HB2180 - 552R

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

Section 1. Section 15-342, Arizona Revised Statutes, is amended to read:

START_STATUTE15-342. Discretionary powers

The governing board may:

1. Expel pupils for misconduct.

2. Exclude from grades one through eight children under six years of age.

3. Make such separation of groups of pupils as it deems advisable.

4. Maintain such special schools during vacation as deemed necessary for the benefit of the pupils of the school district.

5. Allow a superintendent or principal or representatives of the superintendent or principal to travel for a school purpose, as determined by a majority vote of the board. The board may allow members and members-elect of the board to travel within or without the school district for a school purpose and receive reimbursement. Any expenditure for travel and subsistence pursuant to this paragraph shall be as provided in title 38, chapter 4, article 2. The designated post of duty referred to in section 38-621 shall be construed, for school district governing board members, to be the member's actual place of residence, as opposed to the school district office or the school district boundaries. Such expenditures shall be a charge against the budgeted school district funds. The governing board of a school district shall prescribe procedures and amounts for reimbursement of lodging and subsistence expenses. Reimbursement amounts shall not exceed the maximum amounts established pursuant to section 38-624, subsection C.

6. Construct or provide in rural districts housing facilities for teachers and other school employees that the board determines are necessary to operate the school.

7. Sell or lease to the state, a county, a city, another school district or a tribal government agency any school property required for a public purpose if the sale or lease of the property will not affect the normal operations of a school within the school district.

8. Annually budget and spend monies for membership in an association of school districts within this state.

9. Enter into leases or lease-purchase agreements for school buildings or grounds, or both, as lessor or as lessee, for periods of less than twenty years subject to voter approval for construction of school buildings as prescribed in section 15-341, subsection A, paragraph 7.

10. Subject to title 41, chapter 56, sell school sites or enter into leases or lease-purchase agreements for school buildings and grounds, as lessor or as lessee, for a period of twenty years or more, but not to exceed ninety-nine years, if authorized by a vote of the school district electors in an election called by the governing board as provided in section 15-491, except that authorization by the school district electors in an election is not required if one of the following requirements is met:

(a) The market value of the school property is less than $50,000 or the property is procured through a renewable energy development agreement, an energy performance contract, which among other items includes a renewable energy power service agreement, or a simplified energy performance contract pursuant to section 15-213.01.

(b) The buildings and sites are completely funded with monies distributed by the school facilities division of school facilities within the department of administration or at the direction of the school facilities oversight board, or its predecessor.

(c) The transaction involves the sale of improved or unimproved property pursuant to an agreement with the school facilities oversight board in which the school district agrees to sell the improved or unimproved property and transfer the proceeds of the sale to the school facilities oversight board in exchange for monies from the school facilities oversight board for the acquisition of a more suitable school site. For a sale of property acquired by a school district before July 9, 1998, a school district shall transfer to the school facilities oversight board that portion of the proceeds that equals the cost of the acquisition of a more suitable school site. If there are any remaining proceeds after the transfer of monies to the school facilities oversight board, a school district shall only use those remaining proceeds for future land purchases approved by the school facilities oversight board, or for capital improvements not funded by the school facilities oversight board for any existing or future facility.

(d) The transaction involves the sale of improved or unimproved property pursuant to a formally adopted plan and the school district uses the proceeds of this sale to purchase other property that will be used for similar purposes as the property that was originally sold if the sale proceeds of the improved or unimproved property are used within two years after the date of the original sale to purchase the replacement property. If the sale proceeds of the improved or unimproved property are not used within two years after the date of the original sale to purchase replacement property, the sale proceeds shall be used toward paying any outstanding bonded indebtedness. If any sale proceeds remain after paying for outstanding bonded indebtedness, or if the district has no outstanding bonded indebtedness, sale proceeds shall be used to reduce the district's primary tax levy. A school district shall not use this subdivision unless all of the following conditions exist:

(i) The school district is the sole owner of the improved or unimproved property that the school district intends to sell.

(ii) The school district did not purchase the improved or unimproved property that the school district intends to sell with monies that were distributed pursuant to title 41, chapter 56.

(iii) The transaction does not violate section 15-341, subsection G.

11. Review the decision of a teacher to promote a pupil to a grade or retain a pupil in a grade in a common school or to pass or fail a pupil in a course in high school. The pupil has the burden of proof to overturn the decision of a teacher to promote, retain, pass or fail the pupil. In order to sustain the burden of proof, the pupil shall demonstrate to the governing board that the pupil has mastered the academic standards adopted by the state board of education pursuant to sections 15-701 and 15-701.01. If the governing board overturns the decision of a teacher pursuant to this paragraph, the governing board shall adopt a written finding that the pupil has mastered the academic standards. Notwithstanding title 38, chapter 3, article 3.1, the governing board shall review the decision of a teacher to promote a pupil to a grade or retain a pupil in a grade in a common school or to pass or fail a pupil in a course in high school in executive session unless a parent or legal guardian of the pupil or the pupil, if emancipated, disagrees that the review should be conducted in executive session and then the review shall be conducted in an open meeting. If the review is conducted in executive session, the board shall notify the teacher of the date, time and place of the review and shall allow the teacher to be present at the review. If the teacher is not present at the review, the board shall consult with the teacher before making its decision. Any request, including the written request as provided in section 15-341, the written evidence presented at the review and the written record of the review, including the decision of the governing board to accept or reject the teacher's decision, shall be retained by the governing board as part of its permanent records.

12. Provide transportation or site transportation loading and unloading areas for any child or children if deemed for the best interest of the district, whether within or without the district, county or state.

13. Enter into intergovernmental agreements and contracts with school districts or other governing bodies as provided in section 11-952. Intergovernmental agreements and contracts between school districts or between a school district and other governing bodies as provided in section 11-952 are exempt from competitive bidding under the procurement rules adopted by the state board of education pursuant to section 15-213.

14. Include in the curricula it prescribes for high schools in the school district career and technical education, vocational education and technology education programs and career and technical, vocational and technology program improvement services for the high schools, subject to approval by the state board of education. The governing board may contract for the provision of career and technical, vocational and technology education as provided in section 15-789.

15. Suspend a teacher or administrator from the teacher's or administrator's duties without pay for a period of time of not to exceed ten school days, if the board determines that suspension is warranted pursuant to section 15-341, subsection A, paragraph 21 or 22.

16. Dedicate school property within an incorporated city or town to that city or town or within a county to that county for use as a public right-of-way if both of the following apply:

(a) Pursuant to an ordinance adopted by the city, town or county, there will be conferred on the school district privileges and benefits that may include benefits related to zoning.

(b) The dedication will not affect the normal operation of any school within the district.

17. Enter into option agreements for the purchase of school sites.

18. Donate surplus or outdated learning materials, educational equipment and furnishings to nonprofit community organizations if the governing board determines that the anticipated cost of selling the learning materials, educational equipment or furnishings equals or exceeds the estimated market value of the materials.

19. Prescribe policies to assess reasonable fees for students to use district-provided parking facilities. The fees are to be applied by the district solely against costs incurred in operating or securing the parking facilities. Any policy adopted by the governing board pursuant to this paragraph shall include a fee waiver provision in appropriate cases of need or economic hardship.

20. Establish alternative education programs that are consistent with the laws of this state to educate pupils, including pupils who have been reassigned pursuant to section 15-841, subsection E or F.

21. Require a period of silence to be observed at the commencement of the first class of the day in the schools. If a governing board chooses to require a period of silence to be observed, the teacher in charge of the room in which the first class is held shall announce that a period of silence not to exceed one minute in duration will be observed for meditation, and during that time no activities shall take place and silence shall be maintained.

22. Require students to wear uniforms.

23. Exchange unimproved property or improved property, including school sites, if the governing board determines that the improved property is unnecessary for the continued operation of the school district without requesting authorization by a vote of the school district electors and if the governing board determines that the exchange is necessary to protect the health, safety or welfare of pupils or if the governing board determines that the exchange is based on sound business principles for either:

(a) Unimproved or improved property of equal or greater value.

