Bill Text: AZ HB2167 | 2025 | Fifty-seventh Legislature 1st Regular | Introduced
Bill Title: School districts; records; noncompliance; penalties
Spectrum: Partisan Bill (Republican 5-0)
Status: (Introduced) 2025-02-18 - House minority caucus: Do pass [HB2167 Detail]
Download: Arizona-2025-HB2167-Introduced.html
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REFERENCE TITLE: school districts; records; noncompliance; penalties |
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State of Arizona House of Representatives Fifty-seventh Legislature First Regular Session 2025
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HB 2167 |
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Introduced by Representatives Gress: Carbone, Carter P, Martinez; Senator Carroll
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AN ACT
amending sections 15-272, 15-302, 15-481, 15-491 and 15-747, Arizona Revised Statutes; relating to school district financial records.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 15-272, Arizona Revised Statutes, is amended to read:
15-272. Duties; department of education; state board of education; sanctions for noncompliance with uniform system of financial records; civil penalties
A. The department of education shall advise and consult with the auditor general in the preparation preparing and implementation of implementing a uniform system of financial records.
B. The state board of education, on report from the auditor general, shall determine whether school districts are maintaining the uniform system of financial records. If the state board of education determines that a school district is not in compliance with the uniform system of financial records or has failed to correct a deficiency within ninety days after receiving notice from the auditor general for one of the following periods of time, the state board of education shall:
1. If the school district fails to correct a deficiency within ninety days after receiving notice from the auditor general, direct the superintendent of public instruction to withhold up to ten per cent percent of the portion of state monies to the school district for each violation from the date of the determination until such time as the auditor general reports the school district's compliance with the uniform system of financial records. The auditor general and the department of education shall assist the school district to achieve compliance during such period.
2. If the school district fails to correct a deficiency within eighteen months after receiving notice from the auditor general, consult with the department of education to determine the amount of training and other interventions necessary or appropriate to assist the school district to achieve compliance and direct the superintendent of public instruction to do all of the following:
(a) Provide the training and interventions within six months. Any training under this subdivision must be provided to the school district's superintendent, business manager and chief financial officer and any other administrator or executive identified by the state board of education or the department of education. The department of education shall notify the state board of education when the training and interventions provided pursuant to this subdivision are completed.
(b) Impose a civil penalty against the school district in an amount equal to one percent of the school district's adopted or revised budget for each month, beginning the eighteenth month, until such time as the auditor general reports the school district's compliance with the uniform system of financial records.
(c) Deposit, pursuant to sections 35-146 and 35-147, penalties collected pursuant to subdivision (b) of this paragraph in the school financial transparency portal fund established by section 15-747.
C. The general budget limit and maintenance and operations section of the budget for the current year and for the budget year if the school district is not in compliance before the end of the current year, shall be reduced by the amount determined in subsection B, paragraph 1 of this section until the state board of education determines that the school district is in compliance.
D. If compliance is determined by the state board of education in the same year as the determination of noncompliance or in the first year after the fiscal year of the determination of noncompliance, the resulting adjustment to budgeted maintenance and operations and to the general budget limit may be applied to the fiscal year of the determination of noncompliance equal to the amount adjusted in that fiscal year or to the current year equal to the amount adjusted in the current year. Previously withheld monies that resulted from the determination of noncompliance shall be returned in the year compliance is determined.
Sec. 2. Section 15-302, Arizona Revised Statutes, is amended to read:
15-302. Powers and duties
A. The county school superintendent shall:
1. Distribute all laws, reports, circulars, instructions and forms that the county school superintendent may receive for the use of school officers.
2. Record all official acts.
3. Appoint governing board members of school districts to fill all vacancies, but the term of the appointment shall be until the next regular election for governing board members, at which time a successor shall be elected to serve the unexpired portion of the term. A person who is subject to registration as a sex offender in this state or in any other jurisdiction is ineligible for appointment under this paragraph. Within thirty days after notification of a vacancy, the school district governing board may submit up to three names to the county school superintendent for consideration of an appointment to fill the vacancy. The county school superintendent is not required to appoint a governing board member from the list of names submitted by the governing board. The county school superintendent, if the county school superintendent deems it in the best interest of the community, may call a special election to fill the vacancies. If an election is called, the newly elected member shall serve for the remainder of the unexpired portion of the term.
4. Make reports, when directed by the superintendent of public instruction, showing matters relating to schools in the county as may be required on the forms furnished by the superintendent of public instruction.
5. Have such powers and perform such duties as otherwise prescribed by law.
6. On or before October 1 of each year, report to the superintendent of public instruction the amount of monies received from state school funds, special school district taxes and other sources, the total expenditures for school purposes and the balance on hand to the credit of each school district at the close of the school year.
7. Contract with the board of supervisors for the board of supervisors to conduct all regular school district elections.
8. Be responsible, in cooperation with the school district governing boards and the board of supervisors, for all special school district elections.
9. Maintain teacher and administrator certification records of effective dates and expiration dates of teachers' and administrators' certificates in compliance with guidelines prescribed in the uniform system of financial records for those school districts for which the county school superintendent is the fiscal agent. The county school superintendent shall not draw a warrant in payment of a teacher's, substitute teacher's or administrator's salary unless the teacher, substitute teacher or administrator is legally certified during the fiscal year in which the term for payment is demanded.
10. Notify a school district three years before the expiration of a revenue control limit override that the school district's budget must be adjusted in the final two years of the override pursuant to section 15-481, subsections P Q and Q r, if the voters do not approve another override.
11. In collaboration with the department of education and other state agencies, assist school districts, charter schools, county free library districts, municipal libraries, nonprofit and public libraries, tribal libraries, private schools and tribal schools on using student data, staff development, curriculum alignment and technology to improve student performance.
12. Assist schools in meeting yearly adequate progress goals as defined by criteria established by the state board of education and implemented by the department of education.
