SB1617 - 501R

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

Section 1. Section 15‑185, Arizona Revised Statutes, as amended by Laws 2010, seventh special session, chapter 8, section 1 and Laws 2010, second regular session, chapter 17, section 2, chapter 306, section 1, chapter 332, section 4 and chapter 333, section 2, 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, the state board for charter schools, a university under the jurisdiction of the Arizona board of regents, a community college district or a group of community college districts.

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, the state board for charter schools, a university, a community college district or a group of community college districts are as follows:

1. The charter school shall calculate a base support level as prescribed in section 15‑943, except that section 15‑941 does 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, 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, the state board for charter schools, the sponsoring university, the sponsoring community college district or the sponsoring group of community college districts 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 six hundred seven dollars fifty twenty‑one dollars ninety‑seven cents per student count in kindergarten programs and grades one through eight and one thousand eight hundred seventy‑three dollars fifty‑two ninety dollars thirty‑eight 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, 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 technical education district and resides within the boundaries of a school district participating in the joint technical education district, the sum of the average daily membership for that pupil in the charter school and the joint technical 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 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 technical education district and resides within the boundaries of a school district participating in the joint technical education district, the sum of the average daily membership for that pupil in the charter school and the joint technical education district shall be reduced to 1.25 and shall be apportioned between the charter school and the joint technical education district based on the percentage of total time that the pupil is enrolled or in attendance in the charter school and the joint technical 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, the state board for charter schools, a university, a community college district or a group of community college districts, 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, a university, a community college district, a group of community college districts 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 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. Notwithstanding any other law, a university under the jurisdiction of the Arizona board of regents, a community college district or a group of community college districts shall not include any student in the student count of the university, community college district or group of community college districts for state funding purposes if that student is enrolled in and attending a charter school sponsored by the university, community college district or group of community college districts.

M. The governing body of a charter school shall transmit a copy of its proposed budget or the summary of the proposed budget and a notice of the public hearing to the department of education for posting on the department of education's website no later than ten days before the hearing and meeting. If the charter school maintains a website, the charter school governing body shall post on its website a copy of its proposed budget or the summary of the proposed budget and a notice of the public hearing.

N. The governing body of a charter school may contract with the private organization that is approved by the state board of education pursuant to section 15‑792.02 to provide approved board examination systems for the charter school.

O. 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. Repeal

Section 15‑185, Arizona Revised Statutes, as amended by Laws 2010, chapter 318, section 1, is repealed.

Sec. 3. Section 15-236, Arizona Revised Statutes, is amended to read:

START_STATUTE15-236. Special education programs; program and fiscal audits

A. The department of education shall by December 1, 1981 and every two years thereafter complete a cost study of special education programs. Such study shall include, but is not limited to, the cost of providing special education programs to pupils prescribed by section 15‑761.

B. A. The department of education shall conduct program and fiscal audits of selected district special education programs. The audits shall be designed to determine the degree of compliance with existing statutes and regulations and the appropriate placement of students in special education programs. A report of the findings of such audits shall be completed on or before January 3 of each year. If the department of education determines that a child has been inappropriately placed in a special education program of a school district, the district's weighted student count for educational support services for students in group B as provided in section 15‑943 shall be recomputed and the district's entitlement to state aid adjusted accordingly.

C. B. For each fiscal year the department of education shall request a separate line item appropriation for program and fiscal audits of special education programs in the budget estimate submitted pursuant to section 35‑113. END_STATUTE

Sec. 4. Repeal

Section 15-249, Arizona Revised Statutes, is repealed.

Sec. 5. Title 15, chapter 2, article 2, Arizona Revised Statutes, is amended by adding a new section 15-249, to read:

START_STATUTE15-249. Department of education; education learning and accountability system; reports; reviews

A. Subject to appropriation of state monies, or receipt of federal monies, private donations or grants from any lawful public or private source for this purpose, the department of education, in coordination with the data governance commission established by section 15‑249.01, shall develop and implement the education learning and accountability system to collect, compile, maintain and report student level data for students attending public educational institutions that provide instruction to pupils in preschool programs, kindergarten programs, grades one through twelve and postsecondary educational programs in this state.

B. The education learning and accountability system shall:

1. Maintain longitudinal, student level data, including student demographic, grade level, assessment, teacher assignment and other data required to meet state and federal reporting requirements.

2. Incorporate the student accountability information system prescribed in chapter 9, article 8 of this title.

3. Be accessible through commonly used internet web browsers to carry out the data collection, compilation and reporting duties prescribed in this title.

C. The department of education may contract with a third party to carry out the purposes of this section.

D. The department of education, in coordination with the data governance commission, shall develop a detailed plan to develop and implement the education learning and accountability system.

E. The department of education shall present the plan developed pursuant to subsection D of this section to the state board of education for review and approval. The department of education shall continue to provide quarterly reports to the state board of education, or on request, for review and approval of the state board of education, on the development and implementation of the education learning and accountability system. All reports provided shall include progress and expenditures to date, timelines and cost estimates for completion.

F. Any contract awarded pursuant to subsection c of this section shall allow the superintendent of public instruction to renew the contracts for two subsequent periods of not more than three years each and shall prescribe the circumstances under which the superintendent of public instruction may terminate the contracts. The contracts shall allow this state to cancel any contract at any time after the first year of operation, without penalty to this state, on ninety days' written notice and shall require the contractor to be in compliance at all times with state and federal law.

G. Any contract awarded pursuant to subsection c of this section may provide for annual contract price or cost adjustments, except that any adjustments may be made only once each year effective on the anniversary of the contract's effective date. Any adjustment made pursuant to the terms of the contract must be applied to the total payments made to the contractor for the previous contract year and shall not exceed the percentage change in the average consumer price index as published by the united states department of labor, bureau of labor statistics between that figure for the latest calendar year and the next previous calendar year. Any price or cost adjustments that are different than those authorized in this subsection may be made only if the legislature specifically authorizes the adjustments and appropriates monies for that purpose, if required.

