SB1293 - 511R

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

Section 1. School accountability; simulated pilot program for outcome‑based funding of schools; reports

A. The state board of education, in consultation with the department of education and the state board for charter schools, shall establish a competitive application process for a four‑year simulated pilot program for outcome‑based funding of schools.

B. Pursuant to title 41, chapter 23, article 13, Arizona Revised Statutes, the state board of education shall solicit a request for information on or before October 31, 2013 regarding the appropriate assessment instruments that may be used to implement the simulated pilot program, which shall include cost estimates and proposed timetables for implementation. The state board of education shall provide the results of the request for information to the president of the senate and the speaker of the house of representatives on or before January 1, 2014.

C. School districts and charter schools shall submit applications to participate in the simulated pilot program to the state board of education on or before January 1 of each year of the simulated pilot program. Applicants shall indicate which schools and grade levels will participate in the simulated pilot program. The state board of education shall give selection preference to school districts and charter schools that participated in the simulated pilot program during the previous school year.

D. On or before March 1 of each year of the simulated pilot program, the state board of education shall select the school districts and charter schools that will participate in the simulated pilot program during that school year. Simulated pilot program participants shall consist of up to:

1. Five school districts each year, at least one of which provides online instruction.

2. Five charter schools each year, at least one of which offers full‑time Arizona online instruction.

E. The department of education shall conduct an estimated analysis of the simulated funding that school districts and charter schools that are selected to participate in the simulated pilot program would have received if the school funding formula were to be modified in the following manner:

1. Each participating school district and charter school would receive up to six thousand five hundred simulated dollars for each participating pupil in kindergarten programs and grades one through eight and up to seven thousand five hundred simulated dollars for each participating pupil in grades nine through twelve. The school districts and charter schools would receive fifty per cent of the per pupil simulated funding according to monthly apportionment schedules prescribed by the state board of education and would receive the remaining fifty per cent on the successful demonstration of outcomes.

2. The state board of education would distribute an additional two hundred fifty simulated dollars to school districts and charter schools that participate in the simulated pilot program for each participating pupil who obtains a grade of 3.0 on a four‑point grading scale in a dual enrollment or concurrent enrollment mathematics or science course.

3. Enrollment for simulated pilot program participants would be based on actual attendance of pupils for the current month.

4. Simulated funding would be apportioned to simulated pilot program participants no later than one month after attendance figures for the previous month were reported to the department of education.

5. The initial month of simulated funding for simulated pilot program participants would be based on the school's prior year average daily membership.

6. The simulated source of simulated funding for school districts that participate in the simulated pilot program would be state monies appropriated for this purpose after subtracting monies available to the school district through the application of the qualifying tax rate pursuant to section 41‑1276, Arizona Revised Statutes. The simulated source of funding for charter schools that participate in the simulated pilot program would be state monies appropriated for this purpose.

F. The department of education shall conduct an estimated analysis of the following simulated requirements for the school districts and charter schools that participate in the simulated pilot program:

1. Compliance with state laws relating to the health and safety of pupils, teachers and other school district personnel and all state laws that are aligned to federal requirements.

2. Adherence to academic and twenty‑first century skills and workplace performance outcomes established by the joint legislative committee on outcome‑based funding. Academic outcomes determined by the joint legislative committee would be used for participating pupils in kindergarten programs and grades one through twelve. College and career readiness outcomes would also be used for participating pupils in grades seven through twelve.

3. Agreement to exclude the student count of a school that is participating in the simulated pilot program from all calculations relating to school district bond elections and school district override elections. This paragraph would not prohibit a participating school or school district from applying for federal monies that would be otherwise allowed by law.

G. Each pupil in the simulated pilot program would be administered an examination to determine the pupil's baseline academic level that would be used for outcome‑based funding.

H. If a pupil who was participating in the simulated pilot program withdraws from a participating school before a formal assessment is administered to that pupil to determine whether the pupil has met a targeted outcome, the pupil would be administered an assessment after withdrawal to ensure that the appropriate level of outcome‑based funding would be provided to that school.

I. The universities under the jurisdiction of the Arizona board of regents shall:

1. Provide to the school districts and charter schools that participate in the simulated pilot program a list of the courses at each university that meet the requirements for a degree in science, technology, engineering or mathematics.

2. Assign at least one but no more than three employees of each university to review the request for information received by the state board of education pursuant to subsection B of this section. These persons shall recommend to the state board of education a ranking of the available assessments to be used by participating school districts and charter schools to measure academic outcomes that are aligned to placement tests. To the extent possible, the assessments approved for high school English and mathematics shall be used for each content area by those universities.

3. Assist the school districts and charter schools that participate in the simulated pilot program to review the results from the performance outcome assessments used by school districts and charter schools that participate in the simulated pilot program.

4. Provide instruction on outcome‑based instructional strategies and competency‑based instructional strategies for prospective teachers enrolled in colleges of education.

J. The career and technical education division within the department of education, in collaboration with businesses in this state, shall develop methods to evaluate workplace skills, including portfolios, checklists and internships.

K. Notwithstanding subsection E of this section, school districts and charter schools that are selected to participate in the simulated pilot program shall continue to receive funding as prescribed in title 15, Arizona Revised Statutes.

L. Beginning November 15, 2015, the state board of education shall submit to the governor, the president of the senate and the speaker of the house of representatives an annual report that summarizes the results of the simulated pilot program. The state board of education shall provide a copy of the annual report to the secretary of state.

M. The state board of education and the state board for charter schools may adopt rules to carry out the purposes of this section.

N. The four‑year simulated pilot program is intended to begin in school year 2014‑2015, but the state board of education may delay the implementation of the simulated pilot program until required assessments are developed to sufficiently measure outcomes.

Sec. 2. Delayed repeal

Section 1 of this act, relating to the simulated pilot program for outcome-based funding of schools, is repealed from and after September 15, 2020.