 15‑450 and that does not receive tuition for those students for the budget year, may increase its base support level for the budget year by an amount as follows:

1. For the first year of the loss, one hundred thousand dollars.

2. If during the second year following the initial loss of students the union high school district loses an additional fifty students as a result of the formation of a joint unified school district pursuant to section 15‑450 and does not receive tuition for those students for the budget year, two hundred thousand dollars.

3. If during the third year following the initial loss of students the union high school district loses an additional fifty students beyond the second year's additional loss as a result of the formation of a joint unified school district pursuant to section 15‑450 and does not receive tuition for those students for the budget year, three hundred twenty‑five thousand dollars.

4. If the union high school district was eligible for the three hundred twenty‑five thousand dollars as provided in paragraph 3 of this subsection, for the fourth year following the initial loss of students, two hundred thousand dollars.

5. If the union high school district was eligible for the two hundred thousand dollars as provided in paragraph 4 of this subsection, for the fifth year following the initial loss of students, one hundred thousand dollars.END_STATUTE

Sec. 18. Repeal

Section 15-902.02, Arizona Revised Statutes, is repealed.

Sec. 19. Section 15-910.01, Arizona Revised Statutes, is amended to read:

START_STATUTE15-910.01. School district budgets; career and technical education and vocational education center expenses

A. The governing board of a school district which has entered into an intergovernmental agreement or other written contract to establish a jointly owned and operated career and technical education and vocational education center as provided in section 15‑789 may budget for vocational maintenance and operation expenses which are specifically exempt in whole or part from the revenue control limit for a period of not to exceed three years beginning the first year that the career and technical education and vocational education center is operating and serving students. The governing board shall notify the state board of education before adopting a budget as provided in this section for the first year of operation of the career and technical education and vocational education center to demonstrate that the center is ready to begin operations.

B. For each year that a school district is authorized to budget for a joint career and technical education and vocational education center as provided in this section, the district shall determine the budget amount as follows:

1. Estimate the average daily membership attendance or adjusted average daily membership attendance for the budget year of students to be enrolled in courses held at the joint career and technical education and vocational education center pursuant to sections section 15‑901 and 15‑902.

2. Multiply 0.142 by the base level and multiply this product by the average daily membership attendance or adjusted average daily membership attendance as determined in paragraph 1 of this subsection.

C. Before May 15, school districts which overestimate the average daily membership attendance as provided in subsection B, paragraph 1 of this section shall adjust the general budget limit and expenditures based on the actual average daily membership attendance during the current fiscal year. School districts which underestimate the average daily membership attendance may adjust their budgets before May 15 based on the actual average daily membership attendance during the current fiscal year. Procedures for completing adjustments shall be prescribed in the uniform system of financial records. Not later than May 18, the budget as revised shall be submitted electronically to the superintendent of public instruction.

D. A governing board which budgets for career and technical education and vocational education center expenses pursuant to this section shall:

1. Prepare and employ a separate maintenance and operation budget for the career and technical education and vocational education center on a form prescribed by the superintendent of public instruction in conjunction with the auditor general. The budget format shall be designed to allow a school district to plan and provide in detail for expenditures to be incurred solely for the maintenance and operation of the career and technical education and vocational education center.

2. Prepare as a part of the annual financial report a detailed report of expenditures incurred solely for the maintenance and operation of the career and technical education and vocational education center.

E. The part of the primary tax rate set to fund the vocational maintenance and operations expenses as provided in this section shall not be included in the computation of additional state aid for education as prescribed in section 15‑972. END_STATUTE

Sec. 20. Section 15-913.01, Arizona Revised Statutes, is amended to read:

START_STATUTE15-913.01. Education program; county jails

A. Each county that operates a county jail shall offer an education program to serve all prisoners who are under eighteen years of age and prisoners with disabilities who are age twenty‑one or younger and who are confined in the county jail. The county school superintendent and the sheriff in each county shall agree on the method of delivery of the education program.

B. The county school superintendent shall develop policies and procedures for the transfer of educational records of any prisoner confined in a county jail who has been transferred from a juvenile detention center or from any other public agency which has provided educational services to that prisoner.

C. A county may operate its county jail education program through an accommodation school that provides alternative education services pursuant to section 15‑308, except that each pupil enrolled in the accommodation school county jail education program shall be funded at an amount equal to seventy‑two per cent of the amount for that pupil if that pupil were enrolled in another accommodation school program.