(b) Unimproved property that the owner contracts to improve if the value of the property ultimately received by the school district is of equal or greater value.

24. For common and high school pupils, assess reasonable fees for optional extracurricular activities and programs conducted when the common or high school is not in session, except that fees shall not be charged for pupils' access to or use of computers or related materials. For high school pupils, the governing board may assess reasonable fees for fine arts and vocational education courses and for optional services, equipment and materials offered to the pupils beyond those required to successfully complete the basic requirements of any other course, except that fees shall not be charged for pupils' access to or use of computers or related materials. Fees assessed pursuant to this paragraph shall be adopted at a public meeting after notice has been given to all parents of pupils enrolled at schools in the district and shall not exceed the actual costs of the activities, programs, services, equipment or materials. The governing board shall authorize principals to waive the assessment of all or part of a fee assessed pursuant to this paragraph if it creates an economic hardship for a pupil. For the purposes of this paragraph, "extracurricular activity" means any optional, noncredit, educational or recreational activity that supplements the education program of the school, whether offered before, during or after regular school hours.

25. Notwithstanding section 15-341, subsection A, paragraphs 7 and 9, construct school buildings and purchase or lease school sites, without a vote of the school district electors, if the buildings and sites are totally funded from one or more of the following:

(a) Monies in the unrestricted capital outlay fund, except that the estimated cost shall not exceed $250,000 for a district that uses section 15-949.

(b) Monies distributed at the direction of the school facilities oversight board established by section 41-5701.02 or by the school facilities division of school facilities within the department of administration pursuant to title 41, chapter 56.

This paragraph does not eliminate the requirement for an election to raise revenues for a capital outlay override pursuant to section 15-481 or a bond election pursuant to section 15-491.

26. Conduct a background investigation that includes a fingerprint check conducted pursuant to section 41-1750, subsection G for certificated personnel and personnel who are not paid employees of the school district, as a condition of employment. A school district may release the results of a background check to another school district for employment purposes. The school district may charge the costs of fingerprint checks to its fingerprinted employee, except that the school district may not charge the costs of fingerprint checks for personnel who are not paid employees of the school district.

27. Unless otherwise prohibited by law, sell advertising as follows:

(a) Advertisements shall be age appropriate and not promote any substance that is illegal for minors such as alcohol, tobacco and drugs or gambling. Advertisements shall comply with the state sex education policy of abstinence.

(b) Advertising approved by the governing board for the exterior of school buses may appear only on the sides of the bus in the following areas:

(i) The signs shall be below the seat level rub rail and not extend above the bottom of the side windows.

(ii) The signs shall be at least three inches from any required lettering, lamp, wheel well or reflector behind the service door or stop signal arm.

(iii) The signs shall not extend from the body of the bus so as to allow a handhold or present a danger to pedestrians.

(iv) The signs shall not interfere with the operation of any door or window.

(v) The signs shall not be placed on any emergency doors.

(c) The school district shall establish an advertisement fund that is composed of revenues from the sale of advertising. The monies in an advertisement fund are not subject to reversion.

28. Assess reasonable damage deposits to pupils in grades seven through twelve for using textbooks, musical instruments, band uniforms or other equipment required for academic courses. The governing board shall adopt policies on any damage deposits assessed pursuant to this paragraph at a public meeting called for this purpose after providing notice to all parents of pupils in grades seven through twelve in the school district. Principals of individual schools within the district may waive the damage deposit requirement for any textbook or other item if the payment of the damage deposit would create an economic hardship for the pupil. The school district shall return the full amount of the damage deposit for any textbook or other item if the pupil returns the textbook or other item in reasonably good condition within the time period prescribed by the governing board. For the purposes of this paragraph, "in reasonably good condition" means the textbook or other item is in the same or a similar condition as it was when the pupil received it, plus ordinary wear and tear.

29. Notwithstanding section 15-1105, expend surplus monies in the civic center school fund for maintenance and operations or unrestricted capital outlay if sufficient monies are available in the fund after meeting the needs of programs established pursuant to section 15-1105.

30. Notwithstanding section 15-1143, spend surplus monies in the community school program fund for maintenance and operations or unrestricted capital outlay if sufficient monies are available in the fund after meeting the needs of programs established pursuant to section 15-1142.

31. Adopt guidelines to standardize the format of the school report cards required by section 15-746 for schools within the district.

32. Adopt policies that require parental notification when a law enforcement officer interviews a pupil on school grounds. Policies adopted pursuant to this paragraph shall not impede a peace officer from performing the peace officer's duties. If the school district governing board adopts a policy that requires parental notification:

(a) The policy may provide reasonable exceptions to the parental notification requirement.

(b) The policy shall set forth whether and under what circumstances a parent may be present when a law enforcement officer interviews the pupil, including reasonable exceptions to the circumstances under which a parent may be present when a law enforcement officer interviews the pupil, and shall specify a reasonable maximum time after a parent is notified that an interview of a pupil by a law enforcement officer may be delayed to allow the parent to be present.

33. Enter into voluntary partnerships with any party to finance with monies other than school district monies and cooperatively design school facilities that comply with the adequacy standards prescribed in section 41-5711 and the square footage per pupil requirements pursuant to section 41-5741, subsection D, paragraph 3, subdivision (b). The design plans and location of any such school facility shall be submitted to the school facilities oversight board for approval pursuant to section 41-5741, subsection 0 Q. If the school facilities oversight board approves the design plans and location of any such school facility, the party in partnership with the school district may cause to be constructed and the district may begin operating the school facility before monies are distributed at the direction of the school facilities oversight board pursuant to section 41-5741. Monies distributed from the new school facilities fund to a school district in a partnership with another party to finance and design the school facility shall be paid to the school district pursuant to section 41-5741. The school district shall reimburse the party in partnership with the school district from the monies paid to the school district pursuant to section 41-5741, in accordance with the voluntary partnership agreement. Before the school facilities oversight board directs the distribution of any monies pursuant to this subsection, the school district shall demonstrate to the school facilities oversight board that the facilities to be funded pursuant to section 41-5741, subsection O Q meet the minimum adequacy standards prescribed in section 41-5711. If the cost to construct the school facility exceeds the amount that the school district receives from the new school facilities fund, the partnership agreement between the school district and the other party shall specify that, except as otherwise provided by the other party, any such excess costs shall be the responsibility of the school district. The school district governing board shall adopt a resolution in a public meeting that an analysis has been conducted on the prospective effects of the decision to operate a new school with existing monies from the school district's maintenance and operations budget and how this decision may affect other schools in the school district. If a school district acquires land by donation at an appropriate school site approved by the school facilities oversight board and a school facility is financed and built on the land pursuant to this paragraph, the school facilities oversight board shall direct the distribution of an amount equal to twenty percent of the fair market value of the land that can be used for academic purposes. The school district shall place the monies in the unrestricted capital outlay fund and increase the unrestricted capital budget limit by the amount of the monies placed in the fund. Monies distributed under this paragraph shall be distributed from the new school facilities fund pursuant to section 41-5741. If a school district acquires land by donation at an appropriate school site approved by the school facilities oversight board and a school facility is financed and built on the land pursuant to this paragraph, the school district shall not receive monies for the donation of real property pursuant to section 41-5741, subsection F I. It is unlawful for:

(a) A county, city or town to require as a condition of any land use approval that a landowner or landowners that entered into a partnership pursuant to this paragraph provide any contribution, donation or gift, other than a site donation, to a school district. This subdivision only applies to the property in the voluntary partnership agreement pursuant to this paragraph.

(b) A county, city or town to require as a condition of any land use approval that the landowner or landowners located within the geographic boundaries of the school subject to the voluntary partnership pursuant to this paragraph provide any donation or gift to the school district except as provided in the voluntary partnership agreement pursuant to this paragraph.

(c) A community facilities district established pursuant to title 48, chapter 4, article 6 to be used for reimbursement of financing the construction of a school pursuant to this paragraph.

