HB2823 - 502R

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

Section 1. Section 15-203, Arizona Revised Statutes, is amended to read:

START_STATUTE15-203. Powers and duties

A. The state board of education shall:

1. Exercise general supervision over and regulate the conduct of the public school system and adopt any rules and policies it deems necessary to accomplish this purpose.

2. Keep a record of its proceedings.

3. Make rules for its own government.

4. Determine the policy and work undertaken by it.

5. Appoint its employees, on the recommendation of the superintendent of public instruction.

6. Prescribe the duties of its employees if not prescribed by statute.

7. Delegate to the superintendent of public instruction the execution of board policies and rules.

8. Recommend to the legislature changes or additions to the statutes pertaining to schools.

9. Prepare, publish and distribute reports concerning the educational welfare of this state.

10. Prepare a budget for expenditures necessary for proper maintenance of the board and accomplishment of its purposes and present the budget to the legislature.

11. Aid in the enforcement of laws relating to schools.

12. Prescribe a minimum course of study in the common schools, minimum competency requirements for the promotion of pupils from the third grade and minimum course of study and competency requirements for the promotion of pupils from the eighth grade. The state board of education shall prepare a fiscal impact statement of any proposed changes to the minimum course of study or competency requirements and, on completion, shall send a copy to the director of the joint legislative budget committee and the executive director of the school facilities board. The state board of education shall not adopt any changes in the minimum course of study or competency requirements in effect on July 1, 1998 that will have a fiscal impact on school capital costs.

13. Prescribe minimum course of study and competency requirements for the graduation of pupils from high school. The state board of education shall prepare a fiscal impact statement of any proposed changes to the minimum course of study or competency requirements and, on completion, shall send a copy to the director of the joint legislative budget committee and the executive director of the school facilities board. The state board of education shall not adopt any changes in the minimum course of study or competency requirements in effect on July 1, 1998 that will have a fiscal impact on school capital costs.

14. Supervise and control the certification of persons engaged in instructional work directly as any classroom, laboratory or other teacher or indirectly as a supervisory teacher, speech therapist, principal or superintendent in a school district, including school district preschool programs, or any other educational institution below the community college, college or university level, and prescribe rules for certification, including rules for certification of teachers who have teaching experience and who are trained in other states, which that are not unnecessarily restrictive and are substantially similar to the rules prescribed for the certification of teachers trained in this state. The rules shall:

(a) Allow a variety of alternative teacher and administrator preparation programs, with variations in program sequence and design, to apply for program approval. The state board shall adopt rules pursuant to this subdivision designed to allow for a variety of formats and shall not require a prescribed answer or design from the program provider in order to obtain approval from the state board. The state board shall evaluate each program provider based on the program's ability to prepare teachers and administrators and to recruit teachers and administrators with a variety of experiences and talents. The state board shall permit universities under the jurisdiction of the Arizona board of regents, community colleges in this state, private postsecondary institutions licensed by this state, school districts, charter schools and professional organizations to apply for program approval and shall create application procedures and certification criteria that are less restrictive than those for traditional preparation programs. Alternative preparation program graduates shall:

(i) Hold a bachelor's degree from an accredited postsecondary education institution.

(ii) Demonstrate professional knowledge and subject knowledge proficiency pursuant to section 15‑533.

(iii) Obtain a fingerprint clearance card pursuant to section 15-534.

(iv) Complete training in structured English immersion as prescribed by the state board.

(v) Complete training in research based systematic phonics instruction as prescribed in subdivision (b) of this paragraph.

(vi) Demonstrate the required proficiency in the constitutions of the United States and Arizona as prescribed in section 15‑532.

(b) Require applicants for all certificates for common school instruction to complete a minimum of forty‑five classroom hours or three college level credit hours, or the equivalent, of training in research based systematic phonics instruction from a public or private provider.

(c) Not require a teacher to obtain a master's degree or to take any additional graduate courses as a condition of certification or recertification.

(d) Allow a general equivalency diploma to be substituted for a high school diploma in the certification of emergency substitute teachers.

(e) Allow but shall not require the superintendent of a school district to obtain certification from the state board of education.

15. Adopt a list of approved tests for determining special education assistance to gifted pupils as defined in and as provided in chapter 7, article 4.1 of this title. The adopted tests shall provide separate scores for quantitative reasoning, verbal reasoning and nonverbal reasoning and shall be capable of providing reliable and valid scores at the highest ranges of the score distribution.

