HB2301 - 501R

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

Section 1. Section 15-962, Arizona Revised Statutes, is amended to read:

START_STATUTE15-962. Soft capital allocation

A. A soft capital allocation per student count is established for fiscal year 1999‑2000, as follows:

1. For kindergarten programs and grades one through eight, multiply one hundred ninety‑four dollars thirty cents by the weight which that corresponds to the student count for kindergarten programs and grades one through eight for the school district as provided in section 15‑943, paragraph 1, subdivision (a), column 3.

2. For grades nine through twelve, multiply one hundred ninety‑four dollars thirty cents by the weight which that corresponds to the student count as provided in section 15‑943, paragraph 1, subdivision (a), column 3.

3. For a school district with a student count of six hundred or more in kindergarten programs and grades one through eight or grades nine through twelve, multiply one hundred ninety‑four dollars thirty cents by 1.158.

4. For programs for preschool children with disabilities, multiply one hundred ninety‑four dollars thirty cents by 1.158.

B. Beginning with fiscal year 1999‑2000, the soft capital allocation prescribed in subsection A of this section shall be adjusted by the growth rate prescribed by law, subject to appropriation.

C. Beginning in fiscal year 1999‑2000, the soft capital allocation for a school district is computed as follows:

1. Select the applicable soft capital allocation per student count for the school district as provided in subsection A of this section.

2. Multiply the amount selected in paragraph 1 of this subsection by the appropriate student count of the school district. The student count of the school district shall not include any pupils in a charter school sponsored by the school district pursuant to section 15‑185, subsection A, paragraph 3.

D. A school district shall receive its soft capital allocation in the amount determined in this section from monies appropriated for this purpose to the department of education. Soft capital allocation monies shall only may be used for short‑term capital items that are required to meet academic adequacy standards such as technology, textbooks, library resources, instructional aids, pupil transportation vehicles, furniture and equipment. School districts shall not use any portion of soft capital allocation monies for maintenance and operation expenses. School districts may use soft capital allocation monies to meet administrative soft capital purposes after complying with the adequacy standards prescribed in section 15‑2011.

E. School districts shall establish a district soft capital allocation fund and shall use the monies only for the purposes prescribed in subsection D of this section. The ending unexpended budget balance in the school district's soft capital allocation fund may be used in following fiscal years for short‑term capital items. School districts shall provide to the superintendent of public instruction an itemized accounting on forms provided by the department of education that details the expenditures of soft capital allocation monies at each school in the district. The superintendent of public instruction shall forward a copy of the report to the school facilities board established by section 15‑2001.

F. A school district governing board may petition the state board of education for authority to budget and accumulate for school construction, building renovation or soft capital purposes a portion of the prior year's ending cash balance, not to exceed the amount of title VIII of the elementary and secondary education act of 1965 monies which the school district was entitled to receive in the prior year, as computed by the superintendent of public instruction, if:

1. The governing board filed with the United States department of education division of impact aid an approved application for federal assistance for construction under P.L. public law 81‑815 for the current or budget year and has been advised by the division of impact aid that no federal monies are available to fund its application.

2. The school district has a computed assessed valuation per pupil which that is below the median amount computed by the superintendent of public instruction for all school districts.

3. The governing board has used any available revenues to reduce its primary tax rate to zero for any year in which it petitions to budget and accumulate monies received under title VIII of the elementary and secondary education act of 1965 for school construction purposes.

The state board of education may grant approval to a school district governing board to annually budget in the unrestricted capital outlay section of the budget a portion of the cash balance, not to exceed the amount of title VIII of the elementary and secondary education act of 1965 monies which the school district was entitled to receive in the prior year as computed by the superintendent of public instruction.

G. The state board of education shall not include in the aggregate expenditures of local revenues as determined in section 15‑911 the amount of revenues collected pursuant to the soft capital allocation limit. The amount of revenues collected for the soft capital allocation limit is the capital levy as authorized by law. END_STATUTE

Sec. 2. Section 43-1089.01, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1089.01. Tax credit; public school fees and contributions; definitions

A. A credit is allowed against the taxes imposed by this title for the amount of any fees or cash contributions by a taxpayer or on the taxpayer's behalf pursuant to section 43‑401, subsection I during the taxable year to a public school located in this state for the support of extracurricular activities or character education programs of the public school, but not exceeding:

1. Two hundred dollars for a single individual or a head of household.

2. Three hundred dollars in taxable year 2005 for a married couple filing a joint return.

3. Four hundred dollars in taxable year 2006 and any subsequent taxable year for a married couple filing a joint return.

B. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one‑half of the tax credit that would have been allowed for a joint return.

C. The credit allowed by this section is in lieu of any deduction pursuant to section 170 of the internal revenue code and taken for state tax purposes.

D. If the allowable tax credit exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the taxpayer may carry the amount of the claim not used to offset the taxes under this title forward for not more than five consecutive taxable years' income tax liability.

E. The site council of the public school that receives contributions that are not designated for a specific purpose shall determine how the contributions are used at the school site. If a charter school does not have a site council, the principal, director or chief administrator of the charter school shall determine how the contributions that are not designated for a specific purpose are used at the school site. If at the end of a fiscal year a public school has unspent contributions that were previously designated for a specific purpose or program and that purpose or program has been discontinued or has not been used for two consecutive fiscal years, these contributions shall be considered undesignated in the following fiscal year for the purposes of this subsection.

F. A public school that receives fees or a cash contribution pursuant to subsection A of this section shall report to the department, in a form prescribed by the department, by February 28 of each year the following information:

1. The total number of fee and cash contribution payments received during the previous calendar year.

2. The total dollar amount of fees and contributions received during the previous calendar year.

3. The total dollar amount of fees and contributions spent by the school during the previous calendar year, categorized by specific extracurricular activity or character education program.

G. For the purposes of this section:

1. "Character education programs" means a program described in section 15‑719.

2. "Extracurricular activities" means school sponsored activities that require enrolled students to pay a fee in order to participate, including fees for:

(a) Band uniforms.

(b) Equipment or uniforms for varsity athletic activities.

(d) In‑state or out‑of‑state trips that are solely for competitive events. Extracurricular activities do not include any senior trips or events that are recreational, amusement or tourist activities.

3. "Public school" means a school that is part of a school district, a joint technical education district or a charter school.END_STATUTE

Sec. 3. Conforming legislation

The legislative council staff shall prepare proposed legislation conforming the Arizona Revised Statutes to the provisions of this act for consideration in the fiftieth legislature, second regular session.

Sec. 4. Unencumbered monies; uses; short-term capital items

A public school may use up to fifty per cent of the unencumbered contributions it received in any previous fiscal year pursuant to section 43‑1089.01, Arizona Revised Statutes, for short‑term capital items such as technology, textbooks, library resources, instructional aids, pupil transportation vehicles, furniture and equipment in fiscal years 2011-2012 and 2012-2013. This section does not apply to contributions received after tax year 2010. A public school that uses unencumbered contributions for short-term capital items shall report these expenditures to the joint legislative budget committee at the end of each fiscal year.