Bill Text: AZ SB1213 | 2011 | Fiftieth Legislature 1st Regular | Engrossed
Bill Title: Community college districts; alternative formation
Spectrum: Partisan Bill (Republican 4-0)
Status: (Passed) 2011-04-26 - Governor Signed [SB1213 Detail]
Download: Arizona-2011-SB1213-Engrossed.html
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House Engrossed Senate Bill |
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State of Arizona Senate Fiftieth Legislature First Regular Session 2011
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SENATE BILL 1213 |
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AN ACT
amending sections 15‑1401 aND 15‑1402, Arizona Revised Statutes; amending title 15, chapter 12, article 1, Arizona Revised Statutes, by adding section 15‑1402.01; amending sections 15‑1403, 15‑1407, 15‑1409, 15-1468, 15-1472 and 15‑1481, Arizona Revised Statutes; amending section 15‑1851, Arizona Revised Statutes, as amended by Laws 2010, chapter 332, section 24; amending sections 15‑1854 and 42-5029, Arizona Revised Statutes; relating to community colleges.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 15-1401, Arizona Revised Statutes, is amended to read:
15-1401. Definitions
In this chapter, unless the context otherwise requires:
1. "Accredited" means accredited by a regional accrediting agency recognized by the United States department of education or by the council on postsecondary accreditation.
2. "Additional short‑term classes" means those classes which that are not in session on the forty‑fifth day of the fall or spring semester, which that commence at various times during the fiscal year and which that are offered over a period of less than sixteen weeks.
3. "Budget year" means the fiscal year for which the community college district is budgeting and which that immediately follows the current year.
4. "Community college" means an educational institution that is operated by a district board and that provides a program not exceeding two years' training in the arts, sciences and humanities beyond the twelfth grade of the public or private high school course of study or vocational education, including terminal courses of a technical and vocational nature and basic adult education courses.
5. "Current year" means the fiscal year in which the community college district is operating.
6. "District" means a community college district that is established pursuant to sections 15‑1402 and 15‑1403 or section 15-1402.01 and that is a political subdivision of this state and, unless otherwise specified, includes provisional community college districts established pursuant to section 15‑1409.
7. "District board" means the community college district governing board.
8. "Full‑time equivalent student" means student enrollment for fifteen community college semester credit units per semester.
9. "Open entry, open exit classes" means those classes in which students enter or exit based on mastery of specified competencies and which that commence at various times during the fiscal year.
10. "Operational expense budget" means the budget as adopted by the district board pursuant to section 15‑1461.
11. "Operational expenses" means the administration, instruction, operation of community college plant, maintenance of community college plant, fixed charges and contingencies incurred in the operation of a district exclusive of all capital outlay items, special levies, auxiliary enterprise funds, restricted funds and bond service items.
12. "Provisional community college district" means a community college district organized pursuant to section 15‑1409.
Sec. 2. Section 15-1402, Arizona Revised Statutes, is amended to read:
15-1402. Community college districts; requirements; exception
A. Community college districts may be organized under the provisions of this chapter for a single county, two or more contiguous counties or an existing community college district and contiguous counties not part of any community college district if the proposed district has a primary assessed valuation, based on the valuation for the preceding year, of at least four hundred forty‑eight million, seventeen thousand, two hundred dollars and a minimum population of forty thousand persons who are fifteen or more years of age, as determined by the most recent federal census.
B. Beginning with fiscal year 1993‑1994, the minimum primary assessed valuation required to organize a community college district as provided in subsection A of this section increases each year by the percentage change in total primary assessed valuation for all of the districts that are organized pursuant to this section with a population of less than five hundred thousand persons according to the most recent United States decennial census using actual primary assessed valuation numbers from the prior two years.
C. The requirements of this section do not apply to community college districts organized pursuant to section 15-1402.01. END_STATUTE
Sec. 3. Title 15, chapter 12, article 1, Arizona Revised Statutes, is amended by adding section 15-1402.01, to read:
15-1402.01. Alternative requirements for community college districts
A. A county that does not meet the requirements prescribed in section 15‑1402 may organize a community college district under this chapter if all of the following requirements have been met:
1. A provisional community college district has been in operation in that county for at least five years immediately before the formation of the proposed community college district pursuant to this section.
2. The most recent number of full-time equivalent student enrollment calculated pursuant to section 15-1466.01 for the provisional community college district is at least nine hundred.
3. The proposed community college district is actively seeking accreditation from a regional accrediting agency recognized by the United States department of education or by the council on postsecondary accreditation.
4. A member of the public requests, or the governing board schedules, public meetings to discuss and hear testimony on the conversion of the provisional community college district to an independent community college district.