H. The superintendent of public instruction shall not award a contract pursuant to this section unless:

1. The superintendent of public instruction receives an acceptable proposal pursuant to any request for proposals. For the purposes of this paragraph, "acceptable proposal" means a proposal that substantially meets all of the requirements or conditions prescribed in this section and in the request for proposals.

2. The proposal offers a level and quality of services that equal or exceed the services that would be provided by this state.

3. The contractor provides audited financial statements for the previous five years, or for each year that the contractor has been in operation if fewer than five years, and provides other financial information as requested.

I. The sovereign immunity of this state does not apply to any contractor who is a party to any contract pursuant to this section. The contractor or any agent of the contractor may not plead the defense of sovereign immunity in any action arising out of the performance of the contract.

J. The terms of any contract pursuant to this section are subject to review by the joint legislative budget committee before placement of any advertisement that solicits a response to a request for proposals. Any proposed modification or amendment to the contract is subject to prior review by the joint legislative budget committee.

K. During the first year of operation under a contract executed pursuant to this section, the contracting entity shall submit monthly reports to the department of education as prescribed by the department. After the first year of operation under the contract, the contracting entity shall submit quarterly reports to the department as prescribed by the department.

L. At the end of the second year of a contract executed pursuant to this section, an independent evaluator selected by the superintendent of public instruction shall conduct and complete a performance review to determine if the contracting entity has met the goals specified in the contract. The independent evaluator shall submit a report of the independent evaluator's findings to the governor, the president of the senate and the speaker of the house of representatives on or before May 1, and shall provide a copy of this report to the secretary of state. END_STATUTE

Sec. 6. Title 15, chapter 2, article 2, Arizona Revised Statutes, is amended by adding section 15-249.02, to read:

START_STATUTE15-249.02. Education learning and accountability fund; appropriation

The education learning and accountability fund is established consisting of legislative appropriations and fees collected from universities and community college districts in support of the education learning and accountability system for public education. The department of education shall administer the fund. Monies in the fund are subject to legislative appropriation and are exempt from the provisions of section 35‑190 relating to lapsing of appropriations. All monies deposited in the fund for fiscal year 2011‑2012 are appropriated for use in fiscal year 2011‑2012 and fiscal year 2012‑2013. Monies in the fund may only be used for the purposes prescribed in section 15‑249 and are subject to the requirements for review by the joint legislative budget committee prescribed in that section. END_STATUTE

Sec. 7. Section 15‑393, Arizona Revised Statutes, as amended by Laws 2010, chapter 285, section 1 and chapter 306, section 3, 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.

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 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 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. Pupils in an approved joint technical education district satellite program may generate an average daily attendance for attendance hours during any hour of the day, during any day of the week and at any time beginning July 1 through June 30 of each fiscal year.

4. 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) 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.

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.

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 nine who enrolls in courses offered by the joint technical education district shall not be included in the joint district's average daily attendance or student count or average daily membership.

(b) A student in a kindergarten program or in grades one through eight nine 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. 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 technical education district and that has used monies received pursuant to this article to supplant career and technological technical 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 technical 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. 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. A joint technical education district or a school district that is part of a joint district shall only include pupils in grades nine ten through twelve in the calculation of student count or 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. Student count and 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 student count and 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 technical 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 in grade ten, eleven or twelve 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. 8. Repeal

Section 15‑393, Arizona Revised Statutes, as amended by Laws 2010, chapter 318, section 5, is repealed.

Sec. 9. 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 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 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.

Sec. 10. Section 15‑901, Arizona Revised Statutes, as amended by Laws 2010, seventh special session, chapter 8, section 2 and Laws 2010, second regular session, chapter 220, section 2, chapter 306, section 6 and chapter 332, section 15, 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 through the first one hundred days or two hundred days in session, as applicable.

2. 1. "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 who are enrolled on September 15, November 15, January 15 and March 15, divided by four. 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 the purposes of this section, school districts and charter schools shall report student absence data to the department of education at least once every sixty days in session. For computation purposes, the effective date of withdrawal shall be retroactive to the last day of actual attendance of the student or excused absence.

(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 at least three hundred fifty‑six hours for a one hundred eighty day school year, or the instructional hours prescribed in this section. 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, 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. The average daily membership of a part‑time high school student shall be 0.75 if the student is enrolled in an instructional program of three subjects that meet at least five hundred eighty hours for a one hundred eighty day school year, or the instructional hours prescribed in this section. The average daily membership of a part‑time high school student shall be 0.5 if the student is enrolled in an instructional program of two subjects that meet at least three hundred sixty hours for a one hundred eighty day school year, or the instructional hours prescribed in this section. The average daily membership of a part‑time high school student shall be 0.25 if the student is enrolled in an instructional program of one subject that meets at least one hundred eighty hours for a one hundred eighty day school year, or the instructional hours prescribed in this section.

(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, seven hundred twelve hours for a one hundred eighty day school year, or the instructional hours prescribed in this section. 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, least eight hundred ninety hours for a one hundred eighty day school year, or the instructional hours prescribed in this section. 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 years 2005‑2006 through 2009‑2010, the program shall meet at least one thousand sixty‑eight hours. In fiscal year 2010‑2011 and each fiscal year thereafter, the program shall meet at least one thousand 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 an instructional program of four or more subjects that count toward graduation as defined by the state board of education, that meets for a total of at least seven hundred twenty hours for a one hundred eighty day school year, or the instructional hours prescribed in this section in a recognized high school. A full‑time student shall not be counted more than once for computation of average daily membership. The average daily membership of a full-time high school student shall be 1.0 if the student is enrolled in at least four subjects that meet at least seven hundred twenty hours for a one hundred eighty day school year, or the equivalent instructional hours prescribed in this section.

(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 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 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 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 either:

(a) Grades one through eight.

(b) Grades one through nine pursuant to section 15‑447.01.

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:

(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 1, 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.