(d) A school district to enter into an agreement pursuant to this paragraph with any party other than a master planned community party. Any land area consisting of at least three hundred twenty acres that is the subject of a development agreement with a county, city or town entered into pursuant to section 9-500.05 or 11-1101 shall be deemed to be a master planned community. For the purposes of this subdivision, "master planned community" means a land area consisting of at least three hundred twenty acres, which may be noncontiguous, that is the subject of a zoning ordinance approved by the governing body of the county, city or town in which the land is located that establishes the use of the land area as a planned area development or district, planned community development or district, planned unit development or district or other land use category or district that is recognized in the local ordinance of such county, city or town and that specifies the use of such land is for a master planned development.

34. Enter into an intergovernmental agreement with a presiding judge of the juvenile court to implement a law-related education program as defined in section 15-154. The presiding judge of the juvenile court may assign juvenile probation officers to participate in a law-related education program in any school district in the county. The cost of juvenile probation officers who participate in the program implemented pursuant to this paragraph shall be funded by the school district.

35. Offer to sell outdated learning materials, educational equipment or furnishings at a posted price commensurate with the value of the items to pupils who are currently enrolled in that school district before those materials are offered for public sale.

36. If the school district is a small school district as defined in section 15-901, and if allowed by federal law, opt out of federal grant opportunities if the governing board determines that the federal requirements impose unduly burdensome reporting requirements.

37. Prescribe and enforce policies and procedures for the emergency administration of inhalers by trained employees of the school district and nurses who are under contract with the school district pursuant to section 15-158.

38. Develop policies and procedures to allow principals to budget for or assist with budgeting federal, state and local monies.

39. Subject to article IX, section 7, constitution of Arizona, the laws pertaining to travel and subsistence, gifts, grants, including federal grants, or devises and policies adopted by the department of education, provide food and beverages at school district events, including official school functions and trainings. END_STATUTE

Sec. 2. Section 41-5702, Arizona Revised Statutes, is amended to read:

START_STATUTE41-5702. Powers and duties; staffing; reporting requirements

A. The division shall:

1. Assess school facilities and equipment deficiencies and approve the distribution of grants as appropriate.

2. Maintain a database of school facilities to allow for the administration of the new school facilities formula and the building renewal grant fund. The facilities listed in the database must include all buildings that are owned by school districts. The division shall ensure that the database is updated on at least an annual basis. Each school district shall report to the division not later than September 1 of each year information as required by the division to administer the building renewal grant fund and by the school facilities oversight board to compute new school facilities formula distributions, including the nature and cost of major repairs, renovations or physical improvements to or replacement of building systems or equipment that were made in the previous year and that were paid for either with local monies or monies provided from the building renewal grant fund. Each school district shall report any school or school buildings that have been closed, that are vacant or partially used pursuant to section 15-119 and that have been leased to another entity or that operate as a charter school. The division shall develop guidelines and definitions for the reporting prescribed in this paragraph and may review or audit the information, or both, to confirm the information submitted by a school district. Notwithstanding any other provision of this chapter, if a school district converts space that is listed in the database maintained pursuant to this paragraph to space that will be used for administrative purposes, the school district is responsible for any costs associated with converting, maintaining and replacing that space. If a building is significantly upgraded or remodeled, the division shall adjust the age of that school facility in the database as follows:

(a) Determine the building capacity value as follows:

(i) Multiply the student capacity of the building by the per pupil square foot capacity established by section 41-5741.

(ii) Multiply the product determined in item (i) of this subdivision by the cost per square foot established by section 41-5741.

(b) Divide the cost of the renovation by the building capacity value determined in subdivision (a) of this paragraph.

(c) Multiply the quotient determined in subdivision (b) of this paragraph by the currently listed age of the building in the database.

(d) Subtract the product determined in subdivision (c) of this paragraph from the currently listed age of the building in the database, rounded to the nearest whole number. If the result is a negative number, use zero.

3. Inspect, contract with a third party to inspect or certify school district self-inspections of school buildings at least once every five years to ensure compliance with the building adequacy standards prescribed in section 41-5711, the accuracy of the reporting of vacant and partially used buildings pursuant to this subsection and routine preventive maintenance guidelines as prescribed in this section with respect to constructing new buildings and maintaining existing buildings. The division shall randomly select twenty school districts every thirty months and provide for them to be inspected pursuant to this paragraph.

4. Develop prototypical elementary and high school designs. The division shall review the design differences between the schools with the highest academic productivity scores and the schools with the lowest academic productivity scores. The division shall also review the results of a valid and reliable survey of parent quality rating in the highest performing schools and the lowest performing schools in this state. The survey of parent quality rating shall be administered by the department of education. The division shall consider the design elements of the schools with the highest academic productivity scores and parent quality ratings in the development of elementary and high school designs. The division shall develop separate school designs for elementary, middle and high schools with varying pupil capacities.

5. Develop application forms, reporting forms and procedures to carry out the requirements of this article, including developing and implementing policies and procedures to:

(a) Ensure that the division and the school facilities oversight board, as applicable, notify school districts in a uniform manner of the services and funding available for school districts from the board or the division for facility construction, renovation and repair projects. The policies and procedures shall require the division and the board to provide at least one annual communication to school districts in a manner prescribed by the division and shall require each school district to develop and maintain a list of persons who are responsible for facilities management at that school district.

(b) Establish a project eligibility assessment for all projects submitted for building renewal grant funding or emergency deficiencies correction funding, including establishing standardized criteria for project eligibility. Before the division formally approves a project, the staff of the division may review the costs and scope of the proposed project with persons and entities that have submitted bids on the project.

(c) Ensure that the division and the school facilities oversight board maintain standardized documentation of all projects submitted to the board and the division for consideration to receive services or a financial award from the board or the division. The board and the division shall maintain standardized documentation of any project awarded monies by the board or the division, including records of payments to school districts in a manner prescribed by the division. The standardized documentation shall include the following as part of the eligibility determination criteria:

(i) Whether the problem that the proposed project intends to address caused the building or facility to fall below the minimum school facility adequacy guidelines prescribed in section 41-5711.

(ii) Whether the school district performed the routine preventive maintenance required by section 41-5731 on the building or facility.

(d) Require a school district to submit contact information for each proposed project, including the name, email address and telephone number of persons who are responsible for facilities management at the school district.

(e) Require a school district to provide justification for each proposed project, including all of the following:

(i) The school district's use or planned use of the facility.

(ii) A detailed description of the problem and the school district's recommended solution.

(iii) Any completed professional study regarding the proposed project.

(iv) Any citation or report from government entities.

(v) The estimated cost of the proposed project, with documentation.

(vi) The project category.

(vii) A description of any local funding that will be used for the proposed project.

(viii) Documentation on associated insurance coverage, if applicable.

(f) Require that an initial application not be considered complete until all necessary information is submitted.

(g) Allow a school district to submit an incomplete application and request technical assistance from the staff of the board if the school district is unable to provide sufficient information in the initial application.

(h) If applicable, require that a complete application be received by the board at least fifteen business days before the next regularly scheduled board meeting in order for the application to be considered at that meeting. An incomplete application may be considered at that meeting if both the staff of the board and the superintendent of the school district deem the project critical.

(i) Allow the staff of the board or the division, as applicable, to notify a school district in writing before review by the board or division that the proposed project does not meet eligibility criteria prescribed in this chapter. The written notification shall include documentation to support the determination that the proposed project does not meet the eligibility criteria prescribed in this chapter. The school district may directly appeal the determination of ineligibility to the director of the division. The school district may directly appeal the director's determination of ineligibility to the board.

(j) Prohibit the staff of the board or division from requesting that a school district withdraw a project application from review by the board or division if the initial review determines that the proposed project may be ineligible for monies pursuant to this chapter.

6. Submit electronically an annual report on or before December 15 to the speaker of the house of representatives, the president of the senate, the superintendent of public instruction, the secretary of state and the governor that includes the following information:

(a) A detailed description of the amount of monies distributed by the division under this chapter in the previous fiscal year.