5. At the next regularly scheduled meeting after the meeting prescribed in paragraph 4 of this section, the governing board of the provisional college district adopts a resolution to form a community college district pursuant to this section.
6. Notwithstanding section 42-17056, after the governing board of the provisional community college district adopts a resolution pursuant to paragraph 5 of this section, the governing board may call an election on a general election date of the board's choice to seek voter approval to increase the primary property tax levy for the provisional community college district. If a majority of the qualified electors voting:
(a) Approve the proposed levy amount, the levy applicable for the district for the next tax year shall not exceed the approved amount and the governing board shall not seek voter approval to increase the primary property tax levy in any subsequent year.
(b) Disapprove the proposed levy amount, the district shall levy a primary property tax based on the previously authorized levy.
7. The provisional community college district has maintained a regional accreditation and oversight relationship with another community college district until the conversion of the provisional community college district to an independent community college district.
B. a community college district established pursuant to this section shall maintain a regional accreditation and oversight relationship with another community college district until the district has achieved initial candidacy status from a regional accrediting agency recognized by the United States department of education or by the council on postsecondary accreditation.
Sec. 4. Section 15-1403, Arizona Revised Statutes, is amended to read:
15-1403. Procedure to form a district; exception
A. For the purpose of forming a district, not less than ten per cent of the qualified electors in the territory included in the proposed district, or where a district consists of more than one county not less than ten per cent of the qualified electors in each county, shall petition the county school superintendent for the establishment of the district. Where a district consists of more than one county, the signatures of the qualified electors on the petition shall be submitted to the county school superintendent of the county of which the qualified electors are residents, provided that the county school superintendent of the county with the larger population, as determined by the most recent federal census, shall be the custodian of the completed petition. The petition shall set forth the name of the proposed district and its boundaries. The county school superintendent shall verify the signatures thereon, provided that whenever a proposed district consists of more than one county the county school superintendent of the county with the least population shall verify the signatures on the petition from his that county prior to submitting the petition to the county school superintendent of the county with the larger population.
B. The county school superintendent who is the custodian of the completed petition shall transmit the petition to the county board of supervisors, or if the district consists of more than one county, to the county board of supervisors of the county with the largest population, which shall determine whether the proposed district meets the minimum standards of assessed valuation and population as provided in section 15‑1402.
C. If the county board of supervisors determines that the proposed district meets the minimum standards of assessed valuation and population prescribed in subsection B of this section, the county, or counties, shall call and conduct an election, as prescribed in this article. If the majority of the votes cast in the proposed district, consisting of one county, favors favor the formation of the district, such a district is deemed to be formed, as provided in section 15‑1404. Where the proposed district consists of more than one county, there shall be a majority of the votes cast in each county favoring the formation of the district before the district is deemed to be formed, as provided in section 15‑1404.
D. This section does not apply to community college districts organized pursuant to section 15-1402.01.
Sec. 5. Section 15-1407, Arizona Revised Statutes, is amended to read:
15-1407. Formation of new district by subdivision of existing district; division of assets
A. If two or more contiguous counties have formed a community college district, a new district may be formed in one or more of the counties by dissolution of the existing district if each county in which a new district is formed meets the requirements prescribed in section 15‑1402. Except as provided in this section, the procedures for dissolution of the district shall be as prescribed in section 15‑1403 for the formation of a district in more than one county.
B. The election shall be held as provided in section 15‑1404, except that a majority of the qualified electors in each of the counties in the existing district must approve the dissolution of the existing district and the formation of the new district.
C. If a county is within a community college district which that is dissolved pursuant to this section and the county does not meet the requirements of section 15‑1402 or 15‑1402.01, the county is no longer part of an established community college district.
D. The district board of the existing district shall prepare a projected list of assets for the existing district before the end of the fiscal year in which the election is held. The district boards of the existing district and the new district shall prepare a final statement of assets for the existing district as of the end of the fiscal year in which the election was held. The district boards of the existing district and the new district shall set aside sufficient assets or provide other means to satisfy the liabilities of the existing district and approve the final division of all assets by September 15 of the year in which the new district becomes operative.
Sec. 6. Section 15-1409, Arizona Revised Statutes, is amended to read:
15-1409. Provisional community college districts; formation; governing board; powers and duties; issuance and sale of bonds for capital outlay
A. A provisional community college district shall contract with an existing community college district to provide instructional and student services within the provisional community college district.
B. The minimum assessed valuation and population requirements prescribed in section 15‑1402 do not apply to provisional community college districts.
