Assigned to RULES FOR
COMMITTEE
ARIZONA STATE SENATE
Forty-seventh Legislature, First Regular Session
FACT SHEET FOR H.B. 2782
full-day kindergarten; expansion
Purpose
Appropriates $38 million to expand full-day kindergarten to schools where at least 80 percent of pupils meet free or reduced lunch program criteria. Appropriates $5.5 million for a limited grant program for 1500 kindergarten students who qualify for a free or reduced lunch program. Phases in a corporate tuition tax credit for contributions to school tuition organizations (STOs).
Background
In 2004, the Legislature appropriated $21 million to begin a statewide phase-in of full-day kindergarten instruction, beginning with school districts and charter schools that enroll a high ratio of economically disadvantaged students. The Legislature also appropriated $4 million to the School Facilities Board for distribution as capital grants to school districts that required immediate additional space to offer full-day kindergarten programs (Laws 2004, Chapter 278).
The legislation also established the nine-member Joint Legislative Study Committee on Full-day Kindergarten (Committee), which was required to submit preliminary recommendations by December 1, 2004, to the Legislature and the Governor regarding full-day kindergarten implementation. The Committee met on three occasions and considered funding for each year of implementation, capital accommodations and program implementation issues.
There is a $38 million appropriation from the state General Fund in FY 2005-2006 to the Arizona Department of Education (ADE) for expanded funding of full-day kindergarten and a $5.5 million appropriation for the parental educational choice grants.
Provisions
1. Clarifies that monies generated by K-3 overrides can only be used for pupils in kindergarten programs and grades one through three.
2. Requires each school that offers full-day kindergarten to also offer half-day kindergarten instruction with academically meaningful instruction in each of the academic standards adopted by the State Board of Education.
3. Removes the requirement that full-day kindergarten funding shall be continuously provided once a school qualifies for state funding under economic eligibility requirements.
4. Subjects funding for full-day kindergarten to annual appropriation. Each annual appropriation shall specify eligibility requirements based on percentages of pupils who meet requirements for eligibility for National School Lunch and Child Nutrition Acts.
5. Requires schools and charter schools that receive full-day kindergarten monies to collect and document eligibility for National School Lunch and Child Nutrition Acts. This documentation shall include proof of household income.
6. Requires the Auditor General’s school-wide audit team to include a school’s proof of compliance in its audit. If the Auditor General determines a school or charter school is not in compliance, that school is no longer eligible to receive state funding for full-day kindergarten.
7. Repeals the Joint Legislative Study Committee on Full-Day Kindergarten.
8. Requires ADE to conduct a review of existing research on full-day kindergarten instruction. Specifies requirements for review. Requires ADE to submit the review to the Governor and the Legislature on or before December 1, 2005.
9. Prohibits the Legislature from considering further appropriation for full-day kindergarten until after the Joint Legislative Budget Committee (JLBC) has reviewed the study.
10. Prohibits state monies from being used for full-day kindergarten instruction for any pupil who is not at least five years old before September 1 of the school year in which the pupil is enrolled.
11. Appropriates $38 million from the state General Fund in FY 2005-2006 to ADE for full-day kindergarten. Exempts the appropriation from lapsing. Monies shall be distributed to schools or charter schools in which at least 80 percent of the pupils meet economic eligibility requirements of the National School Lunch and Child Nutrition Acts.
12. Directs ADE to use up to $150,000 of the appropriation for two additional FTEs for the purposes of this act.
Parental Educational Choice Grant Program
13. Establishes the Parental Educational Choice Grant Program in which each pupil who applies shall receive a grant for payment of tuition and fees at a grant school. Limits the grant to $3500 or the total amount of tuition and fees charged by the school, whichever is less.
14. Stipulates that monies provided are to the qualifying pupil and not to the grant school, and cannot be considered taxable income to the custodian or the qualifying pupil.