(b) A list of each capital project that received monies from the division under this chapter during the previous fiscal year, a brief description of each project that was funded and a summary of the division's reasons for distributing monies for the project.

(c) A summary of the findings and conclusions of the building maintenance inspections conducted pursuant to this article during the previous fiscal year.

(d) A summary of the findings of common design elements and characteristics of the highest performing schools and the lowest performing schools based on academic productivity, including the results of the parent quality rating survey. For the purposes of this subdivision, "academic productivity" means academic year advancement per calendar year as measured with student-level data using the statewide nationally standardized norm-referenced achievement test.

7. On or before December 1 of each year, report electronically to the joint committee on capital review the amounts necessary to fulfill the requirements of section 41-5721 for the following three fiscal years. In developing the amounts necessary for this report, the division shall use the most recent average daily membership data available. On request from the division, the department of education shall make available the most recent average daily membership data for use in calculating the amounts necessary to fulfill the requirements of section 41-5721 for the following three fiscal years. The division shall provide copies of the report to the president of the senate, the speaker of the house of representatives and the governor.

8. On or before June 15 of each year, submit electronically detailed information regarding demographic assumptions and a proposed construction schedule for individual projects approved in the current fiscal year and expected project approvals for the upcoming fiscal year to the joint committee on capital review for its review. A copy of the report shall also be submitted electronically to the governor's office of strategic planning and budgeting. The joint legislative budget committee staff, the governor's office of strategic planning and budgeting staff and the division staff shall agree on the format of the report.

9. Every two years, provide school districts with information on improving and maintaining the indoor environmental quality in school buildings.

10. Adopt rules regarding the validation of adjacent ways projects pursuant to paragraph 11 of this subsection.

11. Validate proposed adjacent ways projects that are submitted by school districts as prescribed in section 15-995 pursuant to rules adopted by the division under paragraph 10 of this subsection.

12. Submit a monthly report to the school facilities oversight board that details each adjacent ways project validated pursuant to paragraph 11 of this subsection.

13. Brief the joint committee on capital review at least once each year regarding the use of monies from all of the following:

(a) The emergency deficiencies correction fund established by section 41-5721.

(b) The building renewal grant fund established by section 41-5731.

B. The school facilities oversight board or the division may contract for the following services in compliance with the procurement practices prescribed in chapter 23 of this title:

1. Private services.

2. Construction project management services.

3. Assessments for school buildings to determine if the buildings have outlived their useful life pursuant to section 41-5741, subsection G or have been condemned.

4. 3. Services related to land acquisition and development of a school site.

C. The school facilities oversight board shall:

1. Review and approve student population projections submitted by school districts to determine to what extent school districts are entitled to monies to construct new facilities pursuant to section 41-5741. The board shall make a final determination within five months after receiving an application from a school district for monies from the new school facilities fund.

2. Certify that plans for new school facilities meet the building adequacy standards prescribed in section 41-5711.

3. Review and approve or reject requests submitted by school districts to take actions pursuant to section 15-341, subsection G.

4. On or before December 15 of each year, electronically submit a report to the speaker of the house of representatives, the president of the senate, the superintendent of public instruction, the secretary of state and the governor that includes the following information:

(a) A detailed description of the amount of monies the board distributed under this chapter in the previous fiscal year.

(b) A list of each capital project that received monies from the board under this chapter during the previous fiscal year, a brief description of each project that was funded and a summary of the board's reasons for distributing monies for the project.

(c) A summary of the findings and conclusions of the building maintenance inspections conducted pursuant to this article during the previous fiscal year.

5. On or before December 1 of each year, electronically report to the joint committee on capital review the amounts necessary to fulfill the requirements of section 41-5741 for the following three fiscal years. In developing the amounts necessary for this report, the board shall use the most recent average daily membership data available. On request from the board, the department of education shall make available the most recent average daily membership data for use in calculating the amounts necessary to fulfill the requirements of section 41-5741 for the following three fiscal years. The board shall provide copies of the report to the president of the senate, the speaker of the house of representatives and the governor.

6. Adopt minimum school facility adequacy guidelines to provide the minimum quality and quantity of school buildings and the facilities and equipment necessary and appropriate to enable pupils to achieve the educational goals of the Arizona state schools for the deaf and the blind. The board shall establish minimum school facility adequacy guidelines applicable to the Arizona state schools for the deaf and the blind.

7. On or before June 15 of each year, electronically submit to the joint committee on capital review for its review detailed information regarding demographic assumptions, a proposed construction schedule and new school construction cost estimates for individual projects approved in the current fiscal year and expected project approvals for the upcoming fiscal year. A copy of the report shall also be submitted electronically to the governor's office of strategic planning and budgeting. The joint legislative budget committee staff, the governor's office of strategic planning and budgeting staff and the board staff shall agree on the format of the report.

8. On or before December 31 of each year, report to the joint legislative budget committee on all class B bond approvals by school districts in that year. Each school district shall report to the board on or before December 1 of each year information required by the board for the report prescribed in this paragraph.

D. The director of the division shall serve as the director of the school facilities oversight board. The director may hire and fire necessary staff subject to chapter 4, article 4 of this title and as approved by the legislature in the budget. The staff of the school facilities oversight board is exempt from chapter 4, articles 5 and 6 of this title. The director:

1. Shall analyze applications for monies submitted to the board and to the division by school districts.

2. Shall assist the board and the division in developing forms and procedures for distributing and reviewing applications and distributing monies to school districts.

3. May review or audit, or both, the expenditure of monies by a school district for deficiencies corrections and new school facilities.

4. Shall assist the board and the division in preparing the board's and division's annual reports.

5. Shall research and provide reports on issues of general interest to the board and the division.

6. May aid school districts in developing reasonable and cost-effective school designs in order to avoid statewide duplicated efforts and unwarranted expenditures in the area of school design.

7. May assist school districts in facilitating the development of multijurisdictional facilities.

8. Shall assist the board and the division in any other appropriate matter or method as directed by the division and the members of the board.

9. Shall establish procedures to ensure compliance with the notice and hearing requirements prescribed in section 15-905. The notice and hearing procedures adopted by the board shall include the requirement, with respect to the board's consideration of any application filed after July 1, 2001 or after December 31 of the year in which the property becomes territory in the vicinity of a military airport or ancillary military facility as defined in section 28-8461 for monies to fund the construction of new school facilities proposed to be located in territory in the vicinity of a military airport or ancillary military facility, that the military airport receive notification of the application by first class mail at least thirty days before any hearing concerning the application.

10. May expedite any request for monies in which the local match was not obtained for a project that received preliminary approval by the state board for school capital facilities.

11. Shall expedite any request for monies in which the school district governing board submits an application that shows an immediate need for a new school facility.

12. Shall determine administrative completeness within one month after receiving an application from a school district for monies from the new school facilities fund.

13. Shall provide technical support to school districts as requested by school districts in connection with constructing new school facilities and maintaining existing school facilities and may contract directly with construction project managers pursuant to subsection B of this section. This paragraph does not restrict a school district from contracting with a construction project manager using district or state resources.

E. When appropriate, the board and the division shall review and use the statewide school facilities inventory and needs assessment conducted by the joint committee on capital review and issued in July, 1995.

F. The school facilities oversight board shall contract with one or more private building inspectors to complete an initial assessment of school facilities and equipment and shall inspect each school building in this state at least once every five years to ensure compliance with section 41-5711. A copy of the inspection report, together with any recommendations for building maintenance, shall be provided to the school facilities oversight board and the governing board of the school district.

G. The division or the board, as applicable, may consider appropriate combinations of facilities or uses in assessing and curing deficiencies pursuant to subsection A, paragraph 1 of this section and in certifying plans for new school facilities pursuant to subsection C, paragraph 2 of this section.

H. The board shall not award any monies to fund new facilities that are financed by class A bonds that are issued by the school district.