C. A provisional community college district shall be formed and a provisional community college district governing board shall be elected in the same manner prescribed in sections 15‑1403, 15‑1404 and 15‑1441, except that the county board of supervisors by majority vote may adopt a resolution to submit the question of the formation of a provisional community college district and the approval of a proposed tax rate to fund the provisional community college district directly to the qualified electors of the county at a special or general election called for that purpose as prescribed in section 16‑204 and title 35, chapter 3, article 3. The resolution adopted by the county board of supervisors shall include a statement that the primary property tax levy limit for the provisional community college district shall be no less than the levy limit of the most recently formed community college district in this state.
D. Except as provided in this section, a provisional community college district governing board has the same powers and duties specified in section 15‑1444 for community college districts.
E. A provisional community college district shall not award degrees, certificates or diplomas.
F. A provisional community college district is not eligible to receive equalization aid pursuant to section 15‑1468 or state contribution for capital outlay for initial or additional campuses pursuant to section 15‑1463.
G. The state aid eligibility requirements prescribed in section 15‑1466, subsection G E, paragraphs 1 and 2 do not apply to provisional community college districts.
H. Notwithstanding any other law, the same student shall not be counted twice as a full‑time equivalent student in both a provisional community college district and a community college district. Notwithstanding any other law, beginning with the fiscal year after the year in which the provisional community college district is formed and has established its primary tax rate, a district that provides services in a provisional district pursuant to section 15‑1470 shall no longer count these students in the district's full‑time equivalent student count.
I. If a provisional community college district is converted into a community college district by the formation of a community college district pursuant to section 15‑1402 or 15‑1402.01, the provisional community college district is dissolved and any equipment, property, personnel, liabilities and assets are transferred to the community college district.
J. If a provisional community college district is formed in a county that provides reimbursement for the attendance of nonresident state students pursuant to section 15‑1469, that county shall continue to provide reimbursement payments to community college districts for the remainder of the fiscal year in which the provisional community college district is formed, provided that the county board of supervisors adopts a levy that is at least equal to the sum of the reimbursement payments and the amount of the community college services provided in the fiscal year immediately before the formation of the provisional community college district.
K. The board of supervisors of a county that has formed a provisional community college district by majority vote may enter into an intergovernmental agreement to loan monies to the governing board of the provisional community college district in an amount that does not exceed two hundred thousand dollars. Any loan pursuant to this subsection shall be repaid from the next scheduled collection of property taxes to fund the provisional community college district. The annual interest charges on any loan pursuant to this subsection shall not exceed five per cent.
L. A provisional community college district may issue bonds for capital outlay purposes in the same manner prescribed in section 15‑1465 for community college districts. The governing board of the provisional community college district is solely responsible for determining the encumbrance and approval of the expenditure of the proceeds of the bonds issued pursuant to this subsection and shall not delegate or transfer this authority to any other entity.
Sec. 7. Section 15-1468, Arizona Revised Statutes, is amended to read:
15-1468. Equalization aid for community college districts
A. Subject to legislative appropriation, any district that is organized pursuant to section 15-1402 that has less than the amount of primary assessed valuation prescribed in section 15‑1402 shall be paid by this state an amount equal to the following:
1. The difference between the prior year's actual primary assessed valuation of the district and the amount of primary assessed valuation prescribed in section 15‑1402.
2. The actual prior year's primary property tax rate for the district.
3. The difference determined in paragraph 1 multiplied by the lesser of the tax rate determined in paragraph 2 or one dollar and thirty‑seven cents.
B. The equalization aid provided for in subsection A of this section shall be used for the same purposes specified in section 15‑1462 and shall be apportioned to any qualifying district pursuant to section 15‑1467.
C. This section does not apply to community college districts organized pursuant to section 15-1402.01 or to provisional community college districts as prescribed in section 15‑1409.
Sec. 8. Section 15-1472, Arizona Revised Statutes, is amended to read:
15-1472. Community college district workforce development accounts; reports
A. Each community college district shall establish a separate workforce development account to receive only tax revenues authorized pursuant to section 42‑5029, subsection E, paragraph 3. Each community college district board shall approve the expenditure of these monies in accordance with section 15‑1461 and consistent with subsection B of this section.
B. Monies received pursuant to subsection A of this section shall be expended for workforce development and job training purposes. These expenditures may include:
1. Partnerships with businesses and educational institutions.
2. Additional faculty for improved and expanded classroom instruction and course offerings.
3. Technology, equipment and technology infrastructure for advanced teaching and learning in classrooms or laboratories.
4. Student services such as assessment, advisement and counseling for new and expanded job opportunities.
5. The purchase, lease or lease‑purchase of real property, for new construction, remodeling or repair of buildings or facilities on real property.
C. The state treasurer shall transfer monies under this section into each district's workforce development account by the fifteenth day of each month. The state treasurer shall also allocate and distribute any pooled interest earnings earned from revenues authorized in section 42‑5029, subsection E, paragraph 3 to each district in accordance with the method prescribed in subsection D, paragraph 2 of this section.
