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ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
AMENDED
technical correction; payment method
(NOW: school facilities; revisions)
Purpose
Requires the School Facilities Board (SFB) to list vacant buildings or partially used buildings that are suitable for school operations and establishes guidelines for the sale or lease of those buildings.
Background
The SFB annually publishes a list of vacant and unused buildings and portions of buildings owned by the state or by a school district that may be suitable for the operation of a charter school. The list must be made available to applicants for charter schools and to existing charter schools. A school district that is selling or leasing a vacant or unused building or portion of a building may not prohibit a charter school from negotiating to buy or lease the building. School districts are required to attempt to obtain the highest possible value under current market conditions for the sale or lease of the vacant or unused building. Additionally, statute currently allows school districts to sell used equipment to charter schools before the school district attempts to sell or dispose of the equipment by other means (A.R.S. § 15-189).
The SFB provides services and funding for school district facilities through administration of Building Renewal Grants, New School Facilities (NSF) funding and the Emergency Deficiencies Correction funding. The Governor appoints an Executive Director for the SFB who must have demonstrated competency in school finance, facilities design or facilities management. The Executive Director is responsible for analyzing applications for SFB monies and reviewing or auditing the expenditure of monies by a school district for deficiencies corrections and NSF (A.R.S. § 15‑2002).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
The SFB
1. Requires the SFB and the Arizona Department of Administration to annually publish a list of vacant buildings and partially used buildings, owned by the state or by school districts, that may be suitable for school operations.
2. Requires the SFB to make the list publicly available on its website, and upon request, to:
a) charter school applicants;
b) SFB applicants who are applying for additional space; and
c) existing school districts and charter schools.
3. Requires the list to include:
a) the address of each building;
b) a short description of each building;
c) the building owner's name; and
d) any other pertinent information related to the vacancy and capacity of each building.
4. Requires the SFB to annually submit the list to the Governor, the President of the Senate and the Speaker of the House of Representatives and provide a copy to the Secretary of State and the State Board for Charter Schools.
5. Prohibits a school district from restricting a charter school or private school from negotiating to buy or lease a property, for sale or lease by a school district, in the same manner as other potential buyers or lessees.
6. Requires school districts to report any school or school buildings that are vacant or partially used and requires the SFB to establish reporting guidelines.
7. Requires the SFB to inspect school buildings to ensure the accuracy of the vacant and partially used buildings as reported by the school districts.
Sale or Lease of Buildings
8. Prohibits a school district from accepting an offer for the sale or lease of a vacant building or partially used building that is less than an offer from a charter or private school.
9. Specifies an owner of a building on the list is not required to sell or lease the building, or a portion of the building, to a charter school, any other school or to any prospective buyer or tenant.
10. Prohibits an owner of a building on the list from withdrawing the property from sale or lease solely because a charter or private school is the highest bidder.
11. Allows a lease to be terminated, renewed according to an existing agreement or renewed with a negotiated increase at the conclusion of a lease for an existing tenant that is a public school or that provides services to public school students.
12. Requires a building owner to justify a proposed increase to the lessee, which can include considerations for the percentage of revenue dedicated to:
a) educational facilities;
b) inflators related to student enrollment increases;
c) the annual gross domestic product price deflator; or
d) expenses for building and parking lot maintenance and upgrades.
13. Allows a school district to sell used equipment to a charter or private school, prior to selling or disposing of the equipment by other means.
14. Exempts, from being considered as partially used buildings, buildings used for career and technical education, special education services, preschool programs, schools open for less than five years or magnet schools.
15. Limits these exemptions from being applied to more than 25 percent of a district's school buildings.
16. Allows a school district to form a partnership, according to a written agreement, with a charter school, another school district or a military base to:
a) operate a school;
b) offer educational services in a district building, including a vacant or partially used building; or
c) offer educational services in any building on the entity's property.
17. Allows a school district governing board (governing board) to:
a) enter into leases or lease-purchase agreements for school buildings or grounds for periods of less than 20 years, rather than 15 years, that are subject to voter approval for school building construction as prescribed; or
b) sell school sites or enter into leases or lease-purchase agreements for school buildings and grounds for a period of 20 years or more, rather than 15 years or more, if authorized by a vote of the school district electors.
Elections Pertaining to School Property
18. Requires a special election to:
a) authorize the governing board to negotiate and enter a lease for 20 or more years, rather than 10 or more years; and
b) reauthorize the governing board to negotiate a lease, if the lease is not entered into within 20 years, rather than 10 years, of the election date.
19. Exempts, from being subject to approval at an election, the sale or lease of a school building or a partially used building if the building is vacant or partially used for at least three years.
Miscellaneous
20. Repeals statute relating to a listing of vacant buildings suitable for charter or private school operations.
21. Defines a partially used building as a building with at least 4,500 square feet of contiguous, unused space.
22. Defines a vacant building as a building that has been vacant and unused for at least two years.
23. Makes technical and confirming changes.
24. Becomes effective on the general effective date.
Amendments Adopted by Committee
· Adopted the strike-everything amendment.
Amendments Adopted by Committee of the Whole
1. Removes the requirement that a school district attempt to obtain the highest possible value for the sale or lease of a vacant or partially used building.
2. Removes the restriction on increasing lease payments above the lease renewal terms for a tenant that is a public school or provides services to public school students and removes guidelines for a negotiated lease increase.
3. Allows a lease to be terminated or renewed and requires a building owner to justify a proposed lease increase as outlined.
4. Exempts buildings used for career and technical education from the definition of a partially used building.
5. Removes a school district’s ability to end the lease for a leased school that receives a letter grade of D or F.
6. Removes the required statement on the number of vacant buildings from being published in an informational election pamphlet.
Amendments Adopted by the House of Representatives
1. Removes allowances for revenues, derived from the sale or lease of any building owned by the school district, from being used for other capital and academic needs and prioritized for schools with at least 60 percent of students enrolled in the National Free and Reduced-Price School Lunch Program.
2. Requires a special election to authorize a governing board to enter a lease for 20 or more years, rather than 10 or more years.
3. Makes technical and conforming changes.
Senate Action House Action
APPROP 2/26/19 DPA/SE 6-3-0 ED 3/25/19 DPA 10-3-0-0
3rd Read 3/6/19 19-11-0 APPROP 3/26/19 W/D
3rd Read 5/14/19 46-14-0
Prepared by Senate Research
May 14, 2019
JO/gs