16. Adopt rules governing the methods for the administration of all proficiency examinations.

17. Adopt proficiency examinations for its use. The state board of education shall determine the passing score for the proficiency examination.

18. Include within its budget the cost of contracting for the purchase, distribution and scoring of the examinations as provided in paragraphs 16 and 17 of this subsection.

19. Supervise and control the qualifications of professional nonteaching school personnel and prescribe standards relating to qualifications. The standards shall not require the business manager of a school district to obtain certification from the state board of education.

20. Impose such disciplinary action, including the issuance of a letter of censure, suspension, suspension with conditions or revocation of a certificate, upon a finding of immoral or unprofessional conduct.

21. Establish an assessment, data gathering and reporting system for pupil performance as prescribed in chapter 7, article 3 of this title.

22. Adopt a rule to promote braille literacy pursuant to section 15‑214.

23. Adopt rules prescribing procedures for the investigation by the department of education of every written complaint alleging that a certificated person has engaged in immoral conduct.

24. For purposes of federal law, serve as the state board for vocational and technological education and meet at least four times each year solely to execute the powers and duties of the state board for vocational and technological education.

25. Develop and maintain a handbook for use in the schools of this state that provides guidance for the teaching of moral, civic and ethical education. The handbook shall promote existing curriculum frameworks and shall encourage school districts to recognize moral, civic and ethical values within instructional and programmatic educational development programs for the general purpose of instilling character and ethical principles in pupils in kindergarten programs and grades one through twelve.

26. Require pupils to recite the following passage from the declaration of independence for pupils in grades four through six at the commencement of the first class of the day in the schools, except that a pupil shall not be required to participate if the pupil or the pupil's parent or guardian objects:

We hold these truths to be self‑evident, that all men are created equal, that they are endowed by their creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. . . .

27. Adopt rules that provide for teacher certification reciprocity. The rules shall provide for a one year reciprocal teaching certificate with minimum requirements, including valid teacher certification from a state with substantially similar criminal history or teacher fingerprinting requirements and proof of the submission of an application for a fingerprint clearance card pursuant to title 41, chapter 12, article 3.1. For teachers who provide Arizona online instruction pursuant to section 15‑808, the rules shall allow automatic certification reciprocity with other states that have similar programs.

28. Adopt rules that provide for the presentation of an honorary high school diploma to a person who has never obtained a high school diploma and who meets both of the following requirements:

(a) Currently resides in this state.

(b) Provides documented evidence from the Arizona department of veterans' services that the person enlisted in the armed forces of the United States and served in World War I, World War II, the Korean conflict or the Vietnam conflict.

29. Cooperate with the Arizona‑Mexico commission in the governor's office and with researchers at universities in this state to collect data and conduct projects in the United States and Mexico on issues that are within the scope of the duties of the department of education and that relate to quality of life, trade and economic development in this state in a manner that will help the Arizona‑Mexico commission to assess and enhance the economic competitiveness of this state and of the Arizona‑Mexico region.

30. Adopt rules to define and provide guidance to schools as to the activities that would constitute immoral or unprofessional conduct of certificated persons.

31. Adopt guidelines to encourage pupils in grades nine, ten, eleven and twelve to volunteer for twenty hours of community service before graduation from high school. A school district that complies with the guidelines adopted pursuant to this paragraph is not liable for damages resulting from a pupil's participation in community service unless the school district is found to have demonstrated wanton or reckless disregard for the safety of the pupil and other participants in community service. For the purposes of this paragraph, "community service" may include service learning. The guidelines shall include the following:

(a) A list of the general categories in which community service may be performed.

(b) A description of the methods by which community service will be monitored.

(d) Orientation and notification procedures of community service opportunities for pupils entering grade nine, including the development of a notification form. The notification form shall be signed by the pupil and the pupil's parent or guardian, except that a pupil shall not be required to participate in community service if the parent or guardian notifies the principal of the pupil's school in writing that the parent or guardian does not wish the pupil to participate in community service.

(e) Procedures for a pupil in grade nine to prepare a written proposal that outlines the type of community service that the pupil would like to perform and the goals that the pupil hopes to achieve as a result of community service. The pupil's written proposal shall be reviewed by a faculty advisor, a guidance counselor or any other school employee who is designated as the community service program coordinator for that school. The pupil may alter the written proposal at any time before performing community service.