D. Revenues authorized for community college districts in section 42‑5029, subsection E, paragraph 3 shall be distributed by the state in the following manner:
1. For thirteen fiscal years beginning in fiscal year 2001‑2002 the state treasurer shall allocate one million dollars per fiscal year for the purpose of bringing this state into compliance with the matching capital requirements prescribed in section 15‑1463. The state treasurer shall distribute the monies authorized in this subsection to each district in the order in which each campus qualified for funding pursuant to section 15‑1463.
2. After the monies have been paid each year to the eligible district DISTRICTS pursuant to paragraph 1 of this subsection, the state treasurer shall distribute monies from the workforce development fund to each community college district in the following manner:
(a) Each district shall receive the sum of two hundred thousand dollars.
(b) After each district has received the payments prescribed in subdivision (a), the remainder of monies in the fund shall be distributed to each district according to each district's full‑time equivalent student enrollment percentage of the total state wide statewide audited full‑time equivalent student enrollment in the preceding fiscal year prescribed in section 15‑1466.01. The percentage distribution under this subdivision shall be adjusted annually on October 1 of each year. For the purposes of this subdivision, the following distribution procedures apply:
(i) If a community college district established pursuant to section 15-1402.01 contracts with another community college district pursuant to section 15-1402.01, subsection B, the full-time equivalent student enrollment of that district shall be added to the full-time equivalent student enrollment of the other community college district that contracts with that district pursuant to section 15-1402.01, subsection B, and that portion of the monies distributed under this subdivision to the other community college district shall be used to provide services to students enrolled in the community college district established pursuant to section 15-1402.01 as approved by that district’s governing board as part of the annual budget process pursuant to section 15-1461.
(ii) If a community college district established pursuant to section 15-1402.01 is no longer required to contract with another community college district pursuant to section 15-1402.01, subsection B, that community college district shall receive monies as provided in this subdivision according to its full-time equivalent student enrollment.
E. Revenues received by community college districts shall not be used by the legislature to supplant or reduce any state aid authorized in this chapter or supplant any proceeds from the sale of bonds authorized in this article and article 5 of this chapter.
F. Monies received under this section shall not be considered to be local revenues for purposes of article IX, section 21, Constitution of Arizona.
G. Each community college district shall submit a workforce development plan by April 1 of each year to the department of commerce. The plan shall outline the purpose and goals for which workforce development monies are to be expended by the district.
H. Each community college district or community college that is owned, operated or chartered by a qualifying Indian tribe on its own Indian reservation shall submit a report once every two years of its workforce development plan activities and the expenditures authorized in this section to the governor, president of the senate, speaker of the house of representatives, joint legislative budget committee and department of commerce by December 1 of every even‑numbered year. The report shall include the purpose and goals for which the workforce development monies were expended by each district or community college together with a general accounting of the expenditures authorized in subsection B of this section. A copy of the final report shall also be provided to the secretary of state and the director of the Arizona state library, archives and public records. For the purposes of this subsection, "qualifying Indian tribe" has the same meaning prescribed in section 42‑5031.01.
Sec. 9. Section 15-1481, Arizona Revised Statutes, is amended to read:
15-1481. Definitions
In this article, unless the context otherwise requires:
1. "Acquire" includes purchase, erect, build, construct, reconstruct, repair, replace, extend, better, furnish, equip, develop, improve and embellish.
2. "Board" means the governing board of a community college district or its successors, but does not include provisional community college districts as prescribed in section 15‑1409.
3. "Bonds" means any bonds issued pursuant to this article.
4. "Federal agency" means the housing and home finance agency, the United States of America or any of its officers or agencies designated or created to make grants or loans of monies for public construction work.
5. "Institution" means any community college district that is organized in this state pursuant to section 15‑1402 or 15‑1402.01, but does not include provisional community college districts as prescribed in section 15‑1409.
6. "Project" means one or more classrooms, student or faculty residence halls, dormitories, dining halls, student union buildings, field houses, stadia and other revenue producing buildings located at the institution, together with sites for the buildings, and including includes equipment, furnishings, heating, lighting and other service facilities in connection with the buildings.
Sec. 10. Section 15-1851, Arizona Revised Statutes, as amended by Laws 2010, chapter 332, section 24, is amended to read:
15-1851. Commission for postsecondary education; purpose; report; members; terms; powers and duties; compensation; quorum; immunity; definition
A. The commission for postsecondary education is established and shall administer the applicable programs identified under section 1203 of the higher education act amendments of 1998 (P.L. 105‑244), including the leveraging educational assistance partnership program, the federal family education loan program and the Paul Douglas teacher scholarships program, and shall supervise the state guarantee agency under the higher education act amendments of 1998.