B. At the request of school districts and charter schools, the county school superintendent may provide discretionary programs in addition to the programs prescribed in subsection A of this section.
C. The county school superintendent may provide the services prescribed in subsections A and B of this section in the county or jointly with two or more counties pursuant to title 11, chapter 7, article 3.
D. Each county school superintendent may establish an advisory committee to the office of the county school superintendent.
Sec. 3. Section 15-481, Arizona Revised Statutes, is amended to read:
15-481. Override election; budget increases; eligibility; informational pamphlet; notice; ballot; effect
A. If a proposed budget of a school district exceeds the aggregate budget limit for the budget year, at least ninety days before the proposed election the governing board shall order an override election to be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection F for the purpose of presenting the proposed budget to the qualified electors of the school district who by a majority of those voting either shall affirm or reject the budget. At the same time as the order of the election, the governing board shall publicly declare the deadline for submitting arguments, as set by the county school superintendent pursuant to subsection B, paragraph 9 of this section, to be submitted in the informational pamphlet and shall immediately post the deadline in a prominent location on the district's website. In addition, the governing board shall prepare an alternate budget that does not include an increase in the budget of more than the amount allowed as provided in section 15-905. If the qualified electors approve the proposed budget, the governing board of the school district shall follow the procedures prescribed in section 15-905 for adopting a budget that includes the authorized increase. If the qualified electors disapprove the proposed budget, the governing board shall follow the procedures prescribed in section 15-905 for adopting a budget that does not include the proposed increase or the portion of the proposed increase that exceeds the amount authorized by a previously approved budget increase as prescribed in subsection P Q of this section.
B. The county school superintendent shall prepare an informational pamphlet on the proposed increase in the budget and a sample ballot and, at least forty days before the election, shall transmit the informational pamphlet and the sample ballot to the governing board of the school district. The governing board, on receipt of the informational pamphlet and the ballot, shall mail or distribute the informational pamphlet and the ballot to the households in which qualified electors reside within the school district at least thirty-five days before the election. Any distribution of material concerning the proposed increase in the budget shall not be conducted by children enrolled in the school district. The informational pamphlet shall contain the following information:
1. The date of the election.
2. The voter's polling place and the times it is open.
3. The proposed total increase in the budget that exceeds the amount allowed pursuant to section 15-905.
4. The total amount of the current year's budget, the total amount of the proposed budget and the total amount of the alternate budget.
5. If the override is for a period of more than one year, a statement indicating the number of years the proposed increase in the budget would be in effect and the percentage of the school district's revenue control limit that the district is requesting for the future years.
6. The proposed total amount of revenues that will fund the increase in the budget and the amount that will be obtained from a levy of taxes on the taxable property within the school district for the first year for which the budget increase was adopted.
7. The proposed amount of revenues that will fund the increase in the budget and that will be obtained from other than a levy of taxes on the taxable property within the school district for the first year for which the budget increase was adopted.
8. The dollar amount and the purpose for which the proposed increase in the budget is to be expended for the first year for which the budget increase was adopted. The purpose statement shall only present factual information in a neutral manner. Advocacy for the expenditures is strictly limited to the arguments submitted pursuant to paragraph 9 of this subsection.
9. At least two arguments, if submitted, but not more than ten arguments for and two arguments, if submitted, but not more than ten arguments against the proposed increase in the budget. The arguments shall be in a form prescribed by the county school superintendent, and each argument shall not exceed two hundred words. Arguments for the proposed increase in the budget shall be provided in writing and signed by the governing board. The ballot arguments for the proposed increase in the budget shall be signed as the governing board of the school district without listing any member's individual name for the arguments for the proposed increase. If submitted, additional arguments in favor of the proposed increase in the budget shall be provided in writing with a signed, sworn statement by those in favor. Arguments against the proposed increase in the budget shall be provided in writing with a signed, sworn statement by those in opposition. If the argument is submitted by an organization, it shall contain the sworn statement of two executive officers of the organization. If the argument is submitted by a political committee, it shall contain the sworn statement of the committee's chairperson or treasurer. If the argument is submitted by an individual and not on behalf of an organization, a political committee or any other group, the person individual shall submit the argument with a sworn, notarized statement. The names of persons and entities submitting written arguments shall be included in the informational pamphlet. Persons signing the argument shall identify themselves by giving their residence address and telephone number, which may not appear in the informational pamphlet, except that the person's city or town and state of residence shall appear in the pamphlet. Any argument that is submitted and that does not comply with this paragraph may not be included in the pamphlet. The county school superintendent shall review all factual statements contained in the written arguments and correct any inaccurate statements of fact. The superintendent shall not review and correct any portion of the written arguments that are identified as statements of the author's opinion. The county school superintendent shall make the written arguments available to the public as provided in title 39, chapter 1, article 2. A deadline for submitting arguments to be included in the informational pamphlet shall be set by the county school superintendent.
10. A statement that the alternate budget shall be adopted by the governing board if the proposed budget is not adopted by the qualified electors of the school district.
11. The current limited property value and the net assessed valuation provided by the department of revenue, the first year tax rate for the proposed override and the estimated amount of the secondary property taxes if the proposed budget is adopted for each of the following:
(a) An owner-occupied residence whose assessed valuation is the average assessed valuation of property classified as class three, as prescribed by section 42-12003 for the current year in the school district.
(b) An owner-occupied residence whose assessed valuation is one-half of the assessed valuation of the residence in subdivision (a) of this paragraph.
(c) An owner-occupied residence whose assessed valuation is twice the assessed valuation of the residence in subdivision (a) of this paragraph.
(d) A business whose assessed valuation is the average of the assessed valuation of property classified as class one, as prescribed by section 42-12001, paragraphs 12 and 13 for the current year in the school district.