(f) Procedures for a faculty advisor, a guidance counselor or any other school employee who is designated as the community service program coordinator to evaluate and certify the completion of community service performed by pupils.

32. To facilitate the transfer of military personnel and their dependents to and from the public schools of this state, pursue, in cooperation with the Arizona board of regents, reciprocity agreements with other states concerning the transfer credits for military personnel and their dependents. A reciprocity agreement entered into pursuant to this paragraph shall:

(a) Address procedures for each of the following:

(i) The transfer of student records.

(ii) Awarding credit for completed course work.

(iii) Permitting a student to satisfy the graduation requirements prescribed in section 15‑701.01 through the successful performance on comparable exit-level assessment instruments administered in another state.

(b) Include appropriate criteria developed by the state board of education and the Arizona board of regents.

33. Adopt guidelines that school district governing boards shall use in identifying pupils who are eligible for gifted programs and in providing gifted education programs and services. The state board of education shall adopt any other guidelines and rules that it deems necessary in order to carry out the purposes of chapter 7, article 4.1 of this title.

34. For each of the alternative textbook formats of human-voiced audio, large-print and braille, designate alternative media producers to adapt existing standard print textbooks or to provide specialized textbooks, or both, for pupils with disabilities in this state. Each alternative media producer shall be capable of producing alternative textbooks in all relevant subjects in at least one of the alternative textbook formats. The board shall post the designated list of alternative media producers on its website.

35. Adopt a list of approved professional development training providers for use by school districts as provided in section 15-107, subsection J. The professional development training providers shall meet the training curriculum requirements determined by the state board of education in at least the areas of school finance, governance, employment, staffing, inventory and human resources, internal controls and procurement.

36. Adopt rules to prohibit a person who violates the notification requirements prescribed in section 15-183, subsection C, paragraph 8 or section 15‑550, subsection C from certification pursuant to this title until the person is no longer charged or is acquitted of any offenses listed in section 41‑1758.03, subsection B. The board shall also adopt rules to prohibit a person who violates the notification requirements, certification surrender requirements or fingerprint clearance card surrender requirements prescribed in section 15-183, subsection C, paragraph 9 or section 15‑550, subsection D from certification pursuant to this title for at least ten years after the date of the violation.

37. Adopt rules for the alternative certification of teachers of nontraditional foreign languages that allow for the passing of a nationally accredited test to substitute for the education coursework required for certification.

38. On or before December 15, 2011, Adopt and maintain a model framework for a teacher and principal evaluation instrument that includes quantitative data on student academic progress that accounts for between thirty‑three per cent and fifty per cent of the evaluation outcomes. and on or before December 1, 2012, the framework shall include definitions for the four performance classifications to be used in the evaluation instrument. The state board of education shall adopt best practices for professional development and evaluator training. The state board of education may periodically make adjustments to align the evaluation instrument with assessment or data changes at the state level. School districts and charter schools shall use an instrument that meets the data requirements established by the state board of education to annually evaluate individual teachers and principals beginning in school year 2012‑2013. By school year 2013‑2014, school districts and charter schools shall apply the performance classifications adopted by the state board of education in their evaluation instruments.

B. The state board of education may:

1. Contract.

2. Sue and be sued.

3. Distribute and score the tests prescribed in chapter 7, article 3 of this title.

4. Provide for an advisory committee to conduct hearings and screenings to determine whether grounds exist to impose disciplinary action against a certificated person, whether grounds exist to reinstate a revoked or surrendered certificate and whether grounds exist to approve or deny an initial application for certification or a request for renewal of a certificate. The board may delegate its responsibility to conduct hearings and screenings to its advisory committee. Hearings shall be conducted pursuant to title 41, chapter 6, article 6.

5. Proceed with the disposal of any complaint requesting disciplinary action or with any disciplinary action against a person holding a certificate as prescribed in subsection A, paragraph 14 of this section after the suspension or expiration of the certificate or surrender of the certificate by the holder.

