HB2587 - 492R

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

Section 1. Section 15‑393, Arizona Revised Statutes, as amended by Laws 2010, chapter 17, section 6, is amended to read:

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

A. The management and control of the joint district are vested in the joint technical 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 technical education district or the spouse of an employee shall not hold membership on a governing board of a joint technical education district by which the employee is employed. A member of one school district governing board or joint technical 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 technical 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 technical 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 technical 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 technical 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, except that the existing joint technical education district governing board may vote at any time to adopt any alternative election system, subject to the approval of the united states department of justice.

3. If two or more school districts that participate in the joint technical education district are consolidated or unified as provided in section 15-444, 15-448 or 15-459, the newly consolidated or unified school district shall participate in the joint technical education district. The terms of the joint technical education district governing board members do not expire on the effective date of the consolidation or unification and continue until January 1 following the next general election after the beginning of operations of the consolidated or unified school district.

4. At that general election following the beginning of operations of the consolidated or unified school district, the new joint technical education district governing board members shall be elected as prescribed in paragraph 2 of this subsection and shall take office on January 1 following the general election.

3. 5. 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, for that pupil in both the school district and joint technical 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, 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. 6. The student count for the first year of operation of a joint technical 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 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.

(h) Pupils in an approved joint technical education district centralized program 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.

5. 7. 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 technical 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 technical 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. 8. A joint district may operate for more than one hundred seventy‑five days per year, with expanded hours of service.

7. 9. 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. 10. A joint district may use the carryforward provisions of section 15‑943.01 retroactively to July 1, 1993.

9. 11. 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 technical 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 use one hundred per cent of the monies received pursuant to this article to supplement and not supplant base year career and technical education and vocational education courses.

10. 12. A joint technical 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. 13. A joint technical 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 technical education district and each participating school district for satellite courses taught within the participating school district, or approved solely by the joint technical 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 technical 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 technical 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 technical education district and another joint technical 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 technical 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, including individualized education programs pursuant to section 15‑763.

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 technical 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 technical 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 technical education district and another joint technological education district, a school district, a charter school or a community college district be submitted by the joint technical education district to the joint legislative budget committee for review.

M. On or before December 31 of each year, each joint technical 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. The data submitted by each joint technical education district shall include the following:

1. The average daily membership of the joint district.

2. The program listings and program descriptions of programs offered by the joint district, including the course sequences for each program.

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

4. The completion rate for each program offered by the joint district. For the purposes of this paragraph, "completion rate" means the completion rate for students who are designated as concentrators in that program by the department of education under the career and technology approved plan.

5. The graduation rate from the school district of residence of students who have completed a program 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 technical 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 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 technical education district shall be 0.75. The sum of daily attendance, as provided in section 15-901, subsection A, paragraph 6 and the sum of the fractional student enrollment, as provided in section 15‑901, subsection A, paragraph 2, subdivision (a), for that pupil in both the member school district and joint technical education district courses provided at a community college pursuant to subsection K of this section or at a facility owned and operated by a joint technical education district that is not located on a site of a member district shall not exceed 1.75. The member school district and the joint district shall determine the apportionment of the daily attendance and student enrollment for that pupil between the member school district and the joint district, except the amount apportioned shall not exceed 1.0 for either entity.

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 technical education district. END_STATUTE

Sec. 2. 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 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. 3. Section 15-458, Arizona Revised Statutes, is amended to read:

START_STATUTE15-458. Formation of new district or districts by subdivision of existing district; division of assets

A. In a school district containing a student count of more than six hundred, a new school district or districts may be formed by a subdivision of the existing school district.