(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 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 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 the following amounts plus the percentage increases to the base level as provided in sections 15‑902.02, 15‑918.04, 15‑919.04 and 15-952, except that if a school district or charter school is eligible for an increase in the base level as provided in two or more of these sections, the base level amount shall be calculated by compounding rather than adding the sum of one plus the percentage of the increase from those different sections:

(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.

(c) For fiscal years 2009‑2010, and 2010‑2011 and 2011‑2012, three thousand two hundred sixty‑seven dollars seventy‑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‑3" means kindergarten programs and grades one through three.

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

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

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

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

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

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

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

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

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

25. "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.

26. "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.

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

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

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

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

Sec. 11. Repeal

Section 15‑901, Arizona Revised Statutes, as amended by Laws 2010, chapter 318, section 12, is repealed.

Sec. 12. Section 15-910.02, Arizona Revised Statutes, is amended to read:

START_STATUTE15-910.02. Energy and water savings accounts

A. Each school district may establish an energy and water savings account that consists of a designated pool of capital investment monies to fund energy or water saving projects in school facilities. A school district may deposit in the account monies from one or more companies that provide utility, energy or water services to the school district pursuant to contracts that are executed between the companies and the school district and that are designed to save energy or water in school facilities. A school district may use monies in the energy and water savings account for payments under a performance contract entered into pursuant to section 15‑213 or 15‑213.01.

B. The auditor general and the department of education shall prescribe the appropriate designation of the energy and water savings accounts in the uniform system of financial records and shall prescribe reporting requirements on the appropriate budget forms and annual financial report forms.

C. Monies deposited in an energy and water savings account shall be used as a designated pool of capital investment monies to pay for the incremental cost of energy or water savings measures in school facilities that are owned or operated by the school district. Any contract entered into pursuant to this section shall contain an agreement between the qualified provider or utility, energy or water services company and the school district that each party has performed a reasonable investigation to determine that the measures contemplated by the contract will result in stated energy or water savings. Contract terms may extend the period of the capital investment repayment schedule prescribed in subsection G of this section up to the expected life of the energy or water savings measures, or twenty-five years, whichever is shorter.

D. Expenditures from an energy and water savings account shall be used only for the following:

1. Projects or measures pursuant to a contract pursuant to this section that save energy or water in school facilities that are owned or operated by the school district. Monies may be used pursuant to this paragraph to provide technical assistance regarding energy or water savings to school districts by a qualified provider or a utility, energy or water services company.

2. The repayment to the qualified provider or utility, energy or water services company of capital investment monies deposited in the account plus reasonable carrying charges pursuant to the terms of the contract. Reasonable carrying charges for investor owned utilities will be the most recent authorized rate of return approved by the Arizona corporation commission.

E. School districts shall procure energy or water savings measures or services with monies distributed from the energy and water savings accounts.

F. Before the implementation of the energy or water savings measures or services, the qualified provider or utility, energy or water services company shall compute, and the school district shall review and approve, the estimated amount of the energy or water savings and the associated impact on energy or water costs to be achieved by the school district on an annual and monthly basis over the expected life of the measures and shall include these estimates in the contract. The qualified provider or utility, energy or water services company and the school district shall update the annual and monthly energy or water savings and associated cost impact estimates annually based on actual experience.

G. Before the implementation of the energy or water savings measures or services, the qualified provider or utility, energy or water services company and the school district shall jointly develop a schedule of monthly payments for repayment of the capital investment monies to the qualified provider or utility, energy or water services company. The repayment schedule shall result in lower energy or water costs, which shall include the cost of the installed energy or water savings measures for the school district over the life of the installed measures that the school district would have experienced without the installation of the measures. The repayment schedule shall be included in the contract.

H. The school district shall transfer on a monthly basis the amount of the monthly payment prescribed pursuant to subsection G of this section to the energy and water savings account from the maintenance and operation portion of the school district's budget to repay any unpaid balance of the capital investment previously deposited in the energy and water savings account from the qualified provider or utility, energy or water services company plus a reasonable carrying charge. For the period of time that the company's capital investment monies and reasonable carrying charge remain unpaid, the qualified provider or utility, energy or water services company shall provide a separate billing or billing component to repay the capital investment on a monthly basis, pursuant to the repayment schedule prescribed pursuant to subsection G of this section, which shall be paid by the school district from the energy and water savings account. The school district's general budget limit shall be reduced by the amount of monies transferred to the energy and water savings account pursuant to this section.

I. After the balance of the qualified provider or utility, energy or water services company's capital investment monies deposited in the energy and water savings account plus a reasonable carrying charge are repaid in full by the school district, the school district may discontinue the deposit in the energy and water savings account of amounts that are prescribed in subsection H of this section.

J. Any monies associated with an energy or water savings project remaining in the energy and water savings account after the capital investment monies of the qualified provider or utility, energy or water services company plus a reasonable carrying charge are repaid in full may be transferred to the maintenance and operation portion of the school district's budget, and the general budget limit may be increased by the amount transferred.

K. School districts may deposit energy‑related rebate or grant monies in the energy and water savings account to assist in funding energy or water savings projects. These rebate or grant monies shall be used to reduce the total cost of energy or water savings projects and to reduce the amount of capital investment monies received from and repaid to utility, energy or water services companies. School districts are not required to repay the rebate or grant monies in the manner described in subsection H of this section, pursuant to the agreements with the providers of rebate or grant funds.

L. School districts shall not use or deposit any excess utilities monies budgeted pursuant to section 15-910 or 15-910.04 in the energy and water savings account.

M. School districts may deposit monies from other funding sources, including from clean renewable energy bonds and the American recovery and reinvestment act of 2009 funding, in the energy and water savings account to fund energy or water saving projects in school facilities. These monies shall be repaid in a manner consistent with this section and pursuant to the contract between the school district and the provider of the funding.

N. This section does not impose an obligation on any energy utility, water utility, public service corporation or agricultural improvement district to invest monies or contract with any school district.