D. If a county chooses not to operate its county jail education program through an accommodation school, the county school superintendent may establish a county jail education fund to provide financial support to the program. The county jail education fund for each program shall consist of a base amount plus a variable amount. For fiscal year 1999‑2000 the base amount is fourteen thousand four hundred dollars and the variable amount shall be determined pursuant to subsection E of this section. The base amount and variable amount for each county or counties served shall be funded with state general fund monies, subject to appropriation. The county school superintendent must submit claims for payments to the state superintendent of public instruction. The county school superintendent shall deposit the payments into the county jail education fund.

E. The variable amount shall be determined as follows:

1. Determine the number of days in the prior fiscal year that each pupil who is a prisoner and had been in the county jail for more than forty‑eight hours received an instructional program of at least two hundred forty minutes. No school district may count a pupil as being in attendance in that school district on a day that the pupil is counted as a prisoner for the purposes of this paragraph.

2. Multiply the number of days determined under paragraph 1 of this subsection by the following amount:

(a) For fiscal year 1999‑2000, ten dollars eighty cents.

(b) For fiscal year 2000‑2001 and each year thereafter, the amount for the prior year adjusted by any growth rate prescribed by law, subject to legislative appropriation.

3. For each pupil who is a child with a disability as defined in section 15‑761, who is a prisoner and who had been in the county jail for more than forty‑eight hours:

(a) Determine the amount prescribed in section 15‑1204, subsection E, paragraph 1 or 2, multiply the amount by .72 and add seventy‑two dollars for capital outlay costs.

(b) Divide the sum determined under subdivision (a) of this paragraph by one hundred seventy‑five.

(c) Subtract the amount prescribed in paragraph 2 of this subsection from the quotient determined in subdivision (b) of this paragraph.

(d) Determine the number of days in the prior fiscal year that the pupil received an instructional program of at least two hundred forty minutes.

(e) Multiply the amount determined in subdivision (d) of this paragraph by the difference determined in subdivision (c) of this paragraph.

4. Add the amounts determined in paragraph 3 of this subsection for all pupils with disabilities who are prisoners.

5. Add the sum determined in paragraph 4 of this subsection to the product determined in paragraph 2 of this subsection. This sum is the variable amount.

F. If a county jail education program serves more than one county, the county school superintendents and the sheriffs of the counties being served shall agree on a county of jurisdiction. The county school superintendent shall deposit into the county jail education fund of the county of jurisdiction monies that are received from the superintendent of public instruction pursuant to this section for all counties served by the county of jurisdiction.

G. If a county operated a county jail education program through an accommodation school in the year before it begins to operate its county jail education program as provided in subsection D of this section, for the first year of operation as provided in subsection D of this section, the student count of the accommodation school shall be reduced by the average daily membership ATTENDANCE attributable to the accommodation school's county jail program in its last fiscal year of operation. The provisions of section 15‑942 shall not apply to this reduction in student count.END_STATUTE

Sec. 21. Section 15-914, Arizona Revised Statutes, is amended to read:

START_STATUTE15-914. Financial and compliance audits

A. The governing board of a school district that is required to comply with the single audit act amendments of 1996 (P.L. 104‑156; 110 Stat. 1396; 31 United States Code sections 7501 through 7507) shall contract for at least annual financial and compliance audits of financial transactions and accounts subject to the single audit act amendments of 1996 and kept by or for the school district. Beginning with fiscal year 2003‑2004, the governing board of a school district that is not required to comply with the single audit act and that has adopted an expenditure budget of two million dollars or more for the maintenance and operation fund pursuant to section 15‑905 shall contract for an annual financial statement audit. Beginning with fiscal year 2004‑2005, the governing board of a school district that is not required to comply with the single audit act and that has adopted an expenditure budget of less than two million dollars but more than seven hundred thousand dollars for the maintenance and operation fund pursuant to section 15‑905 shall contract for a biennial financial statement audit. An independent certified public accountant shall conduct the audit in accordance with generally accepted governmental auditing standards. To the extent permitted by federal law, a school district that is required to participate in an annual audit pursuant to this subsection may convert to a biennial audit schedule if the previous annual audit did not contain any significant negative findings. If a biennial audit of a school district conducted pursuant to this subsection contains any significant negative findings, the school district shall convert back to an annual audit schedule. If a school district is required to convert back to an annual audit schedule pursuant to this subsection because of significant negative findings, the school district may subsequently convert to a biennial audit schedule if the previous two annual audits did not contain any significant negative findings. For the purposes of this subsection, "significant negative finding" means a finding that results in the issuance of a letter of noncompliance from the auditor general.