I. The board or the division shall not distribute monies to a school district for replacing or repairing facilities if the costs associated with the replacement or repair are covered by insurance or a performance or payment bond.

J. The division may contract for construction services and materials that are necessary to correct existing deficiencies in school district facilities. The division may procure the construction services necessary pursuant to this subsection by any method, including construction-manager-at-risk, design-build, design-bid-build or job-order-contracting as provided by chapter 23 of this title. The construction planning and services performed pursuant to this subsection are exempt from section 41-791.01.

K. The division may enter into agreements with school districts to allow division staff and contractors access to school property for the purposes of performing the construction services necessary pursuant to subsection J of this section.

L. Each school district shall develop routine preventive maintenance guidelines for its facilities. The guidelines shall include plumbing systems, electrical systems, heating, ventilation and air conditioning systems, special equipment and other systems and for roofing systems shall recommend visual inspections performed by district staff for signs of structural stress and weakness. The guidelines shall be submitted to the division for review and approval. If on inspection by the division it is determined that a school district facility was inadequately maintained pursuant to the school district's routine preventive maintenance guidelines, the school district shall return the building to compliance with the school district's routine preventive maintenance guidelines.

M. The board and the division may temporarily transfer monies, or, if applicable, the board may direct the division to transfer monies, between the emergency deficiencies correction fund established by section 41-5721 and the new school facilities fund established by section 41-5741 if all of the following conditions are met:

1. The transfer is necessary to avoid a temporary shortfall in the fund into which the monies are transferred.

2. The transferred monies are restored to the fund where the monies originated as soon as practicable after the temporary shortfall in the other fund has been addressed.

3. The board and the division report to the joint committee on capital review the amount of and the reason for any monies transferred.

N. After notifying each school district, and if a written objection from the school district is not received by the board or the division within thirty days after the notification, the board or the division may access public utility company records of power, water, natural gas, telephone and broadband usage to assemble consistent and accurate data on utility consumption at school facilities to determine the effectiveness of facility design, operation and maintenance measures intended to reduce energy and water consumption and costs. Any public utility that provides service to a school district in this state shall provide the data requested by the board or the division pursuant to this subsection.

O. The division or the board shall not require a common school district that provides instruction to pupils in grade nine to obtain approval from the division or the board to reconfigure its school facilities. A common school district that provides instruction to pupils in grade nine is not entitled to additional monies from the division or the board for facilities to educate pupils in grade nine.

P. A school district may appeal the denial of a request for monies pursuant to this chapter or any other appealable agency action by the division or the board pursuant to chapter 6, article 10 of this title. For the purposes of this subsection, "appealable agency action" has the same meaning prescribed in section 41-1092. END_STATUTE

Sec. 3. Section 41-5711, Arizona Revised Statutes, is amended to read:

START_STATUTE41-5711. Minimum school facility adequacy requirements; definition

A. The board, as determined and prescribed in this chapter, shall provide funding to school districts for new construction as the number of pupils in the district fills the existing school facilities and requires more pupil space.

B. School buildings in a school district are adequate if all of the following requirements are met:

1. The buildings contain sufficient and appropriate space and equipment that comply with the minimum school facility adequacy guidelines established pursuant to subsection F of this section. The state shall not fund facilities for elective courses that require the school district facilities to exceed minimum school facility adequacy requirements. The board shall determine whether a school building meets the requirements of this paragraph by analyzing the total square footage that is available for each pupil in conjunction with the need for specialized spaces and equipment.

2. The buildings are in compliance with federal, state and local building and fire codes and laws that apply to the particular building, except that a school with an aggregate area of less than five thousand square feet is subject to permitting and inspection by a local fire marshal and is only subject to regulation or inspection by the office of the state fire marshal if the county, city or town in which the school is located does not employ a local fire marshal. An existing school building is not required to comply with current requirements for new buildings unless this compliance is specifically mandated by law or by the building or fire code of the jurisdiction where the building is located.

3. The building systems, including roofs, plumbing, telephone systems, electrical systems, heating systems and cooling systems, are in working order and are capable of being properly maintained.

4. The buildings are structurally sound.

C. The standards that shall be used by the board to determine whether a school building meets the minimum adequate gross square footage requirements are as follows:

1. For a school district that provides instruction to pupils in programs for preschool children with disabilities, kindergarten programs and grades one through six, eighty square feet per pupil in programs for preschool children with disabilities, kindergarten programs and grades one through six.

2. For a school district that provides instruction to up to eight hundred pupils in grades seven and eight, eighty-four square feet per pupil in grades seven and eight.

3. For a school district that provides instruction to more than eight hundred pupils in grades seven and eight, eighty square feet per pupil in grades seven and eight or sixty-seven thousand two hundred square feet, whichever is more.

4. For a school district that provides instruction to up to four hundred pupils in grades nine through twelve, one hundred twenty-five square feet per pupil in grades nine through twelve.

5. For a school district that provides instruction to more than four hundred and up to one thousand pupils in grades nine through twelve, one hundred twenty square feet per pupil in grades nine through twelve or fifty thousand square feet, whichever is more.

6. For a school district that provides instruction to more than one thousand and up to one thousand eight hundred pupils in grades nine through twelve, one hundred twelve square feet per pupil in grades nine through twelve or one hundred twenty thousand square feet, whichever is more.

7. For a school district that provides instruction to more than one thousand eight hundred pupils in grades nine through twelve, ninety-four square feet per pupil in grades nine through twelve or two hundred one thousand six hundred square feet, whichever is more.

D. The board may modify the square footage requirements prescribed in subsection C of this section or modify the amount of monies awarded to cure the square footage deficiency pursuant to this section for particular school districts based on extraordinary circumstances for any of the following considerations:

1. The number of pupils served by the school district.

2. Geographic factors.

3. Grade configurations other than those prescribed in subsection C of this section.

E. In measuring the square footage per pupil requirements of subsection C of this section, the board shall:

1. Use the projected one hundredth day average daily membership for the current school year.

2. For each school, use the lesser of either:

(a) Total gross square footage.

(b) Student capacity multiplied by the appropriate square footage per pupil prescribed by subsection C of this section.

3. Consider the total space available in all schools in use in the school district, except that the board shall allow an exclusion of the square footage for certain schools and the pupils within the schools' boundaries if the school district demonstrates to the board's satisfaction unusual or excessive busing of pupils or unusual attendance boundary changes between schools.

4. Compute the gross square footage of all buildings by measuring from exterior wall to exterior wall. Square footage used solely for district administration, storage of vehicles and other nonacademic purposes shall be excluded from the net square footage.

5. Include all portable and modular buildings.

6. Include in the net square footage new construction funded wholly or partially by the board based on the square footage funded by the board. If the new construction is to exceed the square footage funded by the board, the excess square footage shall not be included in the net square footage if any of the following applies:

(a) The excess square footage was constructed before July 1, 2002 or funded by a class B bond, impact aid revenue bond or capital outlay override approved by the voters after August 1, 1998 and before June 30, 2002 or funded from unrestricted capital outlay expended before June 30, 2002.

(b) The excess square footage of new school facilities does not exceed twenty-five percent of the minimum square footage requirements pursuant to subsection C of this section.

(c) The excess square footage of expansions to school facilities does not exceed twenty-five percent of the minimum square footage requirements pursuant to subsection C of this section.

7. Exclude square footage built under a developer agreement according to section 15-342, paragraph 33 until the board provides funding for the square footage under section 41-5741, subsection O Q.

8. Include square footage that a school district has leased to another entity.

F. The board shall adopt rules establishing minimum school facility adequacy guidelines. The guidelines shall provide the minimum quality and quantity of school buildings and facilities and equipment necessary and appropriate to enable pupils to achieve the academic standards pursuant to section 15-203, subsection A, paragraphs 12 and 13 and sections 15-701 and 15-701.01. At a minimum, the board shall address all of the following in developing these guidelines:

1. School sites.

2. Classrooms.

3. Libraries and media centers, or both.

4. Cafeterias.

5. Auditoriums, multipurpose rooms or other multiuse space.

6. Technology.

7. Transportation.

8. Facilities for science, arts and physical education.

9. Other facilities and equipment that are necessary and appropriate to achieve the academic standards prescribed pursuant to section 15-203, subsection A, paragraphs 12 and 13 and sections 15-701 and 15-701.01.