12. If the election is conducted pursuant to subsection L or M of this section, the following information:
(a) An executive summary of the school district's most recent capital improvement plan submitted to the school facilities oversight board.
(b) A complete list of each proposed capital improvement that will be funded with the budget increase and a description of the proposed cost of each improvement, including a separate aggregation of capital improvements for administrative purposes as defined by the school facilities oversight board.
(c) The tax rate associated with each of the proposed capital improvements and the estimated cost of each capital improvement for the owner of a single family home that is valued at $80,000.
C. For the purpose of this section, the school district may use its staff, equipment, materials, buildings or other resources only to distribute the informational pamphlet at the school district office or at public hearings and to produce such information as required in subsection B of this section. This subsection does not preclude school districts from holding or participating in any public hearings at which testimony is given by at least one person for the proposed increase and one person against the proposed increase. Any written information provided by the district pertaining to the override election shall include financial information showing the estimated first year tax rate for the proposed budget override amount.
D. If any amount of the proposed increase will be funded by a levy of taxes in the district, the election prescribed in subsection A of this section shall be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection F. If the proposed increase will be fully funded by revenues from other than a levy of taxes, the elections prescribed in subsection A of this section shall be held on any date prescribed by section 16-204. The elections shall be conducted as nearly as practicable in the manner prescribed in article 1 of this chapter, sections 15-422, through 15-423, 15-424 and section 15-426, relating to special elections, except that:
1. The notices required pursuant to section 15-403 shall be posted not less than twenty-five days before the election.
2. Ballots shall be counted pursuant to title 16, chapter 4, article 10.
E. If the election is to exceed the revenue control limit and if the proposed increase will be fully funded by a levy of taxes on the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice. The ballot shall also contain the amount of the proposed increase of the proposed budget over the alternate budget, a statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, if applicable, as provided in subsection P Q of this section and the following statement:
Any budget increase authorized by this election shall be entirely funded by a levy of taxes on the taxable property within this school district for the year for which adopted and for ____ subsequent years, shall not be realized from monies furnished by the state and shall not be subject to the limitation on taxes specified in article IX, section 18, Constitution of Arizona. Based on the current net assessed valuation used for secondary property tax purposes, to fund the proposed increase in the school district's budget would require an estimated tax rate of $_____________ per $100 of net assessed valuation used for secondary property tax purposes and is in addition to the school district's tax rate that will be levied to fund the school district's revenue control limit allowed by law.
F. If the election is to exceed the revenue control limit and if the proposed increase will be fully funded by revenues from other than a levy of taxes on the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice. The ballot shall also contain:
1. The amount of the proposed increase of the proposed budget over the alternate budget.
2. A statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, if applicable, as provided in subsection P Q of this section.
3. The following statement:
Any budget increase authorized by this election shall be entirely funded by this school district with revenues from other than a levy of taxes on the taxable property within the school district for the year for which adopted and for ______ subsequent years and shall not be realized from monies furnished by the state.
G. Except as provided in subsection H of this section, the maximum budget increase that may be requested and authorized as provided in subsection E or F of this section or the combination of subsections E and F of this section is fifteen percent of the revenue control limit as provided in section 15-947, subsection A for the budget year. If a school district requests an override pursuant to section 15-482 or to continue with a budget override pursuant to section 15-482 for pupils in kindergarten programs and grades one through three that was authorized before December 31, 2008, the maximum budget increase that may be requested and authorized as provided in subsection E or F of this section or the combination of subsections E and F of this section is ten percent of the revenue control limit as provided in section 15-947, subsection A for the budget year.
H. Special budget override provisions for school districts with a student count of less than one hundred fifty-four in kindergarten programs and grades one through eight or with a student count of less than one hundred seventy-six in grades nine through twelve are as follows:
1. The maximum budget increase that may be requested and authorized as provided in subsections E and F of this section is the greater of the amount prescribed in subsection G of this section or a limit computed as follows:
(a) For common or unified districts with a student count of less than one hundred fifty-four in kindergarten programs and grades one through eight, the limit computed as prescribed in item (i) or (ii) of this subdivision, whichever is appropriate:
(i)
Small School Support Level Weight Phase Down
Student Student for Small Isolated Reduction
Count Count Limit School Districts Base Level Factor
— 125 x 1.358 + (0.0005 x x $ = $
(500 — Student Count))
Small Isolated
Phase Down Phase Down School District
Base Reduction Factor Elementary Limit
$150,000 - $ = $
(ii)
Small School Support Level Weight Phase Down
Student Student for Small Reduction
Count Count Limit School Districts Base Level Factor
— 125 x 1.278 + (0.0003 x x $ = $
(500 - Student Count))
Small
Phase Down Phase Down School District
Base Reduction Factor Elementary Limit
$150,000 — $ = $
(b) For unified or union high school districts with a student count of less than one hundred seventy-six in grades nine through twelve, the limit computed as prescribed in item (i) or (ii) of this subdivision, whichever is appropriate:
(i)
Small School Support Level Weight Phase Down
Student Student for Small Isolated Reduction
Count Count Limit School Districts Base Level Factor
— 100 x 1.468 + (0.0005 x x $ = $ __
(500 — Student Count))
Small Isolated
Phase Down Phase Down District
Base Reduction Factor Secondary Limit
$350,000 — $ = $
(ii)
Small School Support Level Weight Phase Down
Student Student for Small Reduction
Count Count Limit School Districts Base Level_ Factor
— 100 x 1.398 + (0.0004 x x $ = $
(500 - Student Count))
Small
Phase Down Phase Down School District
Base Reduction Factor Secondary Limit
$350,000 — $ = $
(c) If both subdivisions (a) and (b) of this paragraph apply to a unified school district, its limit for the purposes of this paragraph is the combination of its elementary limit and its secondary limit.