6. Assess costs and reasonable attorney fees against a person who files a frivolous complaint or who files a complaint in bad faith. Costs assessed pursuant to this paragraph shall not exceed the expenses incurred by the state board in the investigation of the complaint. END_STATUTE

Sec. 2. Section 15-503, Arizona Revised Statutes, is amended to read:

START_STATUTE15-503. Superintendents, principals, head teachers and school psychologists; term of employment; evaluation; contract delivery; nonretention notice

A. The governing board may:

1. Employ a superintendent or principal, or both. If the governing board employs a superintendent, the governing board shall determine the qualifications for the superintendent by action taken at a public meeting. The governing board shall require a superintendent to have a valid fingerprint clearance card that is issued pursuant to title 41, chapter 12, article 3.1.

2. Appoint a head teacher.

3. Jointly with another governing board employ a superintendent or a principal, or both. If the governing board jointly employs a superintendent, the governing boards shall jointly determine the qualifications for the superintendent by action taken at a public meeting. The governing boards shall require a superintendent to have a valid fingerprint clearance card that is issued pursuant to title 41, chapter 12, article 3.1.

B. The term of employment of superintendents or principals may be for any period not exceeding three years, except that if the superintendent's or principal's contract with the school district is for multiple years pursuant to this subsection the school district shall not offer to extend or renegotiate the contract until May of the year preceding the final year of the contract. The school district governing board or the governing body of the charter school shall communicate the superintendent's or principal's duties with respect to the classroom site fund established by section 15‑977.

C. The governing board shall establish systems for the evaluation of the performance of principals that meet the requirements prescribed in section 15‑203, subsection A, paragraph 38 and other school administrators and certificated school psychologists in the school district. In the development and adoption of these performance evaluation systems, the governing board shall avail itself of the advice of its administrators and certificated school psychologists. Each evaluation shall include recommendations as to areas of improvement in the performance of the certificated school psychologist if the performance of the certificated school psychologist warrants improvement. After transmittal of an assessment, a board designee shall confer with the certificated school psychologist to make specific recommendations as to areas of improvement in the certificated school psychologist's performance. The board designee shall provide assistance and opportunities for the certificated school psychologist to improve his performance and shall follow up with the certificated school psychologist after a reasonable period of time for the purpose of ascertaining that the certificated school psychologist is demonstrating adequate performance. The evaluation process for certificated school psychologists shall include appeal procedures for certificated school psychologists who disagree with the evaluation of their performance, if the evaluation is for use as criteria for establishing compensation or dismissal.

D. On or before May 15 each year, the governing board shall offer a contract for the next school year to each certified administrator and certificated school psychologist who is in the last year of his contract unless, on or before April 15, the governing board, a member of the board acting on behalf of the board or the superintendent of the school district gives notice to the administrator or certificated school psychologist of the board's intention not to offer a new contract. If the governing board has called for an override election for the third Tuesday in May as provided in section 15‑481, the governing board shall offer a contract for the next school year to each certified administrator or certificated school psychologist who is in the last year of his contract on or before June 15 unless, no later than five days after the override election excluding Saturday, Sunday and legal holidays, the governing board, a member of the board acting on behalf of the board or the superintendent of the school district gives notice to the administrator or the certificated school psychologist of the board's intention not to offer a new contract. The administrator's or the certificated school psychologist's acceptance of the contract shall be indicated within thirty days from the date of the written contract or the offer is revoked. The administrator or certificated school psychologist accepts the contract by signing the contract and returning it to the governing board or by making a written instrument that accepts the terms of the contract and delivering the written instrument to the governing board.

E. Notice of the board's intention not to reemploy the administrator or certificated school psychologist shall be made by delivering the notice personally to the administrator or the certificated school psychologist or by sending the notice by certified mail, postmarked on or before the applicable deadline prescribed in subsection D of this section, and directed to the administrator or the certificated school psychologist at his place of residence as recorded in the school district records.

F. A principal who is designated in the highest performance classification:

1. May be offered a multiyear employment contract not to exceed three years.

2. Is eligible for incentives to work at schools that are assigned a letter grade of D or F pursuant to section 15‑241.

G. Notwithstanding subsection J of this section, a principal who is classified for one year in the lowest performance classification shall not be transferred as a principal to another school within that school district. The principal shall be provided and complete a professional development program focused on the areas in which the principal needs to improve within one year of receiving this classification.

H. A principal who is classified for two consecutive years or three nonconsecutive years in the lowest performance classification shall not be employed as a principal in any other public school in this state for two years and shall complete professional development in instructional leadership.