B. In addition to the responsibilities prescribed in subsection A of this section, the commission shall:
1. Provide a forum to public and private postsecondary education institutions for discussion of issues of mutual interest, including the following:
(a) The postsecondary needs of unserved and underserved individuals in this state.
(b) The resources of public and private institutions, organizations and agencies that are located in this state and that are capable of providing postsecondary education opportunities.
(c) Enrollment demand and public policy options to meet statewide needs for postsecondary education services.
(d) Cooperative comprehensive instructional and capital planning.
2. Provide reports pursuant to this subsection on discussions of issues of mutual interest.
3. Coordinate and promote collaborative studies on issues of mutual interest to public and private postsecondary education institutions.
4. Compile and disseminate information to the public regarding postsecondary education opportunities in this state.
5. Prepare an annual report that summarizes the results of the commission's activities prescribed in this section and section 15‑1852. The annual report shall be submitted to the speaker of the house of representatives, the president of the senate, the governor and the Arizona state library, archives and public records by December 28.
6. Administer the mathematics, science and special education teacher student loan program established by chapter 13, article 11 of this title.
C. The commission consists of the executive director of the Arizona board of regents, the executive director of the state board for private postsecondary education and the following additional members who shall be appointed by the governor pursuant to section 38‑211:
1. Two members who hold senior executive or managerial positions in a university under the jurisdiction of the Arizona board of regents.
2. Two members who hold senior executive or managerial positions in a community college district, one representing a community college district in a county with a population of five hundred thousand persons or more and one representing a community college district in a county with a population of less than five hundred thousand persons.
3. Two members who hold senior executive or managerial positions in private postsecondary institutions of higher education that are licensed under title 32, chapter 30, that are located in this state, that offer bachelor or higher degrees and that are accredited by a regional accreditation agency approved by the United States department of education.
4. Two members who hold senior executive or managerial positions in private postsecondary institutions of higher education that are licensed under title 32, chapter 30, that are located in this state, that offer vocational education programs and that are accredited by a national accreditation agency approved by the United States department of education.
5. One member who holds a senior executive or managerial position in a private cosmetology school that is licensed under title 32, chapter 5, that is located in this state, that offers cosmetology programs approved by the board of cosmetology and that is accredited by a national accreditation agency approved by the United States department of education.
6. One member who holds a senior executive or managerial position in an institution that is licensed under title 32, chapter 23 or under 14 Code of Federal Regulations part 147, that offers vocational education programs at the postsecondary level, that is located in this state and that is not an institution that is qualified under any other category.
7. One member who has held a senior executive or managerial level position in commerce or industry in this state for at least three years before the member's appointment and who is not qualified to serve under any other category.
8. Two members who hold senior executive or managerial positions in the high school education system in this state.
9. One member who is an owner, operator or administrator of a charter school in this state.
D. Members of the commission appointed pursuant to subsection C, paragraphs 1 through 9 of this section shall serve four year terms. Appointed members of the commission shall be residents of this state. Appointed members of the commission at all times during their terms shall continue to be eligible for appointment under the category that they were appointed to represent. Terms of appointed members of the commission begin on the third Monday in January. No appointed member of the commission may serve more than two consecutive terms.
E. The executive director of the Arizona board of regents and the executive director of the state board for private postsecondary education serve as members of the commission during their respective terms of office and are not eligible to vote with respect to the commission's review of any postsecondary institution.
F. Members appointed pursuant to subsection C, paragraphs 1 through 9 of this section are eligible to receive compensation pursuant to section 38‑611 for each day spent in the performance of commission duties and may be reimbursed for expenses properly incurred in connection with the attendance at meetings or hearings of the commission.
G. The governor shall appoint a chairman from among the members of the commission who shall serve a one year term that begins on the third Monday in January.
H. A majority of the members of the commission constitute a quorum for the transaction of commission business. The vote of a majority of the quorum constitutes authority for the commission to act.
I. Members of the commission are immune from personal liability with respect to all actions that are taken in good faith and within the scope of the commission's authority.
J. For the purposes of this section, "community college district" means a community college district that is established pursuant to sections 15‑1402 and 15‑1403 or section 15‑1402.01 and that is a political subdivision of this state.
Sec. 11. Section 15-1854, Arizona Revised Statutes, is amended to read:
15-1854. Private postsecondary education student financial assistance program; fund; definition
A. A private postsecondary education student financial assistance program is established. The commission shall develop, implement and administer the program. A student who obtains an associate degree from a community college district or from a community college under the jurisdiction of an Indian tribe in this state that meets the same accreditation standards as a community college district and who registers for enrollment as a full‑time student in a baccalaureate program at a private, nationally or regionally accredited four year degree granting college or university chartered in this state is eligible to submit an application to the commission for participation in the program. The commission shall establish eligibility criteria for the program, including financial need and academic merit, shall develop application forms, procedures and deadlines and shall select qualifying students each year for participation in the program. Participating students shall receive an award in an amount of up to two thousand dollars annually not to exceed two years or four thousand dollars to be used to pay all or a portion of the tuition and fees charged at the private, accredited four year college or university.