O. For all projects carried out under this section, the district shall report to the school facilities board:

1. The name of the project.

2. The qualified provider.

3. The total cost of the project.

4. The expected energy and cost savings.

P. For all projects carried out under this section, the district shall report to the school facilities board, by October 15 each year, the actual energy and cost savings.END_STATUTE

Sec. 13. Repeal

Section 15‑910.04, Arizona Revised Statutes, is repealed.

Sec. 14. Delayed repeal

Sections 15-918, 15-918.01, 15-918.02, 15-918.03, 15-918.04, 15-918.05, 15-919, 15-919.02, 15-919.03, 15-919.04, 15-919.05 and 15-919.06, Arizona Revised Statutes, are repealed from and after June 30, 2015.

Sec. 15. Section 15-943, Arizona Revised Statutes, is amended to read:

START_STATUTE15-943. Base support level

The base support level for each school district shall be computed as follows:

1. The following support level weights shall be used in paragraph 2, subdivision (a) of this section for the following school districts:

(a) For school districts whose student count in kindergarten programs and grades one through eight is classified in column 1 of this subdivision, the support level weight for kindergarten programs and grades one through eight is the corresponding support level weight prescribed in column 2 or 3 of this subdivision, whichever is appropriate:

Column 1 Column 2 Column 3

Support Level Weight Support Level Weight

For Small Isolated For Small

Student Count School Districts School Districts

1-99 1.559 1.399

100-499 1.358 + [0.0005 x (500 1.278 + [0.0003 x (500

- student count)] - student count)]

500-599 1.158 + [0.002 x (600 1.158 + [0.0012 x (600

- student count)] - student count)]

(b) For school districts whose student count in grades nine through twelve is classified in column 1 of this subdivision, the support level weight for grades nine through twelve is the corresponding support level weight prescribed in column 2 or 3 of this subdivision, whichever is appropriate:

Column 1 Column 2 Column 3

Support Level Weight Support Level Weight

For Small Isolated For Small

Student Count School Districts School Districts

1-99 1.669 1.559

100-499 1.468 + [0.0005 x (500 1.398 + [0.0004 x (500

- student count)] – student count)]

500-599 1.268 + [0.002 x (600 1.268 + [0.0013 x (600

- student count)] – student count)]

2. Subject to paragraph 1 of this section, determine the weighted student count as follows:

(a)

Support Weighted

Level Student Student

Grade Base Group A Weight Count Count

PSD 1.000 + 0.450 = 1.450 x =

K-8 1.000 + 0.158 = 1.158 x =

9-12 1.163 + 0.105 = 1.268 x =

Subtotal A

(b)

Support Weighted

Funding Level Student Student

Category Weight Count Count

HI 4.771 x =

K-3 0.060 x =

ELL 0.115 x _______ = ____________

MD-R, A-R and

SMR-R 6.024 x =

MD-SC, A-SC and

SMR-SC 5.833 x =

MD-SSI 7.947 x =

OI-R 3.158 x =

OI-SC 6.773 x =

P-SD 3.595 x _______ = ____________

DD, ED, MIMR, SLD,

SLI and OHI 0.003 x ________ = ____________

ED-P 4.822 x =

MOMR 4.421 x =

VI 4.806 x =

Subtotal B

3. Multiply the total determined in paragraph 2 of this section by the base level.

4. Multiply the teacher experience index of the district or 1.00, whichever is greater, by the product obtained in paragraph 3 of this section.

5. Add the amount determined in section 15‑910.04. END_STATUTE

Sec. 16. Section 15-944, Arizona Revised Statutes, is amended to read:

START_STATUTE15-944. Base revenue control limit

A. The base revenue control limit for each school district for fiscal year 1980‑1981 is computed as follows:

1. Add the amounts in the fiscal year 1979‑1980 budget effective May 15, 1980 for general operating and special education.

2. Subtract the following budgeted revenues from the sum obtained in paragraph 1 of this subsection:

(a) Tuition paid for attendance of nonresident pupils.

(b) State assistance as provided in section 15‑976.

(d) Proceeds from the sale or lease of school property as provided in section 15‑1102.

3. Add the increase in the base support level from fiscal year 1979‑1980 to fiscal year 1980‑1981 to the difference obtained in paragraph 2 of this subsection.

B. The equalization factor for each school district is computed as follows:

1. Divide the sum obtained in subsection A, paragraph 3 of this section by the base support level for fiscal year 1980‑1981.

2. Subtract 1.0 from the quotient obtained in paragraph 1 of this subsection to obtain the equalization factor.

C. The revenue variation factor for each fiscal year is as follows:

1. For fiscal year 1981‑1982, 0.80.

2. For fiscal year 1982‑1983, 0.60.

3. For fiscal year 1983‑1984, 0.40.

4. For fiscal year 1984‑1985, 0.20.

D. The base revenue control limit for each school district during the five years in which the equalization plan is in operation is computed as follows:

1. Multiply the equalization factor by the revenue variation factor for the applicable year. Beginning with fiscal year 1983‑1984 if the resulting product is less than negative 0.08, use negative 0.08 for computation purposes as provided in paragraph 2 of this subsection.

2. Multiply the product obtained in paragraph 1 of this subsection by the base support level for the applicable year.

3. Add the base support level for the applicable year to the product obtained in paragraph 2 of this subsection.

E. For fiscal year 1985‑1986 and each fiscal year thereafter, the base revenue control limit equals the base support level for the same fiscal year and the amount determined in section 15‑910.04. END_STATUTE

Sec. 17. Section 15-945, Arizona Revised Statutes, is amended to read:

START_STATUTE15-945. Transportation support level

A. The support level for to and from school for each school district for the current year shall be computed as follows:

1. Determine the approved daily route mileage of the school district for the fiscal year prior to the current year.

2. Multiply the figure obtained in paragraph 1 of this subsection by one hundred eighty.

3. Determine the number of eligible students transported in the fiscal year prior to the current year.

4. Divide the amount determined in paragraph 1 of this subsection by the amount determined in paragraph 3 of this subsection to determine the approved daily route mileage per eligible student transported.