I. Copies of the evaluation report and performance classification of a principal retained by the governing board are confidential, do not constitute a public record and shall not be released or shown to any person except:

1. To the principal who may make any use of it.

2. To authorized district officers and employees for all personnel matters regarding employment and contracts and for any hearing that relates to personnel matters.

3. For introduction in evidence or discovery in any court action between the governing board and the principal in which either:

(a) The competency of the principal is at issue.

(b) The evaluation and performance classification were an exhibit at a hearing, the result of which is challenged.

J. A principal shall not be transferred to another school within that school district unless the governing board approves the transfer in writing. When considering whether to approve the transfer of a principal to another school within that school district, the governing board shall consider the needs of the pupils at each school. END_STATUTE

Sec. 3. Section 15-521, Arizona Revised Statutes, is amended to read:

START_STATUTE15-521. Duties of teachers

Every teacher shall:

1. Make student learning the primary focus of the teacher's professional time.

1. 2. Hold pupils to strict account for disorderly conduct.

2. 3. Take and maintain daily classroom attendance.

3. 4. Make the decision to promote or retain a pupil in grade in a common school or to pass or fail a pupil in a course in high school. Such decisions may be overturned only as provided in section 15‑342, paragraph 11.

4. 5. Comply with all rules and policies of the governing board that relate to the duties prescribed in this section. END_STATUTE

Sec. 4. Section 15-537, Arizona Revised Statutes, is amended to read:

START_STATUTE15-537. Performance of certificated teachers; evaluation system; definition

A. The governing board of a school district shall establish a system for the evaluation of the performance of certificated teachers in the school district that meets the requirements prescribed in section 15‑203, subsection A, paragraph 38. The objectives of the teacher performance evaluation system are to improve instruction and maintain instructional strengths. The governing board shall involve its certificated teachers in the development and periodic evaluation of the teacher performance evaluation system.

B. A school district shall use the teacher evaluation prescribed by section 15‑203, subsection a, paragraph 38 to place a certificated teacher who has been employed by the school district for the major portion of two consecutive school years in a performance classification adopted by the state board of education. Notwithstanding section 15‑536:

1. A school district may offer a teaching contract to a certificated teacher who has not been employed by the school district for the major portion of three consecutive years and who has been designated in the lowest performance classification.

2. A teaching contract issued pursuant to paragraph 1 of this subsection is not subject to sections 15‑539, 15‑540, 15‑541, 15‑544 and 15‑549 until that teacher has achieved a higher performance classification for two consecutive years.

C. A school district shall use the teacher evaluation prescribed by section 15-203, subsection A, paragraph 38 to place a certificated teacher who has been employed by the school district for the major portion of three or more consecutive school years in a performance classification as adopted by the state board of education. Notwithstanding section 15-538.01, a teacher who has been employed by the school district for the major portion of three or more consecutive school years and who is designated in the highest performance classification may be offered a multiyear employment contract, not to exceed three years, and is eligible for incentives to work at schools that are assigned a letter grade of D or F pursuant to section 15-241. A teacher who has been employed by the school district for the major portion of three or more consecutive school years and who is designated in the lowest performance classification for two consecutive school years shall not be transferred as a teacher to another school in that school district. A teacher who has been employed by the school district for the major portion of three or more consecutive school years and who is designated in the lowest performance classification for two consecutive years or three nonconsecutive years shall not be the teacher of record assigned to a classroom until that teacher completes a professional development program focused on the areas in which the teacher needs to improve. If the school district does not provide professional development, the school district shall use the teacher evaluation to document and notify the teacher of inadequate classroom performance pursuant to sections 15-538, 15-538.01 and 15-539. For the purposes of this paragraph, "teacher of record" means a person, including a person on teams, who is responsible for the planning, assessment and delivery of instruction to pupils in classrooms.

B. D. The governing board shall prescribe specific procedures for the teacher performance evaluation system, which shall include at least the following elements:

1. A reliable evaluation instrument including specific criteria for measuring effective teaching performance in each area of the teacher's classroom responsibility.

2. An assessment of the competencies of teachers as they relate to the specific criteria for measuring teacher performance prescribed in paragraph 1 of this subsection.