(d) If only subdivision (a) or (b) of this paragraph applies to a unified school district, the district's limit for the purposes of this paragraph is the sum of the limit computed as provided in subdivision (a) or (b) of this paragraph plus ten percent of the revenue control limit attributable to those grade levels that do not meet the eligibility requirements of this subsection. If a school district budgets monies outside the revenue control limit pursuant to section 15-949, subsection E, the district's limit for the purposes of this paragraph is only the ten percent of the revenue control limit attributable to those grade levels that are not included under section 15-949, subsection E. For the purposes of this subdivision, the revenue control limit is separated into elementary and secondary components based on the weighted student count as provided in section 15-971, subsection B, paragraph 2, subdivision (a).
2. If a school district utilizes this subsection to request an override of more than one year, the ballot shall include an estimate of the amount of the proposed increase in the future years in place of the statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, as prescribed in subsections E and F of this section.
3. Notwithstanding subsection P Q of this section, the maximum period of an override authorized pursuant to this subsection is five years.
4. Subsection P Q, paragraphs 1 and 2 of this section do not apply to overrides authorized pursuant to this subsection.
I. If the election is to exceed the revenue control limit as provided in section 15-482 and if the proposed increase will be fully funded by a levy of taxes on the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice. The ballot shall also contain the amount of the proposed increase of the budget over the alternate budget, a statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, if applicable, as provided in subsection Q R of this section, and the following statement:
Any budget increase authorized by this election shall be entirely funded by a levy of taxes on the taxable property within this school district for the year for which adopted and for _____ subsequent years, shall not be realized from monies furnished by the state and shall not be subject to the limitation on taxes specified in article IX, section 18, Constitution of Arizona. Based on the current net assessed valuation used for secondary property tax purposes, to fund the proposed increase in the school district's budget that will be funded by a levy of taxes on the taxable property within this school district would require an estimated tax rate of $__________ per $100 of net assessed valuation used for secondary property tax purposes and is in addition to the school district's tax rate that will be levied to fund the school district's revenue control limit allowed by law.
J. If the election is to exceed the revenue control limit as provided in section 15-482 and if the proposed increase will be fully funded by revenues other than a levy of taxes on the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice. The ballot shall also contain the amount of the proposed increase of the proposed budget over the alternate budget, a statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, if applicable, as provided in subsection Q R of this section and the following statement:
Any budget increase authorized by this election shall be entirely funded by this school district with revenues from other than a levy of taxes on the taxable property within the school district for the year for which adopted and for _____ subsequent years and shall not be realized from monies furnished by the state.
K. The maximum budget increase that may be requested and authorized as provided in subsection I or J of this section, or a combination of both of these subsections, is five percent of the revenue control limit as provided in section 15-947, subsection A for the budget year. For a common school district not within a high school district or a common school district within a high school district that offers instruction in high school subjects as provided in section 15-447, five percent of the revenue control limit means five percent of the revenue control limit attributable to the weighted student count in preschool programs for children with disabilities, kindergarten programs and grades one through eight as provided in section 15-971, subsection B. For a unified school district, five percent of the revenue control limit means five percent of the revenue control limit attributable to the weighted student count in preschool programs for children with disabilities, kindergarten programs and grades one through twelve. For a union high school district, five percent of the revenue control limit means five percent of the revenue control limit attributable to the weighted student count in grades nine through twelve.
L. If the election is to exceed district additional assistance and if the proposed increase will be fully funded by a levy of taxes on the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice. An election held pursuant to this subsection shall be held on the first Tuesday after the first Monday of November. The ballot shall also contain the amount of the proposed increase of the proposed budget over the alternate budget and the following statement:
Any budget increase authorized by this election shall be entirely funded by a levy of taxes on the taxable property within this school district for the year in which adopted and for _____ subsequent years, shall not be realized from monies furnished by the state and shall not be subject to the limitation on taxes specified in article IX, section 18, Constitution of Arizona. Based on the current net assessed valuation used for secondary property tax purposes, to fund the proposed increase in the school district's budget would require an estimated tax rate of $____________ per $100 of net assessed valuation used for secondary property tax purposes and is in addition to the school district's tax rate that will be levied to fund the school district's district additional assistance allowed by law.
M. If the election is to exceed district additional assistance and if the proposed increase will be fully funded by revenues from other than a levy of taxes on the taxable property within the school district, the ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice. An election held pursuant to this subsection shall be held on the first Tuesday after the first Monday of November. The ballot shall also contain the amount of the proposed increase of the proposed budget over the alternate budget and the following statement:
Any budget increase authorized by this election shall be entirely funded by this school district with revenues from other than a levy of taxes on the taxable property within the school district for the year in which adopted and for ______ subsequent years and shall not be realized from monies furnished by the state.
N. If the election is to exceed a combination of the revenue control limit as provided in subsection E or F of this section, the revenue control limit as provided in subsection I or J of this section or district additional assistance as provided in subsection L or M of this section, the ballot shall be prepared so that the voters may vote on each proposed increase separately and shall contain statements required in the same manner as if each proposed increase were submitted separately.
O. If a school district fails to correct a deficiency within ninety days after receiving notice from the auditor general pursuant to section 15-271, the school district governing board may not order an override election as provided in subsection L or M of this section until the school district has corrected any deficiencies and complied with the uniform system of financial records for at least twelve months. For the purposes of this subsection, the school district has corrected any deficiencies from and after the date that the auditor general reports that the school district is in compliance with the uniform system of financial records.
O. P. If the election provides for a levy of taxes on the taxable property within the school district, at least thirty days before the election, the department of revenue shall provide the school district governing board and the county school superintendent with the current net assessed valuation of the school district. The governing board and the county school superintendent shall use the current net assessed valuation of the school district to translate the amount of the proposed dollar increase in the budget of the school district over that allowed by law into a tax rate figure.