B. The governing board of a charter school that is required to comply with the single audit act amendments of 1996 shall contract for an annual financial and compliance audit of financial transactions and accounts subject to the single audit act amendments of 1996 and kept by or for the charter school.

C. A charter school that is not subject to the single audit act amendments of 1996 shall contract for at least an annual financial statement audit conducted in accordance with generally accepted governmental auditing standards. An independent certified public accountant shall conduct the audit.

D. For all audits referred to in subsections A, B and C of this section, the independent certified public accountant shall submit a uniform system of financial records compliance questionnaire to the auditor general with the applicable audit reports.

E. Contracts for all financial and compliance audits and financial statement audits and the completed audits shall be approved by the auditor general as provided in section 41‑1279.21. Contracts for all financial and compliance audits and financial statement audits shall comply with the rules for competitive sealed proposals as prescribed by the state board of education in section 15‑213.

F. If the school district or charter school will incur costs of financial and compliance audits for the budget year, the governing board of a school district or the governing body of the charter school may increase its base support level for the budget year by an amount equal to the amount expended for the district's or charter school's financial and compliance audits in the year before the current year, increased by the growth rate as prescribed by law, subject to appropriation. In determining the amount expended for the district's or charter school's financial and compliance audits, the school district or charter school shall include only the portion of the audit that must be paid from monies other than federal monies. The department of education and the auditor general shall prescribe a method for determining the increase in the base support level and shall include in the maintenance and operation section of the budget format, as provided in section 15‑903, a separate line for financial and compliance audits expenditures.

G. Beginning in fiscal year 2003‑2004, Every audit contract shall include a systematic review of average daily membership attendance, as defined in section 15‑901, using methodology that is consistent with guidelines established by the auditor general. The auditor general shall consider cost when establishing guidelines pursuant to this subsection and, to the extent possible, shall attempt to minimize the cost of the review. The purpose of the review is to determine whether the average daily membership attendance reported by the charter school or school district is in compliance with the laws of this state and the uniform systems of financial records for charter schools and school districts. END_STATUTE

Sec. 22. Section 15-915, Arizona Revised Statutes, is amended to read:

START_STATUTE15-915. Correction of state aid or budget limit errors; definition

A. If the superintendent of public instruction determines that the calculation of state aid for a school district or charter school or the calculation of the school district's or charter school's budget limits within the previous three years did not conform with statutory requirements, the superintendent shall require correction of the errors as follows:

1. Corrections may be made in the current year or in the budget year, except that in case of hardship to the school district, the superintendent may approve corrections partly in one year and partly in the year after that year.

2. Errors in the calculation of state aid shall be corrected by increasing or decreasing the state aid to the school district or charter school in the year or years in which the correction is made.

3. Errors in the calculation of the school district's or charter school's budget limits shall be corrected at a public hearing by requiring the governing board to reduce or by allowing it to increase its budget by the amount of the correction to be made that year. Overbudgeting errors corrected as provided in this paragraph are exempt from the provisions of section 15‑905, subsections L and M. Not later than three days after the hearing and correction, the budget as revised shall be submitted electronically to the superintendent of public instruction. Nothing in this paragraph shall be construed to require a decrease in state aid not otherwise required by paragraph 2 of this subsection.

B. Subject to the review by the joint legislative budget committee, the superintendent of public instruction shall adjust state aid for a school district in the current year if the governing board of a school district requests the recalculation of state aid for a prior year due to a change in assessed valuation that occurred as the result of a judgment in accordance with section 42‑16213.

C. Notwithstanding subsection A of this section, a school district or charter school may not make upward revisions to its average daily membership attendance counts for a particular school year after June 30 of the subsequent school year.

D. For the purposes of this section, "state aid":

1. For school districts means state aid as determined in section 15‑971 and additional state aid as determined in section 15‑972.

2. For charter schools means state aid as determined in section 15‑185. END_STATUTE

Sec. 23. Section 15-948, Arizona Revised Statutes, is amended to read:

START_STATUTE15-948. Adjustment for growth in student count

A. Any school district may determine, after the first one hundred days or two hundred days in session, as applicable, of the current year, determine if it is eligible to increase its revenue control limit and district support level for the current year due to growth in the student population as follows:

1. Determine the student count used for calculating the base support level for the current year.

2. Determine the average daily membership attendance or adjusted average daily membership, whichever is applicable, through the first one hundred days or two hundred days in session, as applicable, of the current year.