3. 1. A specified minimum number and minimum duration of At least one actual classroom observations observation of the certificated teacher demonstrating teaching skills by the persons evaluating the teacher. Within thirty days after the observation, the persons evaluating the teacher shall provide written results to the certificated teacher. The teacher may request an additional observation within thirty days of receiving the results. The second observation shall be completed in time to be reflected in that school year's evaluation outcomes.

4. 2. Specific and reasonable plans for the improvement of teacher performance as provided in subsection F G of this section.

5. 3. Appeal procedures for teachers who disagree with the evaluation of their performance, if the evaluation is for use as criteria for establishing compensation.

C. A regular evaluation of the performance of each certificated teacher as provided in this section shall be performed at least twice each year for a teacher who has not been employed by the school district for more than the major portion of three consecutive school years and at least once each year for a teacher who has been employed by the school district for more than the major portion of three consecutive school years. The governing board may provide for additional teacher performance evaluations as it deems necessary.

D. E. The governing board shall designate persons who are qualified to evaluate teachers to serve as evaluators for the district's teacher performance evaluation system. The governing board shall ensure that persons evaluating teachers are qualified to evaluate teachers.

E. F. An evaluation made as provided in this section shall be in writing, and a copy shall be transmitted to the certificated teacher within five days after completion of the evaluation. The certificated teacher may initiate a written reaction or response to the evaluation.

F. G. Each evaluation shall include recommendations as to areas of improvement in the performance of the certificated teacher if the performance of the teacher warrants improvement. After transmittal of an assessment evaluation a board designee shall confer with the teacher to make specific recommendations as to areas of improvement in the teacher's performance. The board designee shall provide assistance and opportunities for the certificated teacher to improve his performance and follow up with the teacher after a reasonable period of time for the purpose of ascertaining that the teacher is demonstrating adequate classroom performance.

G. H. Copies of the assessment and evaluation report and performance classification of a certificated teacher retained by the governing board are confidential, do not constitute a public record and shall not be released or shown to any person except:

1. To the certificated teacher who may make any use of it.

2. To authorized district officers and employees for all personnel matters regarding employment and contracts and for any hearing which that relates to personnel matters.

3. For introduction in evidence or discovery in any court action between the governing board and the certificated teacher in which either:

(a) The competency of the teacher is at issue.

(b) The assessment and evaluation and performance classification were an exhibit at a hearing, the result of which is challenged.

I. A teacher shall not be transferred to another school within that school district unless the principal of the transferring school, the principal of the receiving school and the human resources department at the school district approve the transfer in writing. The decision shall take into consideration the current distribution of educators across all the performance classifications and the needs of the pupils in the school before deciding the transfer is in the best interests of the pupils and the school.

J. Notwithstanding any other provision of this section, a school district may use one year of student data for a teacher evaluation if the data and other portions of the evaluation suggest an inability to meet the standards of the school district for student achievement. END_STATUTE

Sec. 5. Title 15, chapter 5, article 3, Arizona Revised Statutes, is amended by adding section 15-537.01, to read:

START_STATUTE15-537.01. Posting of best practices for teacher and principal evaluation systems

A. On or before September 15, 2012, the department of education shall identify and prominently post on the website maintained by the department the best practices for the implementation and assessment of principal and teacher evaluation systems.

B. The best practices posted by the department of education pursuant to subsection A of this section shall be from at least the following public schools in this state:

1. One large school district located in a county with a population of at least eight hundred thousand persons.

2. One small school district located in a county with a population of at least eight hundred thousand persons.

3. One school district located in a county with a population of fewer than eight hundred thousand persons.

4. One charter school.

C. The best practices posted by the department of education pursuant to subsection A of this section shall include detailed information on the following:

1. The implementation process for teacher and principal evaluation systems.

2. The evaluation weightings.

3. The types of qualitative and quantitative elements used.

4. The methods in which the evaluations guide professional development.

5. The types of decisions for which the evaluations are used. END_STATUTE

Sec. 6. 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. The forty per cent allocated by school districts for teacher compensation increases based on performance and employment related expenses shall be in accordance with section 15-203, subsection A, paragraph 38. 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. Until the end of the 2014-2015 school year, 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. 9. An appeals process for teachers who have been denied performance based compensation.

11. 10. Regular evaluation for effectiveness, which shall comply by fiscal year 2014‑2015 with section 15‑203, subsection A, paragraph 38.

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.

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 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. 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. 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