B. A private postsecondary education student financial assistance fund is established consisting of legislative appropriations. The commission shall administer the fund. Monies in the fund are exempt from the provisions of section 35‑190 relating to lapsing of appropriations. The commission shall make awards for payment of tuition at eligible colleges or universities to students who are selected to participate in the private postsecondary education student financial assistance program pursuant to subsection A of this section.
C. The commission shall develop a program evaluation procedure in order to determine the effectiveness of the private postsecondary education student financial assistance program in shifting students who would have otherwise attended a public four year college or university to private four year degree granting colleges or universities.
D. A student who fails to receive a baccalaureate degree within a three year period of receipt of the program award shall reimburse the private postsecondary education student financial assistance fund for all awards received pursuant to subsection A of this section. On receipt of supporting documentation from the student, for good cause shown the commission may provide for extensions of the three year period to obtain a baccalaureate degree.
E. For the purposes of this section, "community college district" means a community college district that is established pursuant to sections 15‑1402 and 15‑1403 or section 15‑1402.01 and that is a political subdivision of this state.
Sec. 12. Section 42-5029, Arizona Revised Statutes, is amended to read:
42-5029. Remission and distribution of monies; definition
A. The department shall deposit, pursuant to sections 35‑146 and 35‑147, all revenues collected under this article and articles 4, 5 and 8 of this chapter pursuant to section 42‑1116, separately accounting for:
1. Payments of estimated tax under section 42‑5014, subsection D.
2. Revenues collected pursuant to section 42‑5070.
3. Revenues collected under this article and article 5 of this chapter from and after June 30, 2000 from sources located on Indian reservations in this state.
4. Revenues collected pursuant to section 42‑5010, subsection G and section 42‑5155, subsection D.
B. The department shall credit payments of estimated tax to an estimated tax clearing account and each month shall transfer all monies in the estimated tax clearing account to a fund designated as the transaction privilege and severance tax clearing account. The department shall credit all other payments to the transaction privilege and severance tax clearing account, separately accounting for the monies designated as distribution base under sections 42‑5010, 42‑5164, 42‑5205 and 42‑5353. Each month the department shall report to the state treasurer the amount of monies collected pursuant to this article and articles 4, 5 and 8 of this chapter.
C. On notification by the department, the state treasurer shall distribute the monies deposited in the transaction privilege and severance tax clearing account in the manner prescribed by this section and by sections 42‑5164, 42‑5205 and 42‑5353, after deducting warrants drawn against the account pursuant to sections 42‑1118 and 42‑1254.
D. Of the monies designated as distribution base the department shall:
1. Pay twenty‑five per cent to the various incorporated municipalities in this state in proportion to their population to be used by the municipalities for any municipal purpose.
2. Pay 38.08 per cent to the counties in this state by averaging the following proportions:
(a) The proportion that the population of each county bears to the total state population.
(b) The proportion that the distribution base monies collected during the calendar month in each county under this article, section 42‑5164, subsection B, section 42‑5205, subsection B and section 42‑5353 bear to the total distribution base monies collected under this article, section 42‑5164, subsection B, section 42‑5205, subsection B and section 42‑5353 throughout the state for the calendar month.
3. Pay an additional 2.43 per cent to the counties in this state as follows:
(a) Average the following proportions:
(i) The proportion that the assessed valuation used to determine secondary property taxes of each county, after deducting that part of the assessed valuation that is exempt from taxation at the beginning of the month for which the amount is to be paid, bears to the total assessed valuations used to determine secondary property taxes of all the counties after deducting that portion of the assessed valuations that is exempt from taxation at the beginning of the month for which the amount is to be paid. Property of a city or town that is not within or contiguous to the municipal corporate boundaries and from which water is or may be withdrawn or diverted and transported for use on other property is considered to be taxable property in the county for purposes of determining assessed valuation in the county under this item.
(ii) The proportion that the distribution base monies collected during the calendar month in each county under this article, section 42‑5164, subsection B, section 42‑5205, subsection B and section 42‑5353 bear to the total distribution base monies collected under this article, section 42‑5164, subsection B, section 42‑5205, subsection B and section 42‑5353 throughout the state for the calendar month.