B. On the request of the governing board or on receipt of petitions bearing the signatures of at least ten per cent of the qualified electors in the area proposed to be a new school district or the signatures of at least fifty of the qualified electors in the area proposed to be a new school district, whichever is more, and at least ten per cent of the qualified electors in the area proposed to continue as the existing school district or at least fifty signatures of the qualified electors in the area proposed to continue as the existing school district, whichever is more, the county school superintendent shall within ten days shall call an election to determine if the existing school district should be divided and a new school district or districts formed, except that if the existing school district is a union high school district, the county school superintendent shall call the election only on the request of the governing boards of the union high school district and each of the common school districts comprising the union high school district or on receipt of petitions bearing the signatures of at least ten per cent of the qualified electors in each of the common school districts or at least fifty signatures of the qualified electors in each of the common school districts, whichever is more. This subsection does not require the submission of the signatures of more than fifty per cent of the qualified electors of the existing school district to the county school superintendent in order to call an election for the purposes of this section. The petition shall state the proposed boundaries of the school district or districts to be formed together with the student count, specific reasons why it is in the best interest of the current district residents to have a new district or districts formed and the amount of real property valuation within the school district or districts to be formed. No new school district may be formed unless the state board of education determines that the real property valuation per student count is sufficient to support the school district in a manner comparable to other school districts of similar size and that a sufficient number of pupils will exist in each of the new districts to ensure that educational programs and services will be of similar or better quality after the subdivision.

C. The election shall be held concurrently and as provided in section 15‑459, except that a majority of the votes cast by the qualified electors in each of the areas proposed as a school district must approve the division of the existing school district and the formation of the new school district.

D. The governing board of the existing school district shall prepare a projected list of assets for the existing district prior to the end of the fiscal year in which the election is held. The governing boards of the original and new school district or districts shall prepare a final statement of assets for the formerly existing school district as of the end of the fiscal year in which the election was held and shall have the statement of cash and bonded indebtedness certified by the county treasurer by August 30 of the year in which the new school district or districts become operative. The governing boards of the original school district and the new school district or districts shall set aside sufficient assets or provide other means to satisfy the liabilities of the former existing district except for bonded indebtedness and approve the final division of all assets by September 15 of the year in which the new school district or districts become operative. If one or more of the governing boards fail to provide for satisfying the liabilities and fail to approve the division of assets by September 15, the county attorney shall determine the means to satisfy the liabilities and final division of assets by October 1 of the fiscal year in which the new school district or districts become operative.

E. The division of the bonded indebtedness of the original school district shall be in accordance with the provisions of section 15‑457, subsection B.

F. An original or new school district formed by a subdivision of an existing school district or districts after June 30, 1992 is not eligible to determine its budget using the provisions of section 15‑949 or the support level weights prescribed in section 15‑943, paragraph 1. These districts are also not eligible to participate in a small district service program as prescribed in section 15‑365 or to apply to the state board of education for a capital levy adjustment as prescribed in section 15‑963.

G. If two or more common school districts are within the boundaries of a union high school district, two or more unified school districts may be formed by a subdivision of the existing union high school district and by unification with the common school districts as provided in this section, subject to the following provisions:

1. Formation of a unified school district pursuant to this subsection shall be initiated if a majority of the governing board members of each of the districts affected unites unite in a petition to the county school superintendent for the establishment of a unified school district or if ten per cent of the number of qualified electors who voted in whichever of the last two general elections resulted in the higher number of ballots cast and who reside in each of the areas proposed to be the new unified school districts unite in a petition to the county school superintendent for the establishment of a unified school district. The petition shall include a statement of the proposed boundaries of the new unified school districts and shall request that the subdivision of the union high school district and formation of the unified districts be submitted to the qualified electors who reside within the proposed districts. The petition shall also include a detailed description of desegregation funding and expenses for the resulting school district as set forth in paragraph 7 6 of this subsection and may include the new school district name and other information as desirable. On receipt of the petitions, the county school superintendent shall examine the petitions within fifteen days of receipt to determine their sufficiency including the adequacy of the signatures of electors. If the petitions are found sufficient, the county school superintendent shall call an election to be held to determine the question. The county school superintendent shall prepare and the governing board shall distribute a subdivision and unification plan that includes:

(a) The proposed boundary changes.

(b) The impact of the proposed boundary changes, including where pupils will attend school, changes in pupil transportation services, changes in availability of special education services, changes in pupil‑teacher ratio and operational costs.

(c) If paragraph 7 6 of this subsection applies to one or more of the existing school districts, a detailed description of desegregation funding and expenses for the resulting school districts as set forth in paragraph 7 6 of this subsection.