P. Q. If the voters in a school district vote to adopt a budget in excess of the revenue control limit as provided in subsection E or F of this section, any additional increase shall be included in the aggregate budget limit for each of the years authorized. Any additional increase shall be excluded from the determination of equalization assistance. The school district governing board, however, may levy on the net assessed valuation used for secondary property tax purposes of the property in the school district the additional increase if adopted under subsection E of this section for the period of one year, two years or five through seven years as authorized. If an additional increase is approved as provided in subsection F of this section, the school district governing board may only use revenues derived from the school district's prior year's maintenance and operation fund ending cash balance to fund the additional increase. If a budget increase was previously authorized and will be in effect for the budget year or budget year and subsequent years, as provided in subsection E or F of this section, the governing board may request a new budget increase as provided in the same subsection under which the prior budget increase was adopted, which shall not exceed the maximum amount allowed under subsection G of this section. If the voters in the school district authorize the new budget increase amount, the existing budget increase no longer is in effect. If the voters in the school district do not authorize the budget increase amount, the existing budget increase remains in effect for the time period for which it was authorized. The maximum additional increase authorized as provided in subsection E or F of this section and the additional increase that is included in the aggregate budget limit is based on a percentage of a school district's revenue control limit in future years, if the budget increase is authorized for more than one year. If the additional increase:
1. Is for two years, the proposed increase in the second year is equal to the initial proposed percentage increase.
2. Is for five years or more, the proposed increase is equal to the initial proposed percentage increase in the following years of the proposed increase, except that in the next to last year it is two-thirds of the initial proposed percentage increase and it is one-third of the initial proposed percentage increase in the last year of the proposed increase.
Q. R. If the voters in a school district vote to adopt a budget in excess of the revenue control limit as provided in subsection I or J of this section, any additional increase shall be included in the aggregate budget limit for each of the years authorized. Any additional increase shall be excluded from the determination of equalization assistance. The school district governing board, however, may levy on the net assessed valuation used for secondary property tax purposes of the property in the school district the additional increase if adopted under subsection I of this section for the period of one year, two years or five through seven years as authorized. If an additional increase is approved as provided in subsection J of this section, the increase may only be budgeted and expended if sufficient monies are available in the maintenance and operation fund of the school district. If a budget increase was previously authorized and will be in effect for the budget year or budget year and subsequent years, as provided in subsection I or J of this section, the governing board may request a new budget increase as provided in the same subsection under which the prior budget increase was adopted that does not exceed the maximum amount permitted under subsection K of this section. If the voters in the school district authorize the new budget increase amount, the existing budget increase no longer is in effect. If the voters in the school district do not authorize the budget increase amount, the existing budget increase remains in effect for the time period for which it was authorized. The maximum additional increase authorized as provided in subsection I or J of this section and the additional increase that is included in the aggregate budget limit is based on a percentage of a school district's revenue control limit in future years, if the budget increase is authorized for more than one year. If the additional increase:
1. Is for two years, the proposed increase in the second year is equal to the initial proposed percentage increase.
2. Is for five years or more, the proposed increase is equal to the initial proposed percentage increase in the following years of the proposed increase, except that in the next to last year it is two-thirds of the initial proposed percentage increase and it is one-third of the initial proposed percentage increase in the last year of the proposed increase.
R. S. If the voters in a school district vote to adopt a budget in excess of district additional assistance as provided in subsection L of this section, any additional increase shall be included in the aggregate budget limit for each of the years authorized. The additional increase shall be excluded from the determination of equalization assistance. The school district governing board, however, may levy on the net assessed valuation used for secondary property tax purposes of the property in the school district the additional increase for the period authorized but not to exceed ten years. For overrides approved by a vote of the qualified electors of the school district at an election held from and after October 31, 1998, the period of the additional increase prescribed in this subsection shall not exceed seven years for any capital override election.
S. T. If the voters in a school district vote to adopt a budget in excess of district additional assistance as provided in subsection M of this section, any additional increase shall be included in the aggregate budget limit for each of the years authorized. The additional increase shall be excluded from the determination of equalization assistance. The school district governing board may only use revenues derived from the school district's prior year's maintenance and operation fund ending cash balance and capital outlay fund ending cash balance to fund the additional increase for the period authorized but not to exceed ten years. For overrides approved by a vote of the qualified electors of the school district at an election held from and after October 31, 1998, the period of the additional increase prescribed in this subsection shall not exceed seven years for any capital override election.
T. U. In addition to subsections P Q and S T of this section, from the maintenance and operation fund and capital outlay fund ending cash balances, the school district governing board shall first use any available revenues to reduce its primary tax rate to zero and shall use any remaining revenues to fund the additional increase authorized as provided in subsections F and M of this section.
U. V. If the voters in a school district disapprove the proposed budget, the alternate budget that, except for any budget increase authorized by a prior election, does not include an increase in the budget in excess of the amount provided in section 15-905 shall be adopted by the governing board as provided in section 15-905.
V. W. The governing board may request that any override election be cancelled if any change in chapter 9 of this title changes the amount of the aggregate budget limit as provided in section 15-905. The request to cancel the override election shall be made to the county school superintendent at least eighty days before the date of the scheduled override election.
W. X. For any election conducted pursuant to subsection L or M of this section:
1. The ballot shall include the following statement in addition to any other statement required by this section:
The capital improvements that are proposed to be funded through this override election are to exceed the state standards and are in addition to monies provided by the state.
___________ school district is proposing to increase its budget by $__________ to fund capital improvements over and above those funded by the state. Under the students first capital funding system, _________ school district is entitled to state monies for new construction and renovation of school buildings in accordance with state law.
2. The ballot shall contain the words "budget increase, yes" and "budget increase, no", and the voter shall signify the voter's desired choice.