5. Determine the classification in column 1 of this paragraph for the quotient determined in paragraph 4 of this subsection. Multiply the product obtained in paragraph 2 of this subsection by the corresponding state support level for each route mile as provided in column 2 of this paragraph.

Column 1 Column 2

Approved Daily Route State Support Level per

Mileage per Eligible Route Mile for

Student Transported Fiscal Year 2010‑2011 2011‑2012

0.5 or less $2.35 2.37

More than 0.5 through 1.0 $1.91 1.93

More than 1.0 $2.35 2.37

6. Add the amount spent during the prior fiscal year for bus tokens and bus passes for students who qualify as eligible students as defined in section 15‑901.

B. The support level for academic education, career and technical education, vocational education and athletic trips for each school district for the current year is computed as follows:

1. Determine the classification in column 1 of paragraph 2 of this subsection for the quotient determined in subsection A, paragraph 4 of this section.

2. Multiply the product obtained in subsection A, paragraph 5 of this section by the corresponding state support level for academic education, career and technical education, vocational education and athletic trips as provided in column 2, 3 or 4 of this paragraph, whichever is appropriate for the type of district.

Column 1 Column 2 Column 3 Column 4

Approved Daily Route

Mileage per Eligible District Type District Type District Type

Student Transported 02 or 03 04 05

0.5 or less 0.15 0.10 0.25

More than 0.5 through 1.0 0.15 0.10 0.25

More than 1.0 0.18 0.12 0.30

For the purposes of this paragraph, "district type 02" means a unified school district or an accommodation school that offers instruction in grades nine through twelve, "district type 03" means a common school district not within a high school district, "district type 04" means a common school district within a high school district or an accommodation school that does not offer instruction in grades nine through twelve and "district type 05" means a high school district.

C. The support level for extended school year services for pupils with disabilities is computed as follows:

1. Determine the sum of the following:

(a) The total number of miles driven by all buses of a school district while transporting eligible pupils with disabilities on scheduled routes from their residence to the school of attendance and from the school of attendance to their residence on routes for extended school year services in accordance with section 15‑881.

(b) The total number of miles driven 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 pupil with a disability from the place of the pupil's residence to a school transportation pickup point or to the school facility of attendance and from the school transportation scheduled return point or from the school facility to the pupil's residence for extended school year services in accordance with section 15‑881.

2. Multiply the sum determined in paragraph 1 of this subsection by the state support level for the district determined as provided in subsection A, paragraph 5 of this section.

D. The transportation support level for each school district for the current year is the sum of the support level for to and from school as determined in subsection A of this section, the support level for academic education, career and technical education, vocational education and athletic trips as determined in subsection B of this section and the support level for extended school year services for pupils with disabilities as determined in subsection C of this section.

E. The state support level for each approved route mile, as provided in subsection A, paragraph 5 of this section, shall be adjusted by the growth rate prescribed by law, subject to appropriation. END_STATUTE

Sec. 18. Section 15-947, Arizona Revised Statutes, is amended to read:

START_STATUTE15-947. Revenue control limit; district support level; general budget limit; unrestricted total capital budget limit; soft capital allocation limit

A. The revenue control limit for a school district is equal to the sum of the base revenue control limit determined in section 15‑944, the amount determined in section 15‑910.04 and the transportation revenue control limit determined in section 15‑946.

B. The district support level for a school district is equal to the sum of the base support level determined in section 15‑943 and the transportation support level determined in section 15‑945.

C. The general budget limit for each school district, for each fiscal year, is the sum of the following:

1. The maintenance and operations portion of the revenue control limit for the budget year.

2. The maintenance and operation portion of the following amounts:

(a) Amounts that are fully funded by revenues other than a levy of taxes upon the taxable property within the school district, as listed below:

(i) Amounts budgeted as the budget balance carryforward as provided in section 15‑943.01.

(ii) Tuition revenues for attendance of nonresident pupils.

(iii) State assistance as provided in section 15‑976.

(iv) Special education revenues as provided in section 15‑825, subsection D and section 15‑1204.

(v) Title VIII of the elementary and secondary education act of 1965 assistance determined for children with disabilities, children with specific learning disabilities, children residing on Indian lands and children residing within the boundaries of an accommodation school that is located on a military reservation and that is classified as a heavily impacted local educational agency pursuant to 20 United States Code section 7703 as provided in section 15‑905, subsections K and O.

(vi) Title VIII of the elementary and secondary education act of 1965 administrative costs as provided in section 15‑905, subsection P.

(vii) State assistance for excess tuition as provided in section 15‑825.01.

(viii) Amounts received from the state board of education pursuant to section 15‑973.01.

(ix) Transportation revenues for attendance of nonresident pupils.

(b) Amounts approved pursuant to an override election as provided in section 15‑481 for the applicable fiscal year.

(d) Amounts authorized by the county school superintendent pursuant to section 15‑974, subsection B.

(e) Expenditures for complying with a court order of desegregation as provided in section 15‑910.

(f) Expenditures for the bond issues portion of the cost of tuition as provided in section 15‑910.

(g) Interest on registered warrants or tax anticipation notes as provided in section 15‑910.

(h) Amounts budgeted for a jointly owned and operated career and technical education and vocational education center as provided in section 15‑910.01.

3. The maintenance and operations portion of the capital outlay revenue limit for the budget year.

4. Any other budget item that is budgeted in the maintenance and operation section of the budget and that is specifically exempt from the revenue control limit or the capital outlay revenue limit.

D. The unrestricted capital budget limit, for each school district for each fiscal year, is the sum of the following:

1. The federal impact adjustment as determined in section 15‑964 for the budget year.

2. Any other budget item that is budgeted in the capital outlay section of the budget and that is specifically exempt from the capital outlay revenue limit.

