HB2229 - 521R

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

Section 1. Section 15-808, Arizona Revised Statutes, is amended to read:

START_STATUTE15-808. Arizona online instruction; reports; definitions

A. Arizona online instruction shall be instituted to meet the needs of pupils in the information age. The state board of education shall select traditional public schools and the state board for charter schools shall sponsor charter schools to be online course providers or online schools. The state board of education and the state board for charter schools shall jointly develop standards for the approval of online course providers and online schools based on the following criteria:

1. The depth and breadth of curriculum choices.

2. The variety of educational methodologies employed by the school and the means of addressing the unique needs and learning styles of targeted pupil populations, including computer-assisted learning systems, virtual classrooms, virtual laboratories, electronic field trips, electronic mail, virtual tutoring, online help desk, group chat sessions and noncomputer-based activities performed under the direction of a certificated teacher.

3. The availability of an intranet or private network to safeguard pupils against predatory and pornographic elements of the internet.

4. The availability of filtered research access to the internet.

5. The availability of private individual electronic mail between pupils, teachers, administrators and parents in order to protect the confidentiality of pupil records and information.

6. The availability of faculty members who are experienced with computer networks, the internet and computer animation.

7. The extent to which the school intends to develop partnerships with universities, community colleges and private businesses.

8. The services offered to populations with developmental disabilities.

9. The grade levels that will be served.

B. Each new school that provides online instruction shall provide online instruction on a probationary status. After a new school that provides online instruction has clearly demonstrated the academic integrity of its instruction through the actual improvement of the academic performance of its students, the school may apply to be removed from probationary status. The state board of education or the state board for charter schools shall remove from Arizona online instruction any probationary school that fails to clearly demonstrate improvement in academic performance within three years measured against goals in the approved application and the state's accountability system. The state board of education and the state board for charter schools shall review the effectiveness of each participating school and other information that is contained in the annual report prescribed in subsection D of this section. All pupils who participate in Arizona online instruction shall reside in this state. Pupils who participate in Arizona online instruction are subject to the testing requirements prescribed in chapter 7, article 3 of this title. On enrollment, the school shall notify the parents or guardians of the pupil of the state testing requirements. If a pupil fails to comply with the testing requirements and the school administers the tests pursuant to this subsection to less than ninety‑five per cent percent of the pupils in Arizona online instruction, the pupil shall not be allowed to participate in Arizona online instruction.

C. The state board of education and the state board for charter schools shall develop annual reporting mechanisms for schools that participate in Arizona online instruction. The annual reporting mechanisms shall require each provider of Arizona online instruction to submit to the superintendent of public instruction on or before September 30 an annual student accountability report that includes a list of the number of pupils who registered during the previous fiscal year for online courses by course title, the number of pupils who completed each course and the grades those pupils received.

D. The department of education shall compile the information submitted in the annual reports by schools participating in Arizona online instruction. The department of education shall submit the compiled report to the governor, the speaker of the house of representatives and the president of the senate by November 15 of each year.

E. Each school selected for Arizona online instruction shall ensure that a daily log is maintained for each pupil who participates in Arizona online instruction. The daily log shall describe the amount of time spent by each pupil participating in Arizona online instruction pursuant to this section on academic tasks. The daily log shall be used by the school district or charter school to qualify the pupils who participate in Arizona online instruction in the school's average daily attendance calculations pursuant to subsection F of this section.

F. If a pupil is enrolled in a school district or charter school and also participates in Arizona online instruction, the sum of the average daily membership, which includes enrollment as prescribed in section 15‑901, subsection A, paragraph 1, subdivisions (a) and (b) and daily attendance as prescribed in section 15‑901, subsection A, paragraph 5, for that pupil in the school district or charter school and in Arizona online instruction shall not exceed 1.0. If the pupil is enrolled in a school district or a charter school and also participates in Arizona online instruction and 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 school district, unless the school district is a joint technical education district subject to the apportionment requirements of section 15‑393, or charter school and Arizona online instruction based on the percentage of total time that the pupil is enrolled or in attendance in the school district or charter school and Arizona online instruction. The uniform system of financial records shall include guidelines for the apportionment of the pupil enrollment and attendance as provided in this subsection. Pupils in Arizona online instruction do not incur absences for purposes of this subsection and 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 kindergarten programs and grades one through eight, average daily membership shall be calculated by dividing the instructional hours as reported in the daily log required in subsection E of this section by the applicable hourly requirements prescribed in section 15‑901. For grades nine through twelve, average daily membership shall be calculated by dividing the instructional hours as reported in the daily log required in subsection E of this section by nine hundred. The average daily membership of a pupil who participates in online instruction shall not exceed 1.0. Average daily membership shall not be calculated on the one hundredth day of instruction for the purposes of this section. Funding shall be determined as follows:

1. A pupil who is enrolled full-time in Arizona online instruction shall be funded for online instruction at ninety‑five per cent percent of the base support level that would be calculated for that pupil if that pupil were enrolled as a full‑time student in a school district or charter school that does not participate in Arizona online instruction. Charter additional assistance and district additional assistance shall be calculated in the same manner they would be calculated if the student were enrolled in a district or charter school that does not participate in Arizona online instruction.

2. A pupil who is enrolled part-time in Arizona online instruction shall be funded for online instruction at eighty‑five per cent percent of the base support level that would be calculated for that pupil if that pupil were enrolled as a part‑time student in a school district or charter school that does not participate in Arizona online instruction. Charter additional assistance and district additional assistance shall be calculated in the same manner they would be calculated if the student were enrolled in a district or charter school that does not participate in Arizona online instruction.

G. If the academic achievement of a pupil declines while the pupil is participating in Arizona online instruction, the pupil's parents, the pupil's teachers and the principal or head teacher of the school shall confer to evaluate whether the pupil should be allowed to continue to participate in Arizona online instruction.

H. The department of education shall review all online course content for adherence to state standards, for courses that have state standards, and issue a recommendation for approval or denial to the state board of education or the state board for charter schools, as appropriate, for action.

H. I. To ensure the academic integrity of pupils who participate in online instruction, Arizona online instruction shall include multiple diverse assessment measures and the proctored administration of required state standardized tests. The final examination for each online course shall be designed to demonstrate competency in that subject and shall be monitored by a representative of the school who is physically in the same room with the pupil during the entire final examination.

I. J. For the purposes of this section:

1. "Full-time student" means:

(a) A student who is at least five years of age before September 1 of a school year and who is enrolled in a school kindergarten program that meets at least three hundred forty‑six hours during the school year.

(b) A student who is at least six years of age before September 1 of a school year, who has not graduated from the highest grade taught in the school and who is regularly enrolled in a course of study required by the state board of education. For first, second and third grade students, the instructional program shall meet at least seven hundred twelve hours. For fourth, fifth and sixth grade students, the instructional program shall meet at least eight hundred ninety hours during the school year.

(c) Seventh and eighth grade students or ungraded students who are at least twelve, but under fourteen, years of age on or before September 1 and who are enrolled in an instructional program of courses that meets at least one thousand sixty‑eight hours during the school year.

(d) For high schools, a student who has not graduated from the highest grade taught in the school district, or an ungraded student who is at least fourteen years of age on or before September 1, and who is enrolled in at least four courses throughout the year that meet at least nine hundred hours during the school year. A full‑time student shall not be counted more than once for computation of average daily membership.

2. "Online course provider" means a school other than an online school that is selected by the state board of education or the state board for charter schools to participate in Arizona online instruction pursuant to this section and that provides at least one online academic course that is approved by the state board of education.

3. "Online school" means a school that provides at least four online academic courses or one or more online courses for the equivalent of at least five hours each day for one hundred eighty school days and that is a charter school that is sponsored by the state board for charter schools or a traditional public school that is selected by the state board of education to participate in Arizona online instruction.

4. "Part‑time student" means:

(a) Any student who is enrolled in a program that does not meet the definition in paragraph 1 of this subsection shall be funded at eighty‑five per cent percent of the base support level that would be calculated for that pupil if that pupil were enrolled as a part-time student in a school district or charter school that does not participate in Arizona online instruction.