3. At least eighty-five days before the election, the school district shall submit proposed ballot language to the director of the Arizona legislative council. The director of the Arizona legislative council shall review the proposed ballot language to determine whether the proposed ballot language complies with this section. If the director of the Arizona legislative council determines that the proposed ballot language does not comply with this section, the director, within ten calendar days after receiving the proposed ballot language, shall notify the school district of the director's objections, and the school district shall resubmit revised ballot language to the director for approval.
X. Y. If the voters approve the budget increase pursuant to subsection L or M of this section, the school district shall not use the override proceeds for any purposes other than the proposed capital improvements listed in the informational pamphlet, except that up to ten percent of the override proceeds may be used for general capital expenses, including cost overruns of proposed capital improvements.
Y. Z. Each school district that currently increases its budget pursuant to this section shall hold a public meeting each year between September 1 and October 31 at which an update of the programs or capital improvements financed through the override is discussed and at which the public is allowed an opportunity to comment and:
1. If the increase is pursuant to subsection L or M of this section, at a minimum, the update shall include the progress of capital improvements financed through the override, a comparison of the current status and the original projections on the construction of capital improvements, the costs of capital improvements and the costs of capital improvements in progress or completed since the prior meeting and the future capital plans of the school district. The school district shall include in the public meeting a discussion of the school district's use of state capital aid and voter-approved bonding in funding capital improvements, if any.
2. If the increase is pursuant to subsection E, F, I or J of this section, the update shall include at a minimum the amount expended in the previous fiscal year and the amount included in the current budget for each of the purposes listed in the informational pamphlet prescribed by subsection B of this section.
Z. AA. Subject to the requirements prescribed by subsection O of this section, if a budget in excess of district additional assistance was previously adopted by the voters in a school district and will be in effect for the budget year or budget year and subsequent years, as provided in subsection L or M of this section, the governing board may request an additional budget in excess of district additional assistance. If the voters in a school district authorize the additional budget in excess of district additional assistance, the existing district additional assistance budget increase remains in effect.
AA. BB. Notwithstanding any other law, the maximum budget increase that may be authorized pursuant to subsection L or M of this section is ten percent of the school district's revenue control limit.
BB. CC. If the election is to continue to exceed the revenue control limit and if the proposed override will be fully funded by a continuation of a levy of taxes on the taxable property in the school district, the ballot shall contain the words "budget override continuation, yes" and "budget override continuation, no", and the voter shall signify the voter's desired choice. The ballot shall also contain the amount of the proposed continuation of the budget increase of the proposed budget over the alternate budget, a statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, if applicable, as provided in subsection P Q of this section and the following statement:
Any budget increase continuation authorized by this election shall be entirely funded by a levy of taxes on the taxable property in this school district for the year for which adopted and for _______ subsequent years, shall not be realized from monies furnished by the state and shall not be subject to the limitation on taxes specified in article IX, section 18, Constitution of Arizona. Based on the current net assessed valuation used for secondary property tax purposes, to fund the proposed continuation of the increase in the school district's budget would require an estimated continuation of a tax rate of $______________ per $100 of assessed valuation used for secondary property tax purposes and is in addition to the school district's tax rate that will be levied to fund the school district's revenue control limit allowed by law.
CC. DD. If the election is to continue to exceed the revenue control limit as provided in section 15-482 and if the proposed override will be fully funded by a continuation of a levy of taxes on the taxable property in the school district, the ballot shall contain the words "budget override continuation, yes" and "budget override continuation, no", and the voter shall signify the voter's desired choice. The ballot shall also contain the amount of the proposed continuation of the budget increase of the proposed budget over the alternate budget, a statement that the amount of the proposed increase will be based on a percentage of the school district's revenue control limit in future years, if applicable, as provided in subsection P Q of this section and the following statement:
Any budget increase continuation authorized by this election shall be entirely funded by a levy of taxes on the taxable property in this school district for the year for which adopted and for ______ subsequent years, shall not be realized from monies furnished by the state and shall not be subject to the limitation on taxes specified in article IX, section 18, Constitution of Arizona. Based on the current net assessed valuation used for secondary property tax purposes, to fund the proposed continuation of the increase in the school district's budget would require an estimated continuation of a tax rate of $______________ per $100 of net assessed valuation used for secondary property tax purposes and is in addition to the school district's tax rate that will be levied to fund the school district's revenue control limit allowed by law.
Sec. 4. Section 15-491, Arizona Revised Statutes, is amended to read:
15-491. Elections on school property; exceptions
A. The governing board of a school district may, and on petition of fifteen percent of the school electors as shown by the poll list at the last preceding annual school election shall, call an election for the following purposes:
1. To locate or change the location of school buildings.
2. To purchase or sell school sites or buildings or sell school sites pursuant to section 15-342 or to build school buildings, but the authorization by vote of the school district shall not necessarily specify the site to be purchased.
3. To decide whether the bonds of the school district shall be issued and sold for the purpose of raising monies for purchasing or leasing school lots, for building or renovating school buildings, for supplying school buildings with furniture, equipment and technology, for improving school grounds, for purchasing pupil transportation vehicles or for liquidating any indebtedness already incurred for such purposes. Bonds issued for furniture, equipment and technology, other than fixtures, shall mature not later than the July 1 that follows the fifth year after the bonds were issued. A school district shall not issue class B bonds until the school district has obligated in contract the entire proceeds of any class A bonds issued by the school district. The total amount of class A and class B bonds issued by a school district shall not exceed the debt limitations prescribed in article IX, sections 8 and 8.1, Constitution of Arizona.
4. To lease for twenty or more years, as lessor or as lessee, school buildings or grounds. Approval by a majority of the school district electors voting authorizes the governing board to negotiate for and enter into a lease. The ballot shall list the school buildings or grounds for which a lease is sought. If the governing board does not enter into a lease of twenty or more years of the school buildings or grounds listed on the ballot within twenty years after the date of the election and the board continues to seek such a lease, the governing board shall call a special election to reauthorize the board to negotiate for and to enter into a lease of twenty or more years.