15. Stipulates requirements for a pupil’s grant eligibility, including the pupil’s family must be at or below 185 percent of the federal poverty level and a child must be at least five years of age before September 1 of the school year that the pupil is enrolled.
16. Allows a child to continue to receive the grant each year if that pupil completes all necessary coursework, is in good academic standing, and the custodian completes all applications within required timelines.
17. Requires ADE to provide a grant program for kindergarten programs for the 2006-2007 school year. Requires ADE to add one grade level each school year until in the 2018-2019 school year and each year thereafter, the grant program is provided for kindergarten and grades one through twelve.
18. Limits participation in the grant program to private schools, either secular or sectarian.
19. Stipulates that the participating school may charge an additional amount representing any balance of tuition or fees not covered by the grant.
20. States requirements for schools to continue to participate in the grant program, including standards that qualifying students must meet.
21. Requires ADE to annually issue a press release and publish on its web site a list of all grant schools that will redeem grants.
22. Describes the application process for the grant program. Requires ADE to ensure the eligibility of the pupil for the grant and issue grants on a first-come, first-served basis. Requires ADE to establish a waiting list of qualifying pupils if more than 1500 students apply.
23. Requires ADE to reduce the average daily membership of a public school for each qualifying pupil who receives a grant if the pupil was counted by the school district for funding purposes.
24. Stipulates requirements for distribution of grant monies.
25. Appropriations $5.5 million from the state General Fund in fiscal year 2005-2006. Establishes the Parental Educational Choice Grant Fund (Fund) consisting of legislative appropriations and transfers. Exempts the Fund from lapsing.
26. Allows ADE to use up to one percent of the annual appropriation for payment of costs and expenses incurred in performing the duties imposed under this article.
27. States that any person who uses or attempts to use grant monies for purposes other than those permitted is guilty of a class 6 felony.
Corporate Tuition Tax Credit
28. Allows a taxpayer to claim a credit for a voluntary cash contribution to an STO. Limits the amount of the taxpayer’s credit to the actual amount or ten thousand dollars, whichever is less.
29. Limits the total amount of tax credits allowed for these contributions to $10 million in calendar year 2006. Increases that amount by $5 million each year until in tax year 2015 that amount cannot exceed $55 million.
30. Requires the Department of Revenue (DOR) to preapprove each tax credit and allow the credits on a first come, first served basis.
31. Stipulates requirements of a STO for accepting contributions.
32. Prohibits a taxpayer from designating that the contribution be awarded to a specific student.
33. Requires a STO to use at least 70 percent of contributions to provide educational scholarships for children who qualify for free or reduced price lunches. A child is still eligible to receive that benefit if the child meets the criteria but does not receive the benefit.
34. Limits the amount of the grant that an STO shall issue in 2006 to $4200 for grades K-8 and $5500 for grades 9-12. Each year thereafter, the limitation amount increases by $100.
35. Requires a school to refund a prorated amount of the scholarship to the STO if the child leaves the school.
36. Requires an STO to transfer 20 percent of monies collected from the previous tax year to the Fund.
37. Appropriates $5.5 million from the state General Fund in fiscal year 2005-2006 to the Fund for distribution by ADE to custodians of qualifying children to attend grant schools. Exempts this appropriation from lapsing.
38. Requires the Joint Legislative Income Tax Credit Review Committee to review the corporate tuition tax credit in 2010.
Miscellaneous
39. Requires review by JLBC of any transfer to or from basic state aid, additional state aid, certificates of educational convenience or the special education fund line items.
40. Requires Legislative Council staff to prepare proposed legislation for the next legislative session to conform Arizona Revised Statutes to these provisions.
41. Contains a severability clause.
42. Defines terms.
43. Becomes effective on the general effective date.
House Action
APPROP (B) 4/26/05 DPA 8-5-0-2
APPROP (P) 4/26/05 DP 9-5-0-1
3rd Read 5/2/05 31-27-2
Prepared by Senate Research
May 4, 2005
CMH/jas