3. The unrestricted capital portion of the amounts contained in subsection C of this section.

4. The unexpended budget balance in the unrestricted capital outlay fund from the previous fiscal year.

5. The net interest earned in the unrestricted capital outlay fund the previous fiscal year.

6. The budgeted amount as approved and determined pursuant to section 15‑962, subsection F.

E. The soft capital allocation limit for each school district for each fiscal year is the sum of the following:

1. The soft capital allocation for the budget year.

2. The unexpended budget balance in the soft capital allocation fund from the previous fiscal year.

3. The net interest earned in the soft capital allocation fund the previous fiscal year. END_STATUTE

Sec. 19. Section 15-947.01, Arizona Revised Statutes, is amended to read:

START_STATUTE15-947.01. Revenue control limit; general budget limit; total capital budget limit for joint technical education districts

A. The revenue control limit for a joint technical education district is equal to the base support level determined in section 15‑943.02 and the amount determined in section 15‑910.04.

B. The general budget limit for each joint technical education district, for each fiscal year, is the sum of the following:

1. The revenue control limit for the budget year.

2. The capital outlay revenue limit for the budget year.

3. Tuition revenues for attendance of nonresident pupils.

4. Title VIII of the elementary and secondary education act of 1965 assistance determined for children with disabilities, children with specific learning disabilities and children residing on Indian lands as provided in section 15‑905, subsections K and O.

5. Expenditures for excess utility costs as provided in section 15‑910.

C. The unrestricted capital budget limit for each joint technical education district for the budget year is as provided in section 15‑947, subsection D.

D. The soft capital allocation limit for each joint technical education district for the budget year is as provided in section 15‑947, subsection E. END_STATUTE

Sec. 20. Section 15-977, Arizona Revised Statutes, is amended to read:

START_STATUTE15-977. Classroom site fund; definitions

A. The classroom site fund is established consisting of monies transferred to the fund pursuant to section 37‑521, subsection B and section 42‑5029, subsection E, paragraph 10. The department of education shall administer the fund. School districts and charter schools may not supplant existing school site funding with revenues from the fund. All monies distributed from the fund are intended for use at the school site. Each school district or charter school shall allocate forty per cent of the monies for teacher compensation increases based on performance and employment related expenses, twenty per cent of the monies for teacher base salary increases and employment related expenses and forty per cent of the monies for maintenance and operation purposes as prescribed in subsection H of this section. Teacher compensation increases based on performance or teacher base salary increases distributed pursuant to this subsection shall supplement, and not supplant, teacher compensation monies from any other sources. The school district or charter school shall notify each school principal of the amount available to the school by April 15 of each year. The district or charter school shall request from the school's principal each school's priority for the allocation of the funds available to the school for each program listed under subsection H of this section. The amount budgeted by the school district or charter school pursuant to this section shall not be included in the allowable budget balance carryforward calculated pursuant to section 15‑943.01.

B. A school district governing board must adopt a performance based compensation system at a public hearing to allocate funding from the classroom site fund pursuant to subsection A of this section.

C. A school district governing board shall vote on a performance based compensation system that includes the following elements:

1. School district performance and school performance.

2. Measures of academic progress toward the academic standards adopted by the state board of education.

3. Other measures of academic progress.

4. Dropout or graduation rates.

5. Attendance rates.

6. Ratings of school quality by parents.

7. Ratings of school quality by students.

8. The input of teachers and administrators.

9. Approval of the performance based compensation system based on an affirmative vote of at least seventy per cent of the teachers eligible to participate in the performance based compensation system.

10. An appeals process for teachers who have been denied performance based compensation.

11. Regular evaluation for effectiveness.

D. A performance based compensation system shall include teacher professional development programs that are aligned with the elements of the performance based compensation system.

E. A school district governing board may modify the elements contained in subsection C of this section and consider additional elements when adopting a performance based compensation system. A school district governing board shall adopt any modifications or additional elements and specify the criteria used at a public hearing.

F. Until December 31, 2009, each school district shall develop an assessment plan for its performance based compensation system and submit the plan to the department of education by December 31 of each year. A copy of the performance based compensation system and assessment plan adopted by the school district governing board shall be included in the report submitted to the department of education.

G. Monies in the fund are continuously appropriated, are exempt from the provisions of section 35‑190 relating to lapsing of appropriations and shall be distributed as follows:

1. By March 30 of each year the staff of the joint legislative budget committee shall determine a per pupil amount from the fund for the budget year using the estimated statewide weighted count for the current year pursuant to section 15‑943, paragraph 2, subdivision (a) and based on estimated available resources in the classroom site fund for the budget year adjusted for any prior year carryforward or shortfall.

2. The allocation to each charter school and school district for a fiscal year shall equal the per pupil amount established in paragraph 1 of this subsection for the fiscal year multiplied by the weighted student count for the school district or charter school for the fiscal year pursuant to section 15‑943, paragraph 2, subdivision (a). For the purposes of this paragraph, the weighted student count for a school district that serves as the district of attendance for nonresident pupils shall be increased to include nonresident pupils who attend school in the school district.

3. For each fiscal year in which the legislature appropriates sufficient monies for teacher performance pay pursuant to this section, the amount appropriated shall equal the product of the base level prescribed in section 15‑901 multiplied by the prior year statewide weighted student count multiplied by the following percentages:

(a) For stage one, one per cent.

(b) For stage two, two per cent.

(d) For stage four, four per cent.

(e) For stage five, five per cent.

(f) For stage six, five and one‑half per cent by June 30, 2018.

H. Monies distributed from the classroom site fund shall be spent for the following maintenance and operation purposes:

1. Class size reduction.

2. Teacher compensation increases.

3. AIMS intervention programs.

4. Teacher development.

5. Dropout prevention programs.

6. Teacher liability insurance premiums.

I. The district governing board or charter school shall allocate the classroom site fund monies to include, wherever possible, the priorities identified by the principals of the schools while assuring that the funds maximize classroom opportunities and conform to the authorized expenditures identified in subsection A of this section.