(d) Any other information the county school superintendent deems appropriate to include.

2. If the governing boards or the petitioners wish the new districts to receive unification assistance as provided in section 15‑912.01, they shall notify the department of education and the joint legislative budget committee by August 1 of the fiscal year before the new districts would begin operation and provide the department and the joint legislative budget committee with information required to project the costs of unification assistance to the new districts for the first year of operation. The department shall include sufficient monies to cover these unification costs in its budget request for state aid for the following fiscal year.

3. 2. The election shall be held as provided in section 15‑459, except that the ballot shall contain the words "subdivision and unification, yes" and "subdivision and unification, no", and there shall be one of the following two ballot questions, whichever is applicable, stated as follows:

(a) Should (insert the name of the district) union high school district be subdivided with boundaries identical to the boundaries of (insert the name of the districts) common school districts and simultaneously creating (insert the number of the districts) unified school districts with the respective common school districts as specified in the subdivision and unification plan?

(b) Should (insert the name of the district) union high school district be subdivided simultaneously with the subdivision of (insert the name of the districts) common school districts and simultaneously creating (insert the number of the districts) unified school districts with the subdivided common school districts as specified in the subdivision and unification plan?

4. 3. If the formation of the new unified school districts is authorized, the terms of the governing board members of the common and union high school districts do not expire on the effective date of unification but continue until January 1 following the next general election, during which time the members of the governing boards of the previously existing school districts shall serve as the governing board of the new school district in which they reside. At the next general election held after the formation and thereafter, members shall be elected as prescribed in section 15‑448, subsection E. The governing boards of the new unified school districts shall prepare policies, curricula and budgets for the new unified school districts. The policies prepared by the governing boards shall include the provisions of section 15‑459, subsection M.

5. 4. If the common school district is not subdivided, the new unified school district that includes the boundaries of the previously existing common school district shall assume the bonded indebtedness of that previously existing common school district. If the common school district is subdivided, the provisions of subsection E of this section shall apply.

6. 5. If the common school district is not subdivided, existing bond authorization of the common school districts automatically continues for the original purpose authorized. If the common school district is subdivided, the existing bond authorization of the common school district will expire unless it is divided between the new unified school districts as specified in the subdivision and unification plan.

7. 6. If any of the school districts were authorized to budget for expenses of complying with or continuing to implement activities that were required or permitted by court order of desegregation or administrative agreement with the United States department of education office for civil rights directed towards remediating alleged or proven racial discrimination pursuant to section 15‑910, this authorization does not expire on the effective date of the subdivision and unification but only applies to schools included in the court order or administrative agreement.

8. 7. If the union high school district and the common school district or districts with which it is unified all have authorization for an override as provided in section 15‑481 that would have continued after the subdivision and unification, the override authorization continues for the new district and expires at the time that the earliest override would have expired.

9. 8. If one or more of the previously existing school districts were participating in a career ladder program pursuant to chapter 9, article 1.1 of this title before subdivision and unification, notwithstanding any other law the state board shall expedite the processing of and may approve an updated application for program reapproval for the new school district that includes the existing school district that was participating in the program.

10. 9. The employee's years of employment in the previously existing school district shall be included in determining the employee's years of employment in the new school district after a subdivision and unification. An employee who was entitled to continuing contract status in the previously existing school district is entitled to continuing employment contract status in the new school district.

11. 10. The base salary and benefits of each employee for the first year of operation of the new school district after a subdivision and unification shall not be lower than the employee's base salary and benefits for the prior year in the previously existing school district.

12. 11. Notwithstanding paragraphs 10 9 and 11 10 of this subsection and pursuant to section 15‑544, nothing in this section shall be construed to restrict the ability of the governing board to implement a reduction in force or to scale back salaries of certified teachers, administrators or noncertificated employees for reasons of economy or to improve the efficient conduct of schools within the district following a subdivision and unification. END_STATUTE

Sec. 4. Section 15-912, Arizona Revised Statutes, is amended to read:

START_STATUTE15-912. Consolidation assistance

A. A resulting school district after merger of school districts may budget for consolidation assistance as provided in subsection B of this section if the school districts which that merge include any of the following:

1. A common school district and at least one other common school district or at least one unified school district.

2. A high school district and at least one other high school district or at least one unified school district.

3. A unified school district and at least one other unified school district or at least one high school district or at least one common school district.