5. To change the list of capital projects or the purposes authorized by prior voter approval to issue bonds.
6. To extend from six to ten years the time period to issue class B bonds authorized in 2009 or earlier. Elections pursuant to this paragraph may not be held later than the sixth November after the election approving the issuance of the bonds.
B. A petition is not required for holding the first election to be held in a joint common school district for any of the purposes specified in subsection A of this section. The certification of election results required by section 15-493 shall be made to the board of supervisors of the jurisdictional county.
C. When the election is called to determine whether or not bonds of the school district shall be issued and sold for the purposes enumerated in the call for the election, the question shall be submitted to the vote of the qualified electors of the school district as defined in section 15-401 and subject to section 15-402.
D. The governing board shall order the election to be held and the election notice and procedures to be conducted in the manner prescribed in title 35, chapter 3, article 3. If a petition for an election has been filed with the governing board as provided in subsection A of this section, the board shall act on the petition within sixty days by ordering the election to be held as provided in this subsection. If a school district bond election is scheduled for the same date a school district will hold an override election, the governing body shall deliver a copy of the notice of election and ballot to the county school superintendent who shall include the notice of election and ballot with the informational pamphlet and ballot prepared for the override election. Mailing of the information required for both the override and bond elections shall constitute compliance with the notice provisions of this section.
E. The elections to be held pursuant to this section shall only be held on dates prescribed by section 16-204, except that elections held pursuant to this section to decide whether class B bonds shall be issued, or any other obligation incurred that will require the assessment of secondary property taxes, shall only be held on the first Tuesday after the first Monday of November.
F. Subsection A, paragraph 2 of this section does not apply to the sale of school property if the market value of the school property is less than $50,000.
G. Bond counsel fees, financial advisory fees, printing costs and paying agent and registrar fees for bonds issued pursuant to an election under this section shall be paid from either the amount authorized by the qualified electors of the school district or current operating funds. Bond election expenses shall be paid from current operating funds only.
H. For any election conducted to decide whether class B bonds will be issued pursuant to this section:
1. Except as provided in paragraph 2 of this subsection, the ballot shall include the following statement:
The capital improvements that are proposed to be funded through this bond issuance are to exceed the state standards and are in addition to monies provided by the state.
__________ school district is proposing to issue class B general obligation bonds totaling $__________ to fund capital improvements over and above those funded by the state. Under the students first capital funding system, _________ school district is entitled to state monies for new construction and renovation of school buildings in accordance with state law.
2. For a school district that is a career technical education district, the ballot shall include the following statement:
________, a career technical education district, is proposing to issue class B general obligation bonds totaling $_________ to fund capital improvements at a campus owned or operated and maintained by the career technical education district.
3. The ballot shall conform to the requirements of title 35, chapter 3, article 3.
4. At least eighty-five days before the election, the school district shall submit proposed ballot language to the county school superintendent and the director of the Arizona legislative council. The director of the Arizona legislative council shall review the proposed ballot language to determine whether the proposed ballot language complies with this section. If the director of the Arizona legislative council determines that the proposed ballot language does not comply with this section, the director, within ten calendar days after receiving the proposed ballot language, shall notify the school district and the county school superintendent of the director's objections, and the school district shall resubmit revised ballot language to the director for approval.
5. Not later than thirty-five days before a class B bond election conducted pursuant to this section, the school district shall mail an informational pamphlet prepared by the county school superintendent to each household that contains a qualified elector in the school district. The informational pamphlet shall contain, at a minimum, the following information:
(a) An executive summary of the school district's most recent capital plan submitted to the school facilities oversight board.
(b) A complete list of each proposed capital improvement that will be funded with the proceeds of the bonds and a description of the proposed cost of each improvement, including a separate aggregation of capital improvements for administrative purposes as defined by the school facilities oversight board.
(c) The tax rate associated with each of the proposed capital improvements and the estimated cost of each capital improvement for the owner of a single family home that is valued at $100,000.
I. For any election conducted to decide whether impact aid revenue bonds shall be issued pursuant to this section:
1. The ballot shall include the following statement:
The capital improvements that are proposed to be funded through this bond issuance are to exceed the state standards and are in addition to monies provided by the state.
__________ school district is proposing to issue impact aid revenue bonds totaling $__________ to fund capital improvements over and above those funded by the state. Under the students first capital funding system, _________ school district is entitled to state monies for new construction and renovation of school buildings in accordance with state law.
2. The ballot shall contain the words "bond approval, yes" and "bond approval, no", and the voter shall signify the voter's desired choice.
3. At least eighty-five days before the election, the school district shall submit proposed ballot language to the director of the legislative council. The director of the legislative council shall review the proposed ballot language to determine whether the proposed ballot language complies with this section. If the director of the legislative council determines that the proposed ballot language does not comply with this section, the director, within ten calendar days after receiving the proposed ballot language, shall notify the school district of the director's objections, and the school district shall resubmit revised ballot language to the director for approval.
4. Not later than thirty-five days before an impact aid revenue bond election conducted pursuant to this section, the school district shall mail an informational pamphlet prepared by the county school superintendent to each household that contains a qualified elector in the school district. The informational pamphlet shall contain, at a minimum, the following information:
(a) The date of the election.
(b) The voter's polling place and the times it is open.
(c) An executive summary of the school district's most recent capital plan submitted to the school facilities oversight board.
(d) A complete list of each proposed capital improvement that will be funded with the proceeds of the bonds and a description of the proposed cost of each improvement, including a separate aggregation of capital improvements for administrative purposes as defined by the school facilities oversight board.
(e) A statement that impact aid revenue bonds will be fully funded by aid that the school district receives from the federal government and do not require a levy of taxes in the district.
(f) A statement that if the bonds are approved, the first priority for the impact aid will be to pay the debt service for the bonds and that other uses of the monies are prohibited until the debt service obligation is met.