J. School districts and charter schools that receive monies from the classroom site fund shall submit a report by November 15 of each year to the superintendent of public instruction on a per school basis that provides an accounting of the expenditures of monies distributed from the fund during the previous fiscal year and a summary of the results of district and school programs funded with monies distributed from the fund. The department of education in conjunction with the auditor general shall prescribe the format of the report under this subsection.

K. School districts and charter schools that receive monies from the classroom site fund shall receive these monies monthly in an amount not to exceed one‑twelfth of the monies estimated pursuant to subsection G of this section, except that if there are insufficient monies in the fund that month to make payments, the distribution for that month shall be prorated for each school district or charter school. The department of education may make an additional payment in the current month for any prior month or months in which school districts or charter schools received a prorated payment if there are sufficient monies in the fund that month for the additional payments. The state is not required to make payments to a school district or charter school classroom site fund if the state classroom site fund revenue collections are insufficient to meet the estimated allocations to school districts and charter schools pursuant to subsection G of this section.

L. The state education system for committed youth shall receive monies from the classroom site fund in the same manner as school districts and charter schools. The Arizona state schools for the deaf and the blind shall receive monies from the classroom site fund in an amount that corresponds to the weighted student count for the current year pursuant to section 15‑943, paragraph 2, subdivision (b) for each pupil enrolled in the Arizona state schools for the deaf and the blind. Except as otherwise provided in this subsection, the Arizona state schools for the deaf and the blind and the state education system for committed youth are subject to this section in the same manner as school districts and charter schools.

M. Each school district and charter school, including school districts that unify pursuant to section 15‑448 or consolidate pursuant to section 15‑459, shall establish a local level classroom site fund to receive allocations from the state level classroom site fund. The local level classroom site fund shall be a budgetary controlled account. Interest charges for any registered warrants for the local level classroom site fund shall be a charge against the local level classroom site fund. Interest earned on monies in the local level classroom site fund shall be added to the local level classroom site fund as provided in section 15‑978. In no event shall This state shall not be required to make payments to a school district or charter school local level classroom site fund that are in addition to monies transferred to the state level classroom site fund pursuant to section 37‑521, subsection B and section 42‑5029, subsection E, paragraph 10.

N. Monies distributed from the classroom site fund for class size reduction, AIMS intervention and dropout prevention programs shall only be used for instructional purposes in the instruction function as defined in the uniform system of financial records, except that monies shall not be used for school sponsored athletics.

O. If a school district is approved for a career ladder program pursuant to section 15‑918.04 or an optional performance incentive program pursuant to section 15‑919, the school district may continue to participate in those programs or may choose to receive additional teacher performance pay monies pursuant to subsection G, paragraph 3 of this section. If a school district chooses to receive monies pursuant to subsection G, paragraph 3 of this section, the school district shall reduce the amount of funding for its career ladder program or optional performance incentive program, as applicable, in an amount that is equal to the amount appropriated by the legislature for the applicable stage specified in subsection G, paragraph 3 of this section. If a school district is approved for a career ladder program pursuant to section 15‑918.04 or an optional performance incentive program pursuant to section 15‑919 and that school district chooses to receive monies for stage one pursuant to subsection G, paragraph 3 of this section, the school district shall continue to receive funding through the remaining stages specified in subsection G, paragraph 3 of this section, subject to legislative appropriation. A school district that is subject to this subsection shall notify the department of education of the school district's intention to receive monies pursuant to subsection G, paragraph 3 of this section no later than July 1 of the fiscal year that stage one monies are appropriated.

P. O. For the purposes of this section:

1. "AIMS intervention" means summer programs, after school programs, before school programs or tutoring programs that are specifically designed to ensure that pupils meet the Arizona academic standards as measured by the Arizona instrument to measure standards test prescribed by section 15‑741.

2. "Class size reduction" means any maintenance and operations expenditure that is designed to reduce the ratio of pupils to classroom teachers, including the use of persons who serve as aides to classroom teachers. END_STATUTE

Sec. 21. Additional assistance funding for charter schools; reduction for fiscal year 2011-2012

In addition to any other reductions made in fiscal year 2011‑2012, for fiscal year 2011-2012, the department of education shall reduce by the amount identified in the general appropriations act the amount of additional assistance funding that otherwise would be apportioned to charter schools statewide for fiscal year 2011-2012 pursuant to section 15-185, subsection B, paragraph 4, Arizona Revised Statutes, as amended by this act. The funding reduction required under this section shall be made on a proportional basis based on the additional assistance funding that each charter school in the state would have received for fiscal year 2011-2012 without the prescribed reduction.

Sec. 22. Joint technical education district equalization funding

Notwithstanding section 15-393, Arizona Revised Statutes, or any other law, the department of education shall fund state aid for joint technical education districts for fiscal year 2011‑2012 at ninety‑one per cent of the amount that otherwise would be provided by law.

Sec. 23. Soft capital allocation reduction for school districts for fiscal year 2011‑2012

A. For fiscal year 2011‑2012, the department of education shall reduce by $188,120,700 the amount of basic state aid that otherwise would be apportioned to school districts statewide for fiscal year 2011‑2012 for the soft capital allocation prescribed in section 15‑962, Arizona Revised Statutes, and shall reduce school district budget limits accordingly.

B. For fiscal year 2011‑2012, the department of education shall reduce the soft capital allocation for a school district that is not eligible to receive basic state aid funding for fiscal year 2011‑2012 by the amount that its soft capital allocation would be reduced pursuant to subsection A of this section if the district was eligible to receive basic state aid funding for fiscal year 2011‑2012 and shall reduce the school district's budget limits accordingly.

Sec. 24. Early graduation scholarship program; funding suspension; temporary moratorium on new program participants

A. Notwithstanding section 15‑105, subsection E, Arizona Revised Statutes, the student count and per pupil funding of a school district or charter school for fiscal year 2011‑2012 shall not be adjusted to reflect requirements under that subsection.