3. Subtract the amount determined in paragraph 1 of this subsection from the amount determined in paragraph 2 of this subsection.

B. A school district may, after the first one hundred days or two hundred days in session, as applicable, of the current year, determine if it is eligible to compute an increase to its revenue control limit for the current year due to growth in the number of pupils in the group B categories of moderate or severe mental retardation, visual impairment, hearing impairment, multiple disabilities, multiple disabilities with severe sensory impairment, orthopedic impairment, preschool severe delay and emotionally disabled pupils enrolled in private special education programs or in school district programs for pupils with severe disabilities as follows:

1. Determine the weighted student count for all group B children with disabilities used for calculating the base support level for the current year.

2. Determine the weighted average daily membership attendance for all group B children with disabilities through the first one hundred days or two hundred days in session, as applicable, of the current year.

3. Subtract the amount determined in paragraph 1 of this subsection from the amount determined in paragraph 2 of this subsection.

4. If the amount determined in paragraph 2 of this subsection is greater than the amount determined in paragraph 1 of this subsection, the governing board of the school district may compute an increase to its revenue control limit and district support level for the current year by using the amount determined in paragraph 3 of this subsection for the weighted student count and the base level for the district for the current year.

C. If a school district meets the criteria specified in subsection A or B of this section, or both, the governing board of the school district may, after notice is given and a public hearing held as provided in section 15‑905, subsection D, at any time prior to May 15 may revise its budget to include the increase in its revenue control limit and district support level for the current year utilizing the procedure prescribed in subsection A or B of this section, or both. Not later than May 18, the budget as revised shall be submitted electronically to the superintendent of public instruction.

D. If the revised budget is adopted by the governing board at the public hearing and submitted electronically as provided in subsection C of this section, the school district shall receive state aid based upon the adjusted revenue control limit or the adjusted district support level in the manner specified in section 15‑971, except that in no event shall the school district receive less state aid than it would have received if it had not used this section.

E. If the adjusted revenue control limit results in an expenditure of funds in excess of school district revenues for the current year, the county school superintendent shall include within the revenue estimate for the budget year funds necessary to meet the liabilities incurred by the school district in the current year in excess of revenues received for the current year. END_STATUTE

Sec. 24. Section 15-954, Arizona Revised Statutes, is amended to read:

START_STATUTE15-954. Adjustment for tuition loss

A. The district may increase its base support level for tuition loss as prescribed in subsection B of this section if all of the following apply:

1. A school district receives tuition for high school pupils from a school district which is inside or outside of this state and which does not offer instruction in one or more high school grade levels.

2. The school district which had received the tuition loses the tuition because the other school district begins to offer instruction in one or more high school grade levels not previously offered.

3. The number of pupils for whom the district loses the tuition is equal to at least five per cent of the average daily membership attendance of pupils educated by the district in grades nine through twelve for the year prior to the year in which the other school district begins to offer the instruction.

B. The maximum amount by which a district may increase its base support level for tuition loss is determined as follows:

1. Determine the amount of tuition lost between the year before the other school district begins to offer instruction, which is the base year, and the year after the base year.

2. For the year after the base year, the maximum amount is seventy‑five per cent of the amount determined in paragraph 1 of this subsection.

3. For the second year after the base year, the maximum amount is fifty per cent of the amount determined in paragraph 1 of this subsection.

4. For the third year after the base year, the maximum amount is twenty‑five per cent of the amount determined in paragraph 1 of this subsection.

C. If the resident school district is a joint unified district and phases in the instruction over more than one year:

1. The computation prescribed by subsection A, paragraph 3 of this section shall be made separately for each phase by dividing the number of pupils in the phase by the average daily membership attendance of pupils in grades nine through twelve who are educated by the district of attendance in the year prior to the year in which the resident district begins to offer instruction for this phase.

2. The base year and the maximum amounts determined pursuant to subsection B of this section shall be computed separately for each phase.

3. The total increase in the base support level for a given fiscal year shall be the sum of the computations for each phase calculated pursuant to paragraph 2 of this subsection.