(b) A part‑time student of seventy‑five per cent percent average daily membership shall be enrolled in at least three subjects throughout the year that offer for first, second and third grade students at least five hundred thirty‑four instructional hours in a school year and for fourth, fifth and sixth grade students at least six hundred sixty‑eight instructional hours in a school year. A part-time student of fifty per cent percent average daily membership shall be enrolled in at least two subjects throughout the year that offer for first, second and third grade students at least three hundred fifty‑six instructional hours in a school year and for fourth, fifth and sixth grade students at least four hundred forty‑five instructional hours in a school year. A part‑time student of twenty‑five per cent percent average daily membership shall be enrolled in at least one subject throughout the year that offers for first, second and third grade students at least one hundred seventy‑eight instructional hours in a school year and for fourth, fifth and sixth grade students at least two hundred twenty‑three instructional hours in a school year.

(c) For seventh and eighth grade students, a part‑time student of seventy‑five per cent percent average daily membership shall be enrolled in at least three subjects throughout the year that offer at least eight hundred one instructional hours in a school year. A part‑time student of fifty per cent percent average daily membership shall be enrolled in at least two subjects throughout the year that offer at least five hundred thirty‑four instructional hours in a school year. A part‑time student of twenty‑five per cent percent average daily membership shall be enrolled in at least one subject throughout the year that offers at least two hundred sixty-seven instructional hours in a school year.

(d) For high school students, a part-time student of seventy‑five per cent percent average daily membership shall be enrolled in at least three subjects throughout the year that offer at least six hundred seventy‑five instructional hours in a school year. A part‑time student of fifty per cent percent average daily membership shall be enrolled in at least two subjects throughout the year that offer at least four hundred fifty instructional hours in a school year. A part‑time student of twenty‑five per cent percent average daily membership shall be enrolled in at least one subject throughout the year that offers at least two hundred twenty‑five instructional hours in a school year. END_STATUTE

Sec. 2. Title 15, chapter 8, article 1, Arizona Revised Statutes, is amended by adding section 15-808.01, to read:

START_STATUTE15-808.01. Online courses; standards; requirements; funding; exemption

A. On or before December 15, 2015, the state board of education shall adopt and maintain a master rubric that will be used by the department of education for the approval of online courses. The rubric shall provide for alignment with academic standards and include basic criteria designed to ensure quality and effectiveness. The state board of education may periodically update the master rubric. In school years 2016‑2017 and 2017‑2018, the department of education shall limit the approved category of online courses to courses that award potential college credits and core academic courses. Beginning in school year 2017‑2018, the department of education may expand the approved category of online courses to include specified elective courses. Each approved online course shall be a semester course that does not require a specified amount of time for daily instruction or a specified total amount of time for completion of the course.

B. The department of education or an organization selected by the department shall maintain a master list of approved online courses and shall prominently display the master list on its website. The state board of education may charge a fee to online course providers that submit applications for inclusion on the master list of approved online courses. School districts, charter schools, nonprofit organizations, for‑profit organizations and open education resource providers may submit applications for courses to the department of education for inclusion on the master list of approved online courses. The state board of education shall adopt criteria to ensure the quality and effectiveness of the approved online courses. The department of education may enter into reciprocity agreements with other states or with public or private organizations to provide assistance to the department in the review of online courses. For school years 2016‑2017 through 2021‑2022, the department of education shall automatically approve courses offered by online course providers that have previously provided instruction pursuant to section 15‑808 before July 1, 2016. Beginning in school year 2018‑2019, online course providers that have previously provided instruction pursuant to section 15‑808 shall submit an application to the department of education for approval of their courses to remain on the master list.

C. A pupil who wishes to enroll in an online course pursuant to this section shall select an online course from the master list of approved online courses. On or before March 15, the pupil shall notify the school district where the pupil is enrolled of the online courses in which the pupil will enroll during the following school year and shall provide the name of the approved online course provider. A school district may waive the notification requirement prescribed in this subsection if it is in the pupil's best interest. The online course provider shall notify the school district where the pupil is enrolled within thirty days after the enrollment of that pupil in an online course.

D. At the time an online course provider submits an application to the department of education for inclusion on the master list of approved online courses, the online course provider shall also inform the department of education of the price that will be charged to enroll a pupil in the online course in this state. The price of the online course shall be paid by the department of education to the online course provider, be listed on the master list provided to pupils and parents and be available to school districts in this state. The maximum price for an online course that is included on the master list is equivalent to one‑twelfth of the statewide average per pupil funding amount for high school students for all school districts in this state during the prior fiscal year as determined by the department of education based on criteria established by the state board of education.

