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ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
AMENDED
STEM funding; appropriation
Purpose
Modifies, for FY 2023, the amounts that must be withheld from the state aid of a community college district (CCD) that exceeds the expenditure limit.
Background
The Arizona Constitution establishes CCD expenditure limits which are annually determined by adjusting each CCD's FY 1980 local revenues expenditures for student population and cost of living (Ariz. Const. art. 9 § 21). Statute directs the Legislature to determine a CCD's state aid and expenditure limit each fiscal year according to prescribed formulas and adjustments based on the CCDs full-time student equivalent (FTSE) count. The FTSE calculation method depends on if the FTSE count will be used for the state aid calculation or the expenditure limit calculation (A.R.S. Title 15, Chapter 12, Article 4). If a CCD exceeds the expenditure limit, the State Treasurer must withhold, from the CCD's state aid allocation, an amount equal to: 1) the excess expenditures, if excess expenditures are less than 5 percent of the limitation; 2) triple the excess expenditures, if excess expenditures are at least 5 percent but less than 10 percent of the limitation; or 3) the lesser of five times the excess expenditures or one-third of the state aid allocation, if excess expenditures are at least 10 percent of the limitation (A.R.S. § 41-1279.07).
There is no anticipated fiscal impact to the state General Fund (state GF) associated with this legislation.
Provisions
1. Requires state aid for FY 2023 to be withheld from a CCD that exceeds its expenditure limit in the following amounts, rather than as statutorily prescribed:
a) $5,000, if the excess expenditures are less than 5 percent of the limit;
b) $15,000, if the excess expenditures are at least 5 percent and under 10 percent of the limit;
c) $20,000, if the excess expenditures are at least 10 percent and under 12 percent of the limit; or
d) an amount equal to the lesser of one-third of the state aid allocation or five times the excess expenditures, if excess expenditures are at least 12 percent of the limit.
2. Caps, at one percent of the provisional CCD’s budget, the amount of state aid that may be withheld from a provisional CCD established before December 31, 2015, in a county with a population that does not exceed 300,000 persons.
3. Makes technical changes.
4. Becomes effective on the general effective date, retroactive to July 1, 2021.
Amendments Adopted by the Appropriations Committee
1. Requires, retroactive to July 1, 2021, state aid for FYs 2023 and 2024 to be withheld from a CCD that exceeds its expenditure limit in specified amounts based on the percentage by which the limit is exceeded.
2. Makes conforming changes.
Amendments Adopted by Committee of the Whole
1. Reinstates the specification that the state aid formula for community college STEM and workforce programs is subject to appropriation.
2. Caps the amount of state aid that may be withheld from a provisional CCD established before December 31, 2015, in a county with a population that does not exceed 300,000 persons.
3. Specifies that the FY 2023 state aid for STEM and workforce development programs for the Maricopa, Pima and Pinal CCDs is as prescribed in this legislation.
4. Makes conforming changes.
Amendments Adopted by Conference Committee
1. Removes the appropriations from the state GF in FY 2023 for Maricopa, Pima and Pinal community college STEM and workforce programs.
2. Limits, to FY 2023, the application of the alternative state withholding amounts for exceeding the expenditure limit.
3. Makes conforming changes.
House Action Senate Action
ED 2/1/22 DPA 10-0-0-0 ED 3/15/22 DP 8-0-0
3rd Read 2/24/22 49-9-2 APPROP 3/29/22 DPA 10-0-0
Prepared by Senate Research
June 24, 2022
LB/slp