D. If the school district does not qualify for equalization assistance as provided in section 15‑971, the part of the primary property tax rate set to fund the tuition loss as provided in this section shall not be included in the computation of additional state aid revenues as prescribed in section 15‑972.END_STATUTE

Sec. 25. Section 15-991, Arizona Revised Statutes, is amended to read:

START_STATUTE15-991. Annual estimate by county school superintendent of monies for ensuing year

A. The county school superintendent, not later than August 1 each year, shall file in writing with the governing board of each school district in the county and the board of supervisors the superintendent's estimate of the amount of school monies required by each school district for the ensuing year, based on the budgets adopted by the governing boards of the school districts. The estimate shall contain:

1. A statement of the student count of each school district.

2. The total amount to be received for the year by each school district from the county school fund and the special county school reserve fund.

3. The ending cash balance from the previous year for each school district.

4. The anticipated interest earnings for each school district.

5. Revenues equal to the amount included in the adopted budget for the maintenance and operation section of the budget permitted by section 15‑947, subsection C, paragraph 2, subdivision (a), items (ii), (iii), (iv), (v) and (vi) and subdivision (d). The county school superintendent shall estimate the additional amounts needed for each school district from the primary property tax and the secondary property tax and shall certify such amounts to the board of supervisors in writing at the time of filing the estimate. When estimating the additional amount needed from the primary property tax for a school district that is not eligible for any equalization assistance as provided in section 15‑971, the county school superintendent shall include the school district governing board's estimate of the increase in the revenue control limit as prescribed by section 15‑948 for the applicable year, except that the percentage increase in average daily membership attendance used to compute the estimated increase in the revenue control limit may not exceed the average of the percentage increase in average daily membership attendance in the three years before the year for which the estimate is made.

B. The county school superintendent shall recompute equalization assistance for education for each school district as provided in section 15‑971, subsection A using the property values provided by the county assessor as provided in section 42‑17052. The county school superintendent shall certify in writing the amount of equalization assistance for education and the amount needed for each school district from the primary property tax to the board of supervisors on or before the third day prior to the day the board of supervisors is required to levy school district taxes as provided in section 15‑992.

C. The county school superintendent shall compute the additional amount to be levied as provided in section 15‑992, subsection B, using the property values provided in section 42‑17052. The county school superintendent shall certify in writing the additional amount to be levied to the county board of supervisors on or before the third day prior to the day the board of supervisors is required to levy school district taxes as provided in section 15‑992.

D. On or before September 1, the governing board of a school district shall file with the county school superintendent an estimate of the amount of title VIII of the elementary and secondary education act of 1965 monies which it is eligible to receive during the current year. On or before June 1, the governing board shall file with the county school superintendent and the superintendent of public instruction a statement of the actual amount of title VIII of the elementary and secondary education act of 1965 monies it received during the current year. This subsection does not apply to accommodation schools.

E. The department may collect any other similar or related information from school districts that the department may determine is necessary to carry out the purposes of this section. END_STATUTE

Sec. 26. Section 15-1021, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1021. Limitation on bonded indebtedness; limitation on authorization and issuance of bonds

A. Until December 31, 1999, a school district may issue class A bonds for the purposes specified in this section and chapter 4, article 5 of this title to an amount in the aggregate, including the existing indebtedness, not exceeding fifteen per cent of the taxable property used for secondary property tax purposes, as determined pursuant to title 42, chapter 15, article 1, within a school district as ascertained by the last property tax assessment previous to issuing the bonds.

B. From and after December 31, 1998, a school district may issue class B bonds for the purposes specified in this section and chapter 4, article 5 of this title to an amount in the aggregate, including the existing class B indebtedness, not exceeding five per cent of the taxable property used for secondary property tax purposes, as determined pursuant to title 42, chapter 15, article 1, within a school district as ascertained by the last assessment of state and county taxes previous to issuing the bonds, or one thousand five hundred dollars per student count as determined pursuant to section 15‑902, whichever amount is greater. A school district shall not issue class B bonds until the proceeds of any class A bonds issued by the school district have been obligated in contract. The total amount of class A and class B bonds issued by a school district shall not exceed the debt limitations prescribed in article IX, section 8, Constitution of Arizona.

C. Until December 31, 1999, a unified school district, as defined under article IX, section 8.1, Constitution of Arizona, may issue class A bonds for the purposes specified in this section and chapter 4, article 5 of this title to an amount in the aggregate, including the existing indebtedness, not exceeding thirty per cent of the taxable property used for secondary property tax purposes, as determined pursuant to title 42, chapter 15, article 1, within a unified school district as ascertained by the last property tax assessment previous to issuing the bonds.