B. Notwithstanding section 15‑105, subsection F, Arizona Revised Statutes, for fiscal year 2011‑2012 the department of education shall not transmit any monies to the commission for postsecondary education for the early graduation scholarship program.

C. Notwithstanding section 15‑105, Arizona Revised Statutes, students who were not admitted before July 1, 2009 to participate in the early graduation scholarship program shall not be admitted to participate in the early graduation scholarship program during fiscal year 2011‑2012.

D. If sufficient monies are available in the early graduation scholarship fund established by section 15‑105, Arizona Revised Statutes, students who were admitted before July 1, 2009 to participate in the early graduation scholarship program shall continue to receive funding to participate in the program in fiscal year 2011‑2012.

Sec. 25. Annual performance audit; AIMS intervention and dropout prevention program; suspension in fiscal year 2011‑2012

Notwithstanding section 15-809, subsection C, Arizona Revised Statutes, the department of education is not required to contract with a private entity to conduct an annual performance audit of the AIMS intervention and dropout prevention program for fiscal year 2011-2012.

Sec. 26. School facilities board; new construction moratorium

A. Notwithstanding sections 15-2011 and 15-2041, Arizona Revised Statutes, for fiscal year 2011-2012, the school facilities board shall not authorize or award funding for the design or construction of any new school facility and shall not authorize or award funding for school site acquisitions.

B. During fiscal year 2011-2012, school districts shall submit capital plans according to section 15-2041, subsection C, Arizona Revised Statutes. The school facilities board may review and award new school facilities as outlined in section 15-2041, Arizona Revised Statutes, subject to future appropriations.

C. This section does not apply to lease-to-own transactions entered into by the school facilities board pursuant to Laws 2009, third special session, chapter 12, section 75, as amended by Laws 2010, seventh special session, chapter 8, section 6.

D. This section does not prevent the school facilities board from distributing monies for construction projects that began construction before fiscal year 2008-2009.

Sec. 27. Building renewal fund; suspension in fiscal year 2011‑2012

Notwithstanding section 15‑2031, Arizona Revised Statutes, the school facilities board shall not distribute monies from the building renewal fund in fiscal year 2011‑2012.

Sec. 28. Capital outlay revenue limit reduction for school districts for fiscal year 2011-2012

A. For fiscal year 2011‑2012, the department of education shall reduce by $63,864,800 the amount of basic state aid that otherwise would be apportioned to school districts statewide for fiscal year 2011‑2012 for the capital outlay revenue control limit prescribed in section 15‑961, Arizona Revised Statutes, and shall reduce school district budget limits accordingly.

B. For fiscal year 2011‑2012, the department of education shall reduce the capital outlay revenue limit for a school district that is not eligible to receive basic state aid funding for fiscal year 2011‑2012 by the amount that its capital outlay revenue limit would be reduced pursuant to subsection A of this section if the district was eligible to receive basic state aid funding for fiscal year 2011‑2012 and shall reduce the school district's budget limits accordingly.

Sec. 29. K-12 formula reductions; small districts; maximum

Notwithstanding any other law, the sum of soft capital and capital outlay revenue limit reductions in fiscal year 2011-2012 for school districts with a student count of fewer than 1,100 pupils shall not exceed $5,000,000.

Sec. 30. Initial deposits in the education learning and accountability fund

On or before December 1, 2011, each community college district shall transmit on a one‑time basis six dollars per full-time student equivalent according to the most recent audit and each university under the jurisdiction of the Arizona board of regents shall transmit on a one‑time basis six dollars per actual university full-time equivalent student to the department of education for deposit in the education learning and accountability fund established by section 15-249.02, Arizona Revised Statutes, as added by this act.

Sec. 31. Conforming legislation

The legislative council staff shall prepare proposed legislation conforming the Arizona Revised Statutes to the delayed repeal of sections 15‑918, 15-918.01, 15-918.02, 15-918.03, 15-918.04, 15-918.05, 15-919, 15‑919.02, 15-919.03, 15-919.04, 15-919.05 and 15-919.06, Arizona Revised Statutes, by this act, for consideration in the fifty-second legislature, first regular session.

Sec. 32. Career ladder and optional performance incentive programs; maximum base level increase and qualifying tax rate increases for fiscal years 2011‑2012 through 2014‑2015

A. Notwithstanding sections 15‑918.04 and 15‑919.04, Arizona Revised Statutes, the maximum base level increase that is permitted for a school district that participates in the career ladder program or the optional performance incentive program shall be as follows:

1. For fiscal year 2011‑2012, four per cent.

2. For fiscal year 2012‑2013, three per cent.

3. For fiscal year 2013‑2014, two per cent.

4. For fiscal year 2014‑2015, one per cent.

B. Notwithstanding sections 15-918.05 and 15-919.05, Arizona Revised Statutes, for fiscal years 2011-2012 through 2014-2015 a school district that is authorized to calculate its budget using an increase in the base level, as prescribed in sections 15‑918.04 and 15-919.04, Arizona Revised Statutes, shall have its equalization assistance for education as computed in section 15‑971, Arizona Revised Statutes, computed as follows:

1. For a high school district or a common school district within a high school district that does not offer instruction in high school subjects as provided in section 15‑447, Arizona Revised Statutes, the qualifying tax rate as provided in section 15‑971, subsection B, paragraph 1, Arizona Revised Statutes, shall be increased ten cents or the amount required in order to fund authorized budget capacity for the program for the fiscal year, whichever is less.

2. For a unified school district, a common school district not within a high school district or a common school district within a high school district that offers instruction in high school subjects as provided in section 15‑447, Arizona Revised Statutes, the qualifying tax rate as provided in section 15‑971, subsection B, paragraph 2, Arizona Revised Statutes, shall be increased twenty cents or the amount required in order to fund authorized budget capacity for the program for the fiscal year, whichever is less.

C. For fiscal years 2011‑2012 through 2014‑2015, career ladder programs and optional performance incentive programs are limited to teachers who participated in those respective programs in the prior fiscal year.