10. Appropriate combinations of facilities or uses listed in this section.

G. The board may convene subcommittees as needed on specific issues, including school facility safety standards. Notwithstanding any other law, a school district that receives grant monies from the building renewal grant fund established by section 41-5731 or monies from the new school facilities fund established by section 41-5741 shall consider school facility safety standards when completing approved projects or constructing new school facilities with monies received from those funds.

H. The board shall consider the facilities and equipment of the schools with the highest academic productivity scores, as prescribed in section 41-5702, subsection A, paragraph 6, subdivision (d), and the highest parent quality ratings in the establishment of the guidelines.

I. The board may consider appropriate combinations of facilities or uses in assessing and curing existing deficiencies pursuant to section 41-5702, subsection A, paragraph 1 and in certifying plans for new school facilities pursuant to section 41-5702, subsection C, paragraph 2.

J. If the board makes any changes to the minimum adequacy requirements prescribed in this section, the board shall provide a fiscal impact statement of the effect of the proposed changes to the joint committee on capital review for review.

K. For the purposes of this section, "student capacity" means the capacity adjusted to include any additions to or deletions of space, including modular or portable buildings at the school. The board shall determine the student capacity for each school in conjunction with each school district, recognizing each school's allocation of space as of July 1, 1998, to achieve the academic standards prescribed pursuant to section 15-203, subsection A, paragraphs 12 and 13 and sections 15-701 and 15-701.01. END_STATUTE

Sec. 4. Section 41-5731, Arizona Revised Statutes, is amended to read:

START_STATUTE41-5731. Building renewal grant fund; rules; definitions

A. The building renewal grant fund is established consisting of monies appropriated to the fund by the legislature. The division shall administer the fund and distribute monies to school districts for the purpose of maintaining the adequacy of existing school facilities except as provided in section 41-5741. Monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

B. The division shall distribute monies from the building renewal grant fund based on grant requests from school districts to fund primary building renewal projects. Project requests shall be prioritized by the division, with priority given to school districts that have provided routine preventive maintenance on the facility. A school district must submit a preventive maintenance plan to the division to be eligible to receive monies from the building renewal grant fund. The division shall approve only projects that will be completed within twelve months, unless similar projects on average take longer to complete. A grant issued under this section expires twelve months after the grant request is approved unless the division issues an extension, except that if the division approves a project and determines that similar projects on average take longer than twelve months to complete, the division shall extend the grant expiration date based on the average amount of time that similar projects take to complete. The division shall establish a process by which a school district may request an extension under this subsection. On expiration of a grant, a school district shall return any building renewal grant fund monies that the school district has not spent to the division for deposit in the building renewal grant fund. The division may spend monies from the fund for assessments to determine whether a grant from the fund is warranted under this section.

C. School districts that receive monies from the building renewal grant fund shall use these monies on projects for buildings or any part of a building in the division's database for any of the following:

1. Major renovations and repairs to a building that is used for student instruction or other academic purposes.

2. Upgrading systems and areas that will maintain or extend the useful life of the building.

3. Infrastructure costs.

D. Monies received from the fund shall not be used for any of the following purposes:

1. New construction.

2. Remodeling interior space for aesthetic or preferential reasons.

3. Exterior beautification.

4. Demolition.

5. Routine preventive maintenance.

6. Any project in a building, or part of a building, that is being leased to another entity.

E. Accommodation schools are not eligible for monies from the building renewal grant fund. projects for which a school district receives monies from the new school facilities fund established by section 41-5741 are not eligible for monies from the building renewal grant fund.

F. If the division or a court of competent jurisdiction determines that a school district received monies from the building renewal grant fund that must be reimbursed to the division due to legal action associated with improper construction by a hired contractor, the school district shall reimburse the division an agreed-on amount for deposit into in the building renewal grant fund.

G. The division shall categorize each project that is eligible for monies from the building renewal grant fund as either critical or noncritical. The division shall adopt policies and procedures to prioritize critical projects and to designate critical projects as projects that immediately impact student safety or building closures or that result in operational disruptions. Critical projects have priority over any previously approved noncritical projects.

H. If the division determines that sufficient monies are not available for a noncritical project that the division has approved, the division shall notify the school district that submitted the project request that monies will be distributed from the building renewal grant fund for the project only if the legislature appropriates sufficient monies. If sufficient monies are not available in the fiscal year in which the project is awarded for a noncritical project, the noncritical project does not receive priority in the next fiscal year.

I. Building renewal grants pursuant to this section shall be used only for projects that serve an academic purpose.

J. The division shall do both of the following:

1. Implement policies and procedures to require a school district to report the preventive maintenance activities completed during the previous twelve months for the facility for which the monies are being requested.

2. Submit a monthly report to the school facilities oversight board that details how monies from the building renewal grant fund have been distributed.

K. In addition to establishing a project eligibility assessment under section 41-5702, subsection A, paragraph 5, subdivision (b), the division shall adopt rules regarding both of the following:

1. The approval of building renewal grants pursuant to this section.

2. Time frames for the division regarding all of the following with respect to this section:

(a) Approving or denying grant requests for critical projects.

(b) Notifying an applicant if the applicant's application is incomplete.

(d) Distributing monies from the building renewal grant fund.

L. The board shall review all policies and procedures that the division develops to administer this section.

M. The division may spend monies from the fund for assessments to determine if whether a grant from the fund is warranted under this section.

N. For the purposes of this section:

1. "Primary building renewal projects" means projects that are necessary for buildings owned by school districts that are required to meet the minimum adequacy standards for student capacity and that fall below the minimum school facility adequacy guidelines, as adopted by the board pursuant to section 41-5711, for school districts that have provided routine preventive maintenance to the school facility.

2. "Routine preventive maintenance" means services that are performed on a regular schedule at intervals ranging from four times a year to once every three years, or on the schedule of services recommended by the manufacturer of the specific building system or equipment, and that are intended to extend the useful life of a building system and reduce the need for major repairs.

3. "Student capacity" has the same meaning prescribed in section 41-5711. END_STATUTE

Sec. 5. Section 41-5741, Arizona Revised Statutes, is amended to read:

START_STATUTE41-5741. New school facilities fund; capital plan; reporting requirements

A. The new school facilities fund is established consisting of monies appropriated by the legislature and monies credited to the new school facilities fund pursuant to section 37-221. The division shall administer the new school facilities fund and, at the direction of the school facilities oversight board, shall distribute monies, as a continuing appropriation, to school districts for the purpose of:

1. Constructing new school facilities.

2. and for Contracted expenses pursuant to section 41-5702, subsection B, paragraphs 2, 3 and 4.

3. Renovating or replacing a facility or facilities that a school district believes pose a health or safety threat to students and are beyond their useful life.

B. The school facilities oversight board shall prescribe a uniform format for use by the school district governing board in developing and annually updating a capital plan for new school facilities construction that consists of each of the following:

1. Enrollment projections for the next five years for elementary schools and eight years for middle and high schools, including a description of the methods used to make the projections.

2. A description of new schools or additions to existing schools needed to meet the building adequacy standards prescribed in section 41-5711. The description shall include:

(a) The grade levels and the total number of pupils that the school or addition is intended to serve.

(b) The year in which it is necessary for the school or addition to begin operations.

3. Long-term projections of the need for land for new schools.

4. Any other necessary information required by the school facilities oversight board to evaluate a school district's capital plan.

5. If a school district pays tuition for all or a portion of the school district's high school pupils to another school district, the capital plan shall indicate the number of pupils for which the district pays tuition to another district. If a school district accepts pupils from another school district pursuant to section 15-824, subsection A, the school district shall indicate the projections for this population separately. This paragraph does not apply to a small isolated school district as defined in section 15-901.