E. The funding for each online course shall be distributed to the school district where the pupil is enrolled and is equivalent to the total state funding that would otherwise have been allocated to the school district if that pupil had taken a course in the same subject matter at a physical location in the school district. Notwithstanding any other provision of this section, if the credits offered for an online course would cause a pupil to exceed the full‑time credit load as determined by that school district, this state may not provide any funding for that online course and the cost of that online course is the responsibility of the pupil or the pupil's parent or guardian. The school district shall distribute fifty percent of the funding for the online course to the online course provider when the pupil completes the online course with a grade of C minus or better, or the equivalent. The school district shall distribute the remaining fifty percent of the funding for the online course to the online course provider when the pupil has demonstrated mastery of the subject matter of the online course through an assessment approved by the department of education. The department of education or an organization selected by the department shall establish a list of approved end‑of‑course assessments. For the purposes of this subsection, "demonstrated mastery" means that the pupil obtains one of the following:

1. A grade of A or B, or the equivalent, on an end-of-course assessment. The department of education may require that a specific end‑of‑course assessment be used to demonstrate mastery pursuant to this paragraph. For the purposes of this paragraph:

(a) "A" means a score of at least ninety percent on a one hundred‑point scale.

(b) "B" means a score of at least eighty percent on a one hundred‑point scale.

2. If the online course awards potential college credits, a score that grants college credit on the final examination. The final examination must be based on the official final examination for that type of course and not be based on an alternative course assessment.

F. The department of education shall select and enter into an agreement with an independent organization that shall:

1. Collect and analyze feedback from pupils, parents and school districts about the online course. The feedback collected shall be shared with the online course provider, and the aggregated feedback data shall be incorporated into the master list to enable pupils and parents to evaluate the potential effectiveness of specific online courses.

2. Review passing rates, completion rates, state test scores and dropout rates for individual online courses and individual online course providers.

3. Develop a ranking system to identify and award higher rankings to the online courses that are most effective at producing positive academic outcomes. The online courses that meet the requirements of this paragraph shall be awarded the highest rankings.

4. Develop a methodology to allow online course providers to provide feedback to the private organization.

5. Develop a process to allow online course providers to challenge or explain the feedback submitted pursuant to paragraph 1 of this subsection.

G. The department of education shall adopt policies and procedures to ensure that the collection, analysis and sharing of data with the independent organization selected pursuant to subsection F of this section comply with state and federal requirements under the family educational rights and privacy act.

H. In addition to the funding provided pursuant to subsection E of this section, the state board of education may charge the online course provider an administrative fee for each course taken by a pupil. Administrative fees charged by the state board of education to online course providers shall be distributed as follows:

1. To the department of education to approve, maintain and operate the master list of online course providers. The master list of online course providers fund is established consisting of monies deposited pursuant to this paragraph. The department of education shall administer the fund. The department may expend the monies in the fund for the purposes specified in this paragraph. Monies in the fund are continuously appropriated.

2. To the independent organization selected by the department of education pursuant to subsection F of this section for the costs associated with the duties prescribed in subsection F of this section.

3. To the state board of education to approve, maintain and update the master rubric for online course approval. The online course master rubric fund is established consisting of monies deposited pursuant to this paragraph. The state board of education shall administer the fund. The state board of education may expend the monies in the fund for the purposes specified in this paragraph. Monies in the fund are continuously appropriated.

I. The department of education shall establish a process to remove from the master list:

1. Online courses that consistently rank near the bottom of the ranking system prescribed by subsection F, paragraph 3 of this section.

2. All online courses provided by online course providers that consistently rank near the bottom of the ranking system prescribed by subsection F, paragraph 3 of this section.

J. The midterm and final examinations for each online course shall be monitored by a representative of the online course provider who is physically in the same room with the pupil during the entire examination. The online course provider may contract with a certificated teacher or a teacher employed by a charter school to serve as the monitor for the entire examination.

K. Notwithstanding any other law, online course providers that provide instruction to pupils who are enrolled full time in Arizona online instruction pursuant to section 15‑808 are not subject to this section and are exempt from this section. END_STATUTE