D. From and after December 31, 1998, a unified school district, as defined under article IX, section 8.1, Constitution of Arizona, may issue class B bonds for the purposes specified in this section and chapter 4, article 5 of this title to an amount in the aggregate, including the existing class B indebtedness, not exceeding ten per cent of the taxable property used for secondary tax purposes, as determined pursuant to title 42, chapter 15, article 1, within a school district as ascertained by the last assessment of state and county taxes previous to issuing the bonds, or one thousand five hundred dollars per student count as determined pursuant to section 15‑902, whichever amount is greater. A unified school district shall not issue class B bonds until the proceeds of any class A bonds issued by the unified school district have been obligated in contract. The total amount of class A and class B bonds issued by a unified school district shall not exceed the debt limitations prescribed in article IX, section 8.1, Constitution of Arizona.

E. No bonds authorized to be issued by an election held after July 1, 1980 and before the effective date of this amendment to this section November 24, 2009 may be issued more than six years after the date of the election, except that class A bonds shall not be issued after December 31, 1999. No bonds authorized to be issued by an election held after the effective date of this amendment to this section November 24, 2009 may be issued more than ten years after the date of the election.

F. Except as provided in section 15‑491, subsection A, paragraph 3, bond proceeds shall not be expended for items whose useful life is less than the average life of the bonds issued, except that bond proceeds shall not be expended for items whose useful life is less than five years.

G. A joint technological education district shall not spend class B bond proceeds to construct or renovate a facility located on the campus of a school in a school district that participates in the joint district unless the facility is only used to provide career and technical education and is available to all pupils who live within the joint technological education district. If the facility is not owned by the joint technological education district, an intergovernmental agreement or a written contract shall be executed for ten years or the duration of the bonded indebtedness, whichever is greater. The intergovernmental agreement or written contract shall include provisions:

1. That preserve the usage of the facility renovated or constructed, or both, only for career and technology programs operated by the joint technology education district.

2. That include the process to be used by the participating district to compensate the joint technology education district in the event that the facility is no longer used only for career and technology education programs offered by the joint technological education district during the life of the bond.

H. A school district shall not authorize, issue or sell bonds pursuant to this section if the school district has any existing indebtedness from impact aid revenue bonds pursuant to chapter 16, article 8 of this title, except for bonds issued to refund any bonds issued by the governing board. END_STATUTE

Sec. 27. Section 15-1042, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1042. Timeline; student level data; definition

A. The department of education shall notify school districts and charter schools of electronic data submission procedures and shall distribute a list of the specific student level data elements that school districts and charter schools are required to submit. The department of education shall not make any changes to the student level data elements to be collected except for the following:

1. Student attendance data for a joint technological education district, including entry date and exit date, for classes that count towards the student's graduation requirements as provided for in section 15‑701.01.

2. Student attendance data for a community college, unless the college is owned, operated or chartered by an Indian tribe, including entry date and exit date, for classes that count towards the student's graduation requirements as provided for in section 15‑701.01.

B. Each school district and charter school shall submit electronic data on a school by school basis, including student level data, to the department of education in order for the school district or charter school to receive monies for the cost of educating students pursuant to this title.

C. The department of education shall grant a school district or charter school an extension to the deadline for the submission of student level data or may provide for an alternative method for the submission of student level data if the school district or charter school proves that good cause exists for the extension, and the school district or charter school shall continue to receive monies for the cost of educating students pursuant to this title. The request by a school district or charter school for an extension of the deadline for the submission of student level data shall include a justification for the extension and the status of current efforts towards complying with the submission of student level data.

D. A pupil or the parent or guardian of a pupil shall not be required to submit data that does not relate to the provision of educational services or assistance to the pupil.

E. Each student level data element shall include a statutory reference to the law that necessitates its collection.

F. Unless otherwise prescribed, school districts and charter schools shall begin to report new data elements on July 1 of the year that follows the effective date of the law that requires the collection of the data.

G. Student level data items submitted to the department of education by school districts pursuant to this section shall not be used to adjust funding levels or calculate the average daily membership attendance for the purpose of funding school districts at any time other than the fortieth, one hundredth and two hundredth day of the school year.

H. A school district or charter school is not required to submit student level data to the department of education more often than once every twenty school days.

I. Notwithstanding subsection L of this section, the student level data shall include reasons for the withdrawal if reasons are provided by the withdrawing pupil or the pupil's parent or guardian. For the purposes of this subsection, the department of education shall include in the specific student level data elements that school districts and charter schools are required to submit data relating to students who withdraw from school because the student is pregnant or because the student is the biological parent of a child.