B. The eligible school district may increase the revenue control limit and the district support level for the first year of operation by an amount determined as follows:

1. Through December 31, 2006, five per cent of the revenue control limit.

2. Beginning January 1, 2007, the amount of any transitional costs that are directly associated with routine formalities that are necessary as a result of consolidation such as changing of signs, letterhead, and stationery and similar issues.

C. A school district which budgets for consolidation assistance pursuant to this section may not budget for unification assistance pursuant to section 15‑912.01 during the one year period for which the consolidation assistance is in effect. END_STATUTE

Sec. 5. Section 15-912.01, Arizona Revised Statutes, is amended to read:

START_STATUTE15-912.01. Unification assistance

A. New unified school districts formed after a subdivision and unification as provided in section 15‑458, subsection G or section 15‑459, subsection B, paragraph 5 or new unified school districts formed from a common school district and a high school district pursuant to section 15‑448 may budget for unification assistance as provided in subsection B of this section.

B. The eligible school district may increase the revenue control limit and the district support level for the first year of operation by an amount determined as follows the following amounts:

1. Through December 31, 2006, five per cent of the revenue control limit.

2. 1. Beginning January 1, 2007, For the first year of operation, the amount of any transitional costs that are directly associated with routine formalities that are necessary as a result of unification such as changing of signs, letterhead, and stationery and similar issues. The school district shall conduct an election to seek voter approval to fund one-half of the increase in the revenue control limit prescribed in this paragraph with an assessment on the secondary property tax rate of the school district. If approved by a majority of the qualified electors voting on the question, the school district shall fund one-half of the increase in the revenue control limit prescribed in this paragraph with an assessment on the secondary property tax rate of the school district, and equalization assistance for the school district pursuant to section 15-971 shall be reduced accordingly. If a majority of the qualified electors voting on the question fail to approve the proposed secondary property tax rate increase, the school district shall not be eligible for unification assistance. If an election is conducted pursuant to section 15-458, subsection G or section 15-459, subsection B, paragraph 5, the proposed increase in the property tax rate shall be submitted to the voters at the same election.

2. In addition to the amount prescribed in paragraph 1, for the second and third years of operation, three per cent of the revenue control limit. Monies budgeted pursuant to this paragraph shall be used only to equalize the salaries of teachers employed by the school district. A school district that budgets monies pursuant to this paragraph shall develop a new organization flow chart for the school district that is designed to reduce administrative costs, increase the amount of dollars used in the classroom and use the savings from reduced administrative costs to equalize the salaries of teachers employed by the school district. The school district shall conduct an election to seek voter approval to fund one-half of the increase in the revenue control limit prescribed in this paragraph with an assessment on the secondary property tax rate of the school district. If approved by a majority of the qualified electors voting on the question, the school district shall fund one-half of the increase in the revenue control limit prescribed in this paragraph with an assessment on the secondary property tax rate of the school district, and equalization assistance for the school district pursuant to section 15-971 shall be reduced accordingly. If a majority of the qualified electors voting on the question fail to approve the proposed secondary property tax rate increase, the school district shall not be eligible for unification assistance. If an election is conducted pursuant to section 15-458, subsection G or section 15-459, subsection B, paragraph 5, the proposed increase in the property tax rate shall be submitted to the voters at the same election.

C. A school district which that budgets for unification assistance pursuant to this section may not budget for consolidation assistance pursuant to section 15‑912 during the one year period for which the unification assistance is in effect. END_STATUTE

Sec. 6. Effective date

Sections 15‑448, 15‑458 and 15‑912, Arizona Revised Statutes, as amended by this act, are effective from and after June 30, 2014.

Sec. 7. Delayed repeal

Section 15-912.01, Arizona Revised Statutes, as amended by this act, is repealed from and after June 30, 2014.