(g) A statement that if the impact aid revenue bonds are approved, the school district shall not issue or sell class B bonds while the district has existing indebtedness from impact aid revenue bonds, except for bonds issued to refund any bonds issued by the board.
J. If the voters approve the issuance of school district class B bonds or impact aid revenue bonds, the school district shall not use the bond proceeds for any purposes other than the proposed capital improvements listed in the informational pamphlet, except that up to ten percent of the bond proceeds may be used for general capital expenses, including cost overruns of proposed capital improvements. The proposed capital improvements may be changed by a subsequent election as provided by this section.
K. Each school district that issues bonds under this section shall hold a public meeting each year between September 1 and October 31, until the bond proceeds are spent, at which an update of the progress of capital improvements financed through bonding is discussed and at which the public is allowed an opportunity to comment. At a minimum, the update shall include a comparison of the current status and the original projections on the construction of capital improvements, the costs of capital improvements and the costs of capital improvements in progress or completed since the prior meeting and the future capital bonding plans of the school district. The school district shall include in the public meeting a discussion of the school district's use of state capital aid and voter-approved capital overrides in funding capital improvements, if any.
L. If a school district fails to correct a deficiency within ninety days after receiving notice from the auditor general pursuant to section 15-271, the school district governing board may not call an election for the purposes specified in subsection A, paragraph 3 or 5 of this section until the school district has corrected any deficiencies and complied with the uniform system of financial records for at least twelve months. For the purposes of this subsection, the school district has corrected any deficiencies from and after the date that the auditor general reports that the school district is in compliance with the uniform system of financial records.
L. M. If an election is held to change the purpose or list of capital projects authorized by prior voter approval to issue bonds pursuant to subsection A, paragraph 5 of this section, the following requirements apply:
1. The election may be held only on the first Tuesday after the first Monday in November.
2. Not later than thirty-five days before the election, the school district shall mail an informational pamphlet prepared by the county school superintendent to each household in the school district that contains a qualified elector. The informational pamphlet shall contain, at a minimum, the following information:
(a) The date of the election.
(b) The voter's polling place and the times it is open.
(c) A statement as to why the election was called.
(d) A complete list of each proposed capital improvement that is in addition to the initial capital improvements presented in the informational pamphlet when the bonds were approved and the proposed cost of each improvement, including a separate aggregation of capital improvements for administrative purposes as defined by the school facilities oversight board.
(e) A complete list of each capital improvement that was presented in the informational pamphlet when the bonds were initially approved and that is proposed to be eliminated or to have its cost reduced, and the proposed cost of each improvement, including a separate aggregation of capital improvements for administrative purposes as defined by the school facilities oversight board.
(f) Arguments for and against the proposed change, if submitted, as provided by section 15-481, subsection B, paragraph 9. The ballot arguments for the proposed change shall be signed as the governing board of the school district without listing any member's individual name for the arguments for the proposed change.
3. The ballot shall contain the words "change capital improvements, yes" and "change capital improvements, no", and the voter shall signify the voter's desired choice.
4. If the election is to add a purpose that was not on the initial ballot, the ballot shall list the purpose that is proposed to be added.
M. N. If an election is held to extend the time to issue bonds pursuant to subsection A, paragraph 6 of this section, the following requirements apply:
1. The election may be held only on the first Tuesday after the first Monday in November.
2. Not later than thirty-five days before the election, the school district shall mail an informational pamphlet prepared by the county school superintendent to each household in the school district that contains a qualified elector. The informational pamphlet shall contain, at a minimum, the following information:
(a) The date of the election.
(b) The voter's polling place and the times it is open.
(c) A statement as to why the election was called.
(d) Arguments for and against the proposed change, if submitted, as provided in section 15-481, subsection B, paragraph 9. The ballot arguments for the proposed change shall be signed as the governing board of the school district without listing any member's individual name for the arguments for the proposed change.
3. The ballot shall contain the words "extend time to issue bonds, yes" and "extend time to issue bonds, no", and the voter shall signify the voter's desired choice.
Sec. 5. Section 15-747, Arizona Revised Statutes, is amended to read:
15-747. School financial transparency; portal; required information; third-party contractor; fund; exemption
A. Beginning in fiscal year 2021-2022, The department of administration shall develop a transparent and easily accessible school financial transparency portal that includes the following school level school-level data for charter schools, individual schools operated by a school district and school districts:
1. The detailed total revenues generated by weighted student count.
2. The total allocated federal, state and local revenues.
3. The allocation of classroom site fund monies.
4. The amounts allocated for teacher pay and benefits, classroom supplies, student support and other expenditures.
5. A comparison of the funding information for each school in relation to the funding information for other schools in the same local education agency.
6. Any other information that is necessary for a transparent comparison between schools with respect to their revenues, expenditures, student demographics or academic achievement.
B. The department of education and the state board for charter schools shall provide and assist with any necessary data or financial information the department of administration or the contractor selected pursuant to subsection C of this section requests to comply with and implement subsection A of this section. The auditor general may provide assistance related to this section.
C. The department of administration shall contract with a third party to develop the portal prescribed in subsection A of this section. The third party selected by the department must meet all of the following:
1. Have experience in building education finance platforms to show school financial information in a transparent and easily understandable format.
2. Be incorporated for at least five years.
3. Have an exclusive focus on K-12 education finance technology.
4. Have at least five years of experience building cloud-hosted education finance software.
5. Have experience integrating with the uniform system of financial records.
D. The school financial transparency portal fund is established consisting of penalties collected pursuant to section 15-272. The department of education shall administer the fund. Monies in the fund are continuously appropriated and are exempt from the provisions of section 35-190 relating to lapsing of appropriations. The department may use monies in the fund for the costs of the school financial transparency portal that is developed and maintained pursuant to this section, including reimbursing the department of administration for the costs of the contractor selected pursuant to subsection C of this section.