C. If the capital plan prescribed in subsection B of this section indicates a need for a new school or an addition to an existing school within the next four years or a need for land within the next ten years, the school district shall submit its plan to the school facilities oversight board on or before September 1 and shall request monies from the new school facilities fund for the new construction or land. The board may require a school district to sell land that was previously purchased entirely with monies provided by the board if the board determines that the property is no longer needed within the ten-year period specified in this subsection for a new school or no longer needed within that ten-year period for an addition to an existing school. Monies provided for land are in addition to any monies provided pursuant to subsection D of this section.

D. At the direction of the board, the division shall distribute monies from the new school facilities fund for additional square footage for new school facilities construction as follows:

1. The board shall review and evaluate the enrollment projections. On or before December 15 of each year, following the submission of the enrollment projections, the board shall either approve the projections as submitted or revise the projections. In approving or revising the enrollment projections, the board shall use the average daily membership data available during the current school year. On request from the board, the department of education shall make available the most recent average daily membership data for use in revising the enrollment projections. In determining new construction requirements, the board shall determine the net new growth of pupils that will require additional square footage that exceeds the building adequacy standards prescribed in section 41-5711. If the projected growth and the existing number of pupils exceed three hundred fifty pupils who are served in a school district other than the pupil's resident school district, the board, the receiving school district and the resident school district shall develop a capital facilities plan on how to best serve those pupils. A small isolated school district as defined in section 15-901 is not required to develop a capital facilities plan pursuant to this paragraph.

2. If the average daily membership projections indicate that additional space will not be needed within the next two school years in order to meet the building adequacy standards prescribed in section 41-5711, the request shall be held for consideration by the board for possible future funding and the school district shall annually submit an updated plan until the additional space is needed.

3. If the average daily membership projections indicate that additional space will be needed within the next two school years in order to meet the building adequacy standards prescribed in section 41-5711, the board shall provide an amount as follows:

(a) Determine the number of pupils requiring additional square footage to meet building adequacy standards. This amount for elementary schools shall not be less than the number of new pupils for whom space will be needed in the next year and shall not exceed the number of new pupils for whom space will be needed in the next five years. This amount for middle and high schools shall not be less than the number of new pupils for whom space will be needed in the next four years and shall not exceed the number of new pupils for whom space will be needed in the next eight years.

(b) Multiply the number of pupils determined in subdivision (a) of this paragraph by the square footage per pupil. The square footage per pupil is ninety square feet per pupil for preschool children with disabilities, kindergarten programs and grades one through six, one hundred square feet for grades seven and eight, one hundred thirty-four square feet for a school district that provides instruction in grades nine through twelve for fewer than one thousand eight hundred pupils and one hundred twenty-five square feet for a school district that provides instruction in grades nine through twelve for at least one thousand eight hundred pupils. The total number of pupils in grades nine through twelve in the district shall determine the square footage factor to use for net new pupils. The board may modify the square footage requirements prescribed in this subdivision for particular schools based on any of the following factors:

(i) The number of pupils served or projected to be served by the school district.

(ii) Geographic factors.

(iii) Grade configurations other than those prescribed in this subdivision.

(iv) Compliance with minimum school facility adequacy requirements established pursuant to section 41-5711.

(c) Multiply the product obtained in subdivision (b) of this paragraph by the cost per square foot. The cost per square foot is $270.24 for preschool children with disabilities, kindergarten programs and grades one through six, $285.30 for grades seven and eight and $330.30 for grades nine through twelve. The cost per square foot shall be adjusted annually for construction market considerations based on an index identified or developed by the joint legislative budget committee as necessary but not less than once each year. Each annual construction market adjustment applies to all projects approved by the school facilities oversight board under this subsection during that year. The board shall multiply the cost per square foot by 1.05 for any school district located in a rural area. The board may only modify the base cost per square foot prescribed in this subdivision for particular schools based on geographic conditions or site conditions. Any extra monies received as a result of a modification based on geographic conditions or site conditions may be used to address unforeseen costs at any stage of a project under this section. For the purposes of this subdivision, "rural area" means an area outside a thirty-five-mile radius of a boundary of a municipality with a population of more than fifty thousand persons.

(d) Once the school district governing board obtains approval from the board for new facility construction monies, additional portable or modular square footage created for the express purpose of providing temporary space for pupils until the completion of the new facility and any additional space funded by the school district shall not be included by the board for the purpose of new construction funding calculations. On completion of the new facility construction project, any additional space funded by the school district shall be included as prescribed by this chapter and, if the portable or modular facilities continue in use, the portable or modular facilities shall be included as prescribed by this chapter, unless the board approves their continued use for the purpose of providing temporary space for pupils until the completion of the next new facility that has been approved for funding from the new school facilities fund.

4. For projects approved after December 31, 2001, and notwithstanding paragraph 3 of this subsection, a unified school district that does not have a high school is not eligible to receive high school space as prescribed by section 41-5711 and this section unless the unified district qualifies for geographic factors prescribed by paragraph 3, subdivision (b), item (ii) of this subsection.

5. If a career technical education district leases a building from a school district, that building shall be included in the school district's square footage calculation for the purposes of new construction pursuant to this section.

6. If a school district leases a building to another entity, that building shall be included in the school district's square footage calculation for purposes of new construction pursuant to this section.

7. A school district shall qualify for monies from the new school facilities fund for additional square footage in a fiscal year only if the board has approved or revised its enrollment projection under paragraph 1 of this subsection on or before December 15 of the prior fiscal year.

E. The school facilities oversight board shall prescribe a uniform format for use by school district governing boards in developing a capital plan for construction to renovate or replace school facilities. The capital plan shall include both of the following:

1. The condition of the school facility that the school district is proposing to renovate or replace, including any health and safety concerns that cause a significant burden to the school district.

2. A description of all school district facilities of the same type the school district is proposing to replace or renovate that are not currently being used for education for pupils in programs for preschool children with disabilities, kindergarten programs or grades one through twelve and that are within a five-mile radius of the school facility, including school district facilities that are outside of the school district's boundaries.

F. A school district may apply to the board for new school facilities fund monies to renovate or replace an existing school facility. On receipt of a completed application from a school district for monies to renovate or replace an existing school facility, The board shall review the application. If it is clear from the application that the school district does not satisfy one or more of the qualifications prescribed in this subsection, the board shall deny the application. After the initial review, the board shall notify the division, and the division shall procure an assessment in accordance with chapter 23 of this title, except that the division may not procure an assessment if the division is able to determine without an assessment that the school district does not satisfy one or more of the qualifications PRESCRIBED in this subsection. The assessment shall determine whether the facility poses a health or safety threat to students, shall determine whether the facility is beyond its useful life and shall include A facility condition index to determine whether the cost to repair the facility is fifty percent or more over a five-year period than the cost to renovate or replace the facility. The division shall submit the assessment and the division's recommendation to the board, or, if the division determines without an assessment that the school district does not SATISFY one or more of the qualifications prescribed in this subsection, the division shall submit this determination to the board, and the board shall determine whether the facility is suitable for renovation or replacement. at the direction of the board and subject to legislative appropriation, the division shall distribute monies from the fund in an amount determined by the board after review of the assessment if all of the following apply:

1. The school district does not have access to underutilized school facilities of the same type that could serve as an adequate replacement within a five-mile radius of the school facility that the school district is proposing to renovate or replace.

2. The school district does not have sufficient school facilities of the same type and on the same property as the proposed project that are being underutilized.

3. The assessment procured by the division reveals that the cost to repair the facility over a five-year period is at least fifty percent of the cost to meet the minimum school facility adequacy guidelines as adopted by the board pursuant to section 41-5711 and that the facility poses a health or safety threat to students and is beyond its useful life.

4. The school at which the facility will be renovated or replaced both:

(a) Has an enrollment of at least seventy-five percent of the amount generated by the minimum adequate gross square footage requirements prescribed in section 41-5711.

