ARIZONA STATE SENATE

Fifty-Fifth Legislature, Second Regular Session

AMENDED

FACT SHEET FOR H.B. 2017

STEM funding; appropriation

Purpose

Appropriates $10,927,700 from the state General Fund (state GF) in FY 2023 to specified community colleges for science, technology, engineering and mathematics (STEM) and workforce programs. Specifies amounts that must be withheld from the state aid of a community college district (CCD) that exceeds the expenditure limit in FYs 2023 and 2024.

Background

The State of Arizona must provide state aid to each CCD for STEM and workforce programs. The statutory STEM and workforce formula requires the state to pay to a CCD an amount equal to the actual full-time equivalent students (FTSE) in the most recent fiscal year, multiplied by: 1) for a CCD with a FTSE of less than 5,000, $207 adjusted by the growth rate for common and high school districts; and 2) for a CCD with a FTSE of at least 5,000, $158 adjusted by the growth rate for common and high school districts. The FTSE is equal to the sum of the FTSE 45 days after classes begin in the fall semester and the FTSE 45 days after classes begin in the spring semester, divided by two (A.R.S. §§ 15-1464 and 15-1466.01).

STEM and workforce program expenditures may include: 1) partnerships with businesses and educational institutions; 2) additional faculty for improved and expanded instruction and course offerings; 3) technology and equipment for advanced teaching; 4) student services such as assessment, advisement and counseling for job opportunities; and 5) the purchase, lease or lease-purchase of real property for buildings or facilities (A.R.S. § 15-1464).

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). If a CCD exceeds the expenditure limit, the State Treasurer must withhold statutorily prescribed amounts from the CCD's state aid allocation (A.R.S. § 41-1279.07).

H.B. 2017 appropriates a total of $10,927,700 from the state GF for Maricopa, Pima and Pinal community college STEM and workforce programs in FY 2023.

Provisions

1. Appropriates the following amounts from the state GF in FY 2023 for STEM and workforce programs:

a) $8,600,000 to the Maricopa Community Colleges;

b) $1,776,600 to the Pima Community Colleges; and

c) $551,100 to the Pinal Community Colleges.

2. 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 the following amounts, rather than as statutorily prescribed:

a) $5,000, if the excess expenditures are less than five 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; and

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.

3. 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.

4. 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.

5. Makes technical changes.

6. Becomes effective on the general effective date, with a retroactive provision as noted.

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.

House Action Senate Action

ED 2/1/22 DPA 10-0-0-0 ED 3/15/22 DP 8-0-0

3^rd Read 2/24/22 49-9-2 APPROP 3/29/22 DPA 10-0-0

Prepared by Senate Research

June 22, 2022

LB/MS/slp