J. The department of education shall adopt guidelines to remove outdated student level data collected by school districts and charter schools from the student accountability information system.

K. All student level data collected pursuant to this section is confidential and is not a public record. The data collected may be used for aggregate research and reporting.

L. For the purposes of this section, "student level data" means all data elements that are compiled and submitted for each student in this state and that are necessary for the completion of the statutory requirements of the department of education and the state board of education relating to the calculation of funding for public education, the determination of student academic progress as measured by student testing programs in this state, state and federal reporting requirements and other duties prescribed to the department of education or the state board of education by law. Student level data does not include data elements related to student behavior, discipline, criminal history, medical history, religious affiliation, personal physical descriptors or family information not authorized by the parent or guardian of the pupil. END_STATUTE

Sec. 28. Section 15-1251, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1251. State block grant for early childhood education; evaluation

A. The state block grant for early childhood education program is established in the state board of education. The purpose of the program is to promote improved pupil achievement by providing flexible supplemental funding for early childhood programs, including preschool programs for economically disadvantaged children, and programs that serve all public school pupils statewide who are in kindergarten programs and grades one, two and three.

B. Funding for the program for each fiscal year shall be allocated based on the number of pupils in kindergarten programs and grades one, two and three in each charter school or school district who were eligible for free lunches during the prior fiscal year under the national school lunch and child nutrition acts (42 United States Code sections 1751 through 1785). Any charter school or school district that did not determine for the prior fiscal year if its pupils in kindergarten programs and grades one, two and three were eligible for free lunches under the national school lunch and child nutrition acts shall receive funding for the program in the current fiscal year based on the number of its pupils in kindergarten programs and grades one, two and three who would have been eligible for free lunches in the prior fiscal year according to the statewide kindergarten programs and grades one, two and three eligibility average for all school districts and charter schools collectively for the prior fiscal year. Notwithstanding this section, a school district or charter school with an average daily membership attendance of more than six hundred pupils in kindergarten programs and grades one, two and three in the prior fiscal year shall have participated in the national school lunch and child nutrition acts free lunches program in the prior fiscal year to be eligible for program funding in the current fiscal year.

C. A school district or charter school that devotes part or all of its program funding to preschool programs shall comply with all of the following requirements:

1. Restrict the preschool program only to preschool children eligible for free or reduced price lunches under the national school lunch and child nutrition acts.

2. Allow participating pupils to receive preschool services only from a public, federally funded or private child care provider, each of which shall be licensed by the department of health services and each of which, beginning in fiscal year 1999‑2000, also shall be accredited by a state board of education approved organization that provides accreditation for preschool programs.

3. Provide all federally funded or private child care providers located within the school district or within ten miles of the charter school with information necessary for them to participate in the program, including names and addresses of children selected for participation and of their parents or guardians.

4. Provide all parents or guardians of children selected for the program with a list of licensed federally funded or private child care providers located within the school district or within ten miles of the charter school and explain to parents or guardians that they may choose to have their child receive services under the program from any provider on the list if that provider agrees to participate.

5. Allow at least fifty per cent of pupils selected for the program to receive preschool services from a federally funded or private child care provider of their parent's or guardian's own choosing.

6. Allow any eligible child care provider located within the school district or within ten miles of the charter school to participate in the program if it is willing to provide services at a unit cost similar to that paid to other providers in the area under the program.

7. Limit the use of contracts with federally funded and private child care providers to financial agreements pertaining to numbers of children to be served, hours of service to be provided per child, payment rates and other financial aspects of the program.

8. Limit to five per cent the amount of block grant monies that may be used locally for program administration.

9. Pay participating federally funded and private child care providers in a timely manner.

D. The legislative council shall conduct a programmatic evaluation of the state block grant for early childhood education program every three years. For this evaluation, the staff of legislative council shall develop outcome measures to indicate the effectiveness of the early childhood education program. The department of education shall assist the staff of legislative council in collecting any information necessary to complete the evaluation. END_STATUTE

Sec. 29. Section 15-1371, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1371. Equalization assistance for state educational system for committed youth; state education fund for committed youth

A. The superintendent of the state educational system for committed youth shall calculate a base support level as prescribed in section 15‑943 and a capital outlay revenue limit as prescribed in section 15‑961 for the educational system established pursuant to section 41‑2831, except that:

1. Notwithstanding section 15‑901:

(a) The student count shall be determined using the following definitions:

(i) "Daily attendance" means days in which a pupil attends an educational program for a minimum of two hundred forty minutes not including meal and recess periods. Attendance for one hundred twenty or more minutes but fewer than two hundred forty minutes shall be counted as one‑half day's attendance.