(b) If the proportion computed under subdivision (a) of this paragraph for any county is greater than the proportion computed under paragraph 2 of this subsection, the department shall compute the difference between the amount distributed to that county under paragraph 2 of this subsection and the amount that would have been distributed under paragraph 2 of this subsection using the proportion computed under subdivision (a) of this paragraph and shall pay that difference to the county from the amount available for distribution under this paragraph. Any monies remaining after all payments under this subdivision shall be distributed among the counties according to the proportions computed under paragraph 2 of this subsection.
4. After any distributions required by sections 42‑5030, 42‑5030.01, 42‑5031, 42‑5032 and 42‑5032.01, and after making any transfer to the water quality assurance revolving fund as required by section 49‑282, subsection B, credit the remainder of the monies designated as distribution base to the state general fund. From this amount:
(a) The legislature shall annually appropriate to:
(i) The department of revenue sufficient monies to administer and enforce this article and articles 5 and 8 of this chapter.
(ii) The department of economic security monies to be used for the purposes stated in title 46, chapter 1.
(iii) The firearms safety and ranges fund established by section 17‑273, fifty thousand dollars derived from the taxes collected from the retail classification pursuant to section 42‑5061 for the current fiscal year.
(b) Subject to separate initial legislative authorization, each year the state treasurer shall transfer to the tourism fund an amount equal to the sum of the following:
(i) Three and one‑half per cent of the gross revenues derived from the transient lodging classification pursuant to section 42‑5070 during the preceding fiscal year.
(ii) Three per cent of the gross revenues derived from the amusement classification pursuant to section 42‑5073 during the preceding fiscal year.
(iii) Two per cent of the gross revenues derived from the restaurant classification pursuant to section 42‑5074 during the preceding fiscal year.
E. If approved by the qualified electors voting at a statewide general election, all monies collected pursuant to section 42‑5010, subsection G and section 42‑5155, subsection D shall be distributed each fiscal year pursuant to this subsection. The monies distributed pursuant to this subsection are in addition to any other appropriation, transfer or other allocation of public or private monies from any other source and shall not supplant, replace or cause a reduction in other school district, charter school, university or community college funding sources. The monies shall be distributed as follows:
1. If there are outstanding state school facilities revenue bonds pursuant to title 15, chapter 16, article 7, each month one‑twelfth of the amount that is necessary to pay the fiscal year's debt service on outstanding state school improvement revenue bonds for the current fiscal year shall be transferred each month to the school improvement revenue bond debt service fund established by section 15‑2084. The total amount of bonds for which these monies may be allocated for the payment of debt service shall not exceed a principal amount of eight hundred million dollars exclusive of refunding bonds and other refinancing obligations.
2. After any transfer of monies pursuant to paragraph 1 of this subsection, twelve per cent of the remaining monies collected during the preceding month shall be transferred to the technology and research initiative fund established by section 15‑1648 to be distributed among the universities for the purpose of investment in technology and research‑based initiatives.
3. After the transfer of monies pursuant to paragraph 1 of this subsection, three per cent of the remaining monies collected during the preceding month shall be transferred to the workforce development account established in each community college district pursuant to section 15‑1472 for the purpose of investment in workforce development programs.
4. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, one‑twelfth of the amount a community college that is owned, operated or chartered by a qualifying Indian tribe on its own Indian reservation would receive pursuant to section 15‑1472, subsection D, paragraph 2 if it were a community college district shall be distributed each month to the treasurer or other designated depository of a qualifying Indian tribe. Monies distributed pursuant to this paragraph are for the exclusive purpose of providing support to one or more community colleges owned, operated or chartered by a qualifying Indian tribe and shall be used in a manner consistent with section 15‑1472, subsection B. For the purposes of this paragraph, "qualifying Indian tribe" has the same meaning as defined in section 42‑5031.01, subsection D.
5. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, one‑twelfth of the following amounts shall be transferred each month to the department of education for the increased cost of basic state aid under section 15‑971 due to added school days and associated teacher salary increases enacted in 2000:
(a) In fiscal year 2001‑2002, $15,305,900.
(b) In fiscal year 2002‑2003, $31,530,100.
(c) In fiscal year 2003‑2004, $48,727,700.
(d) In fiscal year 2004‑2005, $66,957,200.
(e) In fiscal year 2005‑2006 and each fiscal year thereafter, $86,280,500.
6. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, seven million eight hundred thousand dollars is appropriated each fiscal year, to be paid in monthly installments, to the department of education to be used for school safety as provided in section 15‑154 and two hundred thousand dollars is appropriated each fiscal year, to be paid in monthly installments to the department of education to be used for the character education matching grant program as provided in section 15‑154.01.
7. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, no more than seven million dollars may be appropriated by the legislature each fiscal year to the department of education to be used for accountability purposes as described in section 15‑241 and title 15, chapter 9, article 8.
8. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, one million five hundred thousand dollars is appropriated each fiscal year, to be paid in monthly installments, to the failing schools tutoring fund established by section 15‑241.
9. After transferring monies pursuant to paragraphs 1, 2 and 3 of this subsection, twenty‑five million dollars shall be transferred each fiscal year to the state general fund to reimburse the general fund for the cost of the income tax credit allowed by section 43‑1072.01.
10. After the payment of monies pursuant to paragraphs 1 through 9 of this subsection, the remaining monies collected during the preceding month shall be transferred to the classroom site fund established by section 15‑977. The monies shall be allocated as follows in the manner prescribed by section 15‑977:
(a) Forty per cent shall be allocated for teacher compensation based on performance.
(b) Twenty per cent shall be allocated for increases in teacher base compensation and employee related expenses.
(c) Forty per cent shall be allocated for maintenance and operation purposes.
F. The department shall credit the remainder of the monies in the transaction privilege and severance tax clearing account to the state general fund, subject to any distribution required by section 42‑5030.01.
G. Notwithstanding subsection D of this section, if a court of competent jurisdiction finally determines that tax monies distributed under this section were illegally collected under this article or articles 5 and 8 of this chapter and orders the monies to be refunded to the taxpayer, the department shall compute the amount of such monies that was distributed to each city, town and county under this section. The department shall notify the state treasurer of that amount plus the proportionate share of additional allocated costs required to be paid to the taxpayer. Each city's, town's and county's proportionate share of the costs shall be based on the amount of the original tax payment each municipality and county received. Each month the state treasurer shall reduce the amount otherwise distributable to the city, town and county under this section by one thirty‑sixth of the total amount to be recovered from the city, town or county until the total amount has been recovered, but the monthly reduction for any city, town or county shall not exceed ten per cent of the full monthly distribution to that entity. The reduction shall begin for the first calendar month after the final disposition of the case and shall continue until the total amount, including interest and costs, has been recovered.
H. On receiving a certificate of default from the greater Arizona development authority pursuant to section 41‑1554.06 or 41‑1554.07 and to the extent not otherwise expressly prohibited by law, the state treasurer shall withhold from the next succeeding distribution of monies pursuant to this section due to the defaulting political subdivision the amount specified in the certificate of default and immediately deposit the amount withheld in the greater Arizona development authority revolving fund. The state treasurer shall continue to withhold and deposit the monies until the greater Arizona development authority certifies to the state treasurer that the default has been cured. In no event may the state treasurer withhold any amount that the defaulting political subdivision certifies to the state treasurer and the authority as being necessary to make any required deposits then due for the payment of principal and interest on bonds of the political subdivision that were issued before the date of the loan repayment agreement or bonds and that have been secured by a pledge of distributions made pursuant to this section.
I. Except as provided by sections 42‑5033 and 42‑5033.01, the population of a county, city or town as determined by the most recent United States decennial census plus any revisions to the decennial census certified by the United States bureau of the census shall be used as the basis for apportioning monies pursuant to subsection D of this section.
J. Except as otherwise provided by this subsection, on notice from the department of revenue pursuant to section 42-6010, subsection B, the state treasurer shall withhold from the distribution of monies pursuant to this section to the affected city or town the amount of the penalty for business location municipal tax incentives provided by the city or town to a business entity that locates a retail business facility in the city or town. The state treasurer shall continue to withhold monies pursuant to this subsection until the entire amount of the penalty has been withheld. The state treasurer shall credit any monies withheld pursuant to this subsection to the state general fund as provided by subsection D, paragraph 4 of this section. The state treasurer shall not withhold any amount that the city or town certifies to the department of revenue and the state treasurer as being necessary to make any required deposits or payments for debt service on bonds or other long‑term obligations of the city or town that were issued or incurred before the location incentives provided by the city or town.
K. On notice from the auditor general pursuant to section 9‑626, subsection D, the state treasurer shall withhold from the distribution of monies pursuant to this section to the affected city the amount computed pursuant to section 9‑626, subsection D. The state treasurer shall continue to withhold monies pursuant to this subsection until the entire amount specified in the notice has been withheld. The state treasurer shall credit any monies withheld pursuant to this subsection to the state general fund as provided by subsection D, paragraph 4 of this section.
L. For the purposes of this section, "community college district" means a community college district that is established pursuant to sections 15‑1402 and 15‑1403 and that is a political subdivision of this state and, subject to the distribution procedures specified in section 15‑1472, subsection D, paragraph 2, subdivision (b), includes a community college district established pursuant to section 15‑1402.01.
Sec. 13. Effective date
Sections 15-1472 and 42-5029, Arizona Revised Statutes, as amended by this act, are effective from and after September 30, 2011.