(b) Has not received a letter grade designation of D or F pursuant to section 15-241 on the three most recent report cards.

5. The legislature appropriates a sufficient amount of monies for construction costs for the renovation or replacement, including costs for demolishing, removing or moving an existing facility.

G. The board shall limit the scope of renovation or replacement projects under this section according to the following factors:

1. The number of pupils served or projected to be served by the school as determined by the division.

2. Geographic factors.

3. Compliance with minimum school facility adequacy requirements established pursuant to section 41-5711.

E. H. Monies for architectural and engineering fees, project management services and preconstruction services shall be distributed on the completion of the analysis by the board of the school district's request. After receiving monies pursuant to this subsection, the school district shall submit a design development plan for the school or addition to the board before any monies for construction are distributed. If the school district's request meets the building adequacy standards, the board may review and comment on the district's plan with respect to the efficiency and effectiveness of the plan in meeting state square footage and facility standards before directing the distribution of the remainder of the monies. If the board modifies the cost per square foot as prescribed in subsection D, paragraph 3, subdivision (c) of this section, the board may deduct the cost of project management services and preconstruction services from the required cost per square foot. The board may decline to fund the project if the square footage is no longer required due to revised enrollment projections. The board may decline a portion of the funding if a portion of the square footage is no longer needed due to revised enrollment projections.

F. I. At the direction of the board, the division shall distribute the monies needed for land for new schools so that land may be purchased at a price that is less than or equal to fair market value and in advance of the construction of the new school. If necessary, the board may direct the division to distribute monies for land to be leased for new schools if the duration of the lease exceeds the life expectancy of the school facility by at least fifty percent. A school district shall not use land purchased or partially purchased with monies provided at the direction of the board for a purpose other than a site for a school facility without obtaining prior written approval from the board. A school district shall not lease, sell or take any action that would diminish the value of land purchased or partially purchased with monies provided at the direction of the board without obtaining prior written approval from the board. The proceeds derived through the sale of any land purchased or partially purchased, or the sale of buildings funded or partially funded, with monies provided at the direction of the board shall be returned to the state fund from which it was appropriated and to any other participating entity on a proportional basis. Except as provided in section 15-342, paragraph 33, if a school district acquires real property by donation at an appropriate school site approved by the board, the board shall direct the division to distribute an amount equal to twenty percent of the fair market value of the donated real property that can be used for academic purposes. The school district shall place the monies in the unrestricted capital outlay fund and increase the unrestricted capital budget limit by the amount of monies placed in the fund. Monies distributed under this subsection shall be distributed from the new school facilities fund. A school district that receives monies from the new school facilities fund for a donation of land pursuant to section 15-342, paragraph 33 shall not receive monies from the board or the division for the donation of real property pursuant to this subsection. A school district shall not pay a consultant a percentage of the value of any of the following:

1. Donations of real property, services or cash from any of the following:

(a) Entities that have offered to provide construction services to the school district.

(b) Entities that have been contracted to provide construction services to the school district.

(d) Entities that develop land for residential use in that school district.

2. Monies received under this chapter on behalf of the school district.

3. Monies paid by or at the direction of the board on behalf of the school district.

G. In addition to distributions to school districts based on pupil growth projections, a school district may submit an application to the board for monies from the new school facilities fund if one or more school buildings have outlived their useful life or have been condemned. If the board determines that the school district needs to build a new school building for these reasons, the board shall remove the square footage computations that represent the building from the computation of the school district's total square footage for purposes of this section. If the square footage recomputation reflects that the school district no longer meets building adequacy standards, the school district qualifies for a distribution of monies from the new school construction formula in an amount determined pursuant to subsection D of this section. The board may only modify the base cost per square foot prescribed in this subsection under extraordinary circumstances for geographic factors or site conditions.

H. J. School districts that receive monies from the new school facilities fund shall establish a district new school facilities fund and shall use the monies in the district new school facilities fund only for the purposes prescribed in this section. By October 15 of each year, each school district shall report to the board the projects funded at each school in the previous fiscal year with monies from the district new school facilities fund and shall provide an accounting of the monies remaining in the new school facilities fund at the end of the previous fiscal year.

I. K. If a school district has surplus monies received from the new school facilities fund, the school district may use the surplus monies only for capital purposes for the project for up to one year after completion of the project. If the school district possesses surplus monies from the new school construction project that have not been expended within one year of the completion of the project, the school district shall return the surplus monies to the division for deposit in the new school facilities fund.

J. L. The board's consideration of any application filed after December 31 of the year in which the property becomes territory in the vicinity of a military airport or ancillary military facility as defined in section 28-8461 for monies to fund the construction of new school facilities proposed to be located in territory in the vicinity of a military airport or ancillary military facility shall include, if after notice is transmitted to the military airport pursuant to section 41-5702 and before the public hearing the military airport provides comments and an analysis concerning compatibility of the proposed school facilities with the high noise or accident potential generated by military airport or ancillary military facility operations that may have an adverse effect on public health and safety, consideration and an analysis of the comments and an analysis provided by the military airport before making a final determination.

K. M. If a school district uses its own project manager for new school construction, the members of the school district governing board and the project manager shall sign an affidavit stating that the members and the project manager understand and will follow the minimum adequacy requirements prescribed in section 41-5711.

L. N. The division shall establish a separate account in the new school facilities fund designated as the litigation account to pay attorney fees, expert witness fees and other costs associated with litigation in which the board pursues the recovery of damages for deficiencies correction that resulted from alleged construction defects or design defects that the board believes caused or contributed to a failure of the school building to conform to the building adequacy requirements prescribed in section 41-5711. Attorney fees paid pursuant to this subsection shall not exceed the market rate for similar types of litigation. On or before December 1 of each year, the board shall report to the joint committee on capital review the costs associated with current and potential litigation that may be paid from the litigation account.

M. O. Until the state board of education and the auditor general adopt rules pursuant to section 15-213, subsection J, the board may allow school districts to contract for construction services and materials through the qualified select bidders list method of project delivery for new school facilities pursuant to this section.

N. P. The board shall submit electronically a report on project management services and preconstruction services to the governor, the president of the senate and the speaker of the house of representatives by December 31 of each year. The report shall compare projects that use project management and preconstruction services with those that do not. The report shall address cost, schedule and other measurable components of a construction project. School districts, construction-manager-at-risk firms and project management firms that participate in a board-funded project shall provide the information required by the board in relation to this report.

O. Q. If a school district constructs new square footage according to section 15-342, paragraph 33, the board shall review the design plans and location of any new school facility submitted by school districts and another party to determine whether the design plans comply with the adequacy standards prescribed in section 41-5711 and the square footage per pupil requirements pursuant to subsection D, paragraph 3, subdivision (b) of this section. When the school district qualifies for a distribution of monies from the new school facilities fund according to this section, the board shall direct the division to distribute monies to the school district from the new school facilities fund for the square footage constructed under section 15-342, paragraph 33 at the same cost per square foot established by this section that was in effect at the time of the beginning of the construction of the school facility. Before the board directs the division to distribute any monies pursuant to this subsection, the school district shall demonstrate to the board that the facilities to be funded pursuant to this section meet the minimum adequacy standards prescribed in section 41-5711. The agreement entered into pursuant to section 15-342, paragraph 33 shall set forth the procedures for the allocation of these funds to the parties that participated in the agreement.

P. R. Accommodation schools are not eligible for monies from the new school facilities fund.

Q. S. If the board approves a school district for funding from the new school facilities fund For new school facilities construction and the full legislative appropriation is not available to the school district in the fiscal year following the approval by the board, the school district may use any legally available monies to pay for the land or the new construction project approved by the board and may reimburse the fund from which the monies were used in subsequent years with legislative appropriations when those appropriations are made available by this state. This subsection does not apply to renovation or replacement projects. END_STATUTE

Sec. 6. Effective date

This act is effective from and after December 31, 2022.