(ii) "Fractional student" means a pupil enrolled in an educational program of one hundred twenty or more minutes but fewer than two hundred forty minutes a day not including meal and recess periods. A fractional student shall be counted as one‑half of a full‑time student.

(iii) "Full‑time student" means a pupil enrolled in an educational program for a minimum of two hundred forty minutes a day not including meal and recess periods.

(b) "Seriously emotionally disabled pupils enrolled in a school district program as provided in section 15‑765" includes seriously emotionally disabled pupils enrolled in the department of juvenile corrections school system.

2. All pupils shall be counted as if they were enrolled in grades nine through twelve.

3. The teacher experience index is 1.00.

4. The base support level shall be calculated using the base level multiplied by 1.0, except that the state educational system for committed youth is also eligible beginning with fiscal year 1992‑1993 for additional teacher compensation monies as specified in section 15‑952.

5. Section 15‑943, paragraph 1 does not apply.

B. The superintendent may use sections 15‑855, 15‑942 and 15‑948 in making the calculations prescribed in subsection A of this section, except that for the 1992‑1993 fiscal year rapid decline shall not be used. The superintendent of the system and the department of education shall prescribe procedures for determining average daily attendance and average daily membership.

C. Equalization assistance for the state educational system for committed youth for the budget year is determined by adding the amount of the base support level and the capital outlay revenue limit for the budget year calculated as prescribed in subsection A of this section.

D. The state educational system for committed youth shall not receive twenty‑five per cent of the equalization assistance unless it is accredited by the north central association of colleges and secondary schools.

E. The state education fund for committed youth is established. Fund monies shall be used for the purposes of the state educational system for committed youth, and notwithstanding section 35‑173, monies appropriated to the fund shall not be transferred to or used for any program not within the state educational system for committed youth. State equalization assistance for the state educational system for committed youth as determined in subsection A of this section, other state and federal monies received from the department of education for the state educational system for committed youth and monies appropriated for the state educational system for committed youth, except monies appropriated pursuant to subsection F of this section, shall be deposited in the fund. The state treasurer shall maintain separate accounts for fund monies if the separate accounts are required by statute or federal law.

F. The department of juvenile corrections may seek appropriations for capital needs for land, buildings and improvements, including repairs and maintenance, required to maintain the state educational system for committed youth.

G. The state board of education shall apportion state aid and deposit it, pursuant to sections 35‑146 and 35‑147, in the state education fund for committed youth in an amount as determined by subsection A of this section. The apportionments shall be as follows:

1. On July 1, one‑third of the total amount to be apportioned during the fiscal year.

2. On October 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

3. On December 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

4. On January 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

5. On February 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

6. On March 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

7. On April 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

8. On May 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

9. On June 15, one‑twelfth of the total amount to be apportioned during the fiscal year.

H. In conjunction with the department of administration, the superintendent of the state educational system for committed youth shall establish procedures to account for the receipt and expenditure of state education fund for committed youth monies by modifying the current accounting system used for state agencies as necessary.END_STATUTE

Sec. 30. Section 15-1372, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1372. Equalization assistance for state educational system for persons in the state department of corrections; fund

A. The state department of corrections shall provide educational services for pupils who are under the age of eighteen years and pupils with disabilities who are age twenty‑one or younger who are committed to the state department of corrections. The department of education shall provide technical assistance to the state department of corrections on request and shall assist the state department of corrections in establishing program and personnel standards.

B. The state education fund for correctional education is established. Subject to legislative appropriation, fund monies shall be used for the purposes of providing education to pupils as specified in subsection A of this section. Notwithstanding section 35‑173, monies appropriated to the fund shall not be transferred to or used for any program not directly related to the educational services required by this section. State equalization assistance, other state and federal monies received from the department of education for which the pupils in correctional education programs qualify and monies appropriated for correctional education except monies appropriated pursuant to subsection C of this section shall be deposited in the fund. The state treasurer shall maintain separate accounts for fund monies if the separate accounts are required by statute or federal law.

C. The state department of corrections may seek appropriations for capital needs for land, buildings and improvements, including repairs and maintenance, required to maintain the educational services required by this section.

D. The state board of education shall apportion state aid and deposit it, pursuant to sections 35‑146 and 35‑147, in the state education fund for correctional education in an amount as determined by subsection E of this section. The apportionments are as follows: