cities and towns; technical correction

HB2784 - 572R - H Ver

House Engrossed

cities
and towns; technical correction

(now: school district
tax levy)

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HOUSE BILL 2784

AN
ACT

amending sections 15-991 and 15-992,
arizona revised statutes; relating to school district tax levies.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section

1.
Section
15-991, Arizona Revised Statutes, is amended to read:

START_STATUTE
15-991.

County school
superintendents; annual estimate; monies for ensuing year; property tax
calculations; property tax oversight commission review

A. The
county school superintendent shall recompute the equalization assistance for
education for each school district pursuant to section 15-971, subsection
A and compute the additional amount to be levied pursuant to section 15-992,
subsection B using the property values provided by the county assessor under
section 42-17052. The county school superintendent must
certify in writing to the property tax oversight commission on or before July
25 of each year the amount of equalization assistance for education and the
amount to be levied for each school district from the primary property tax
pursuant to section 15-992.

B. The
county school superintendent must prepare and file with the governing board of
each school district in the county and the property tax oversight commission on
or before July 25 of each year a written estimate of the amount of monies required
by each school district for the ensuing school year based on the proposed
budget adopted by each school district governing board. The estimate
shall contain:

1. A
statement of the student count of each school district.

2. The
additional amounts needed for each school district from the primary property
tax and the secondary property tax, as estimated by the county school
superintendent. The county school superintendent shall certify those
amounts to the board of supervisors and the property tax oversight commission
in writing at the time of filing the estimate.

3. The amount determined pursuant to section
15-992, subsection H.

3.

4.

The
calculation of the amount to be levied as prescribed by section 15-992
using the values provided by the county assessor under section 42-17052.

C. The
property tax oversight commission must review the primary property tax
calculations filed under subsection B, paragraph
3

4
of this
section.

D. The
county school superintendent must file in writing with the county board of
supervisors and the property tax oversight commission on or before the third Monday
in August of each year the amount that is required to be levied for each school
district from both the primary property tax prescribed by section 15-992
and the secondary property tax.

E. On
or before September 1

of each year
, the governing board of a school district shall file
with the county school superintendent an estimate of the amount of title VIII
of the elementary and secondary education act of 1965 monies it is eligible to
receive during the current year. On or before June 1
of each year
, the governing board shall file
with the county school superintendent and the superintendent of public
instruction a statement of the actual amount of title VIII of the elementary
and secondary education act of 1965 monies it received during the current
year. This subsection does not apply to accommodation schools.

F. The
department may collect any other similar or related information from school
districts that the department may determine is necessary to carry out the
purposes of this section.
END_STATUTE

Sec.
2.
Section
15-992, Arizona Revised Statutes, is amended to read:

START_STATUTE
15-992.

School
district tax levy; additional tax in districts ineligible for equalization
assistance; primary property tax levy reduction; definition

A. The
board of supervisors of each county, at the time of levying other taxes, shall
annually levy school district taxes on the property in any school district in
which additional amounts are required, which shall be at rates prescribed in this
section. A delinquency factor for estimated uncollected taxes may
not be included in the computation of the primary tax rate for school district
taxes. Local property taxes may not be levied for any deficit in the
classroom site fund. The taxes shall be added to and collected in the same
manner as other county taxes on the property within the school
district. The amount of the school district taxes levied on the
property in a particular school district shall be paid into the school fund of
that school district.

B. At
the same time of levying taxes as provided in subsection A of this section, the
county board of supervisors shall annually levy an additional tax in each
school district that is not eligible for equalization assistance as provided in
section 15-971 in an amount determined as follows:

1. Determine
the levy that would be produced by fifty percent of the applicable qualifying
tax rate, prescribed in section 15-971, subsection B, per $100 assessed
valuation.

2. Subtract
the amounts determined in section 15-971, subsection A and subsection F
of this section from the levy determined in paragraph 1 of this
subsection. This difference is the additional amount levied or
collected as voluntary contributions pursuant to title 48, chapter 1, article
8, except that if the difference is zero or is a negative number, there shall
be no levy.

C. Monies
collected pursuant to subsections B and F of this section shall be
transmitted to the state treasurer for deposit in the state general fund to aid
in school financial assistance.

D. The
additional tax prescribed in subsection B of this section is considered to be
primary property tax for purposes of section 15-972, subsection B, except
that this state is not required to make the payments prescribed in section 15-972,
subsection H for these reductions in taxes.

E. The
tax levy prescribed in subsection A of this section shall be a rate equal to
the applicable qualifying tax rate or rates as prescribed in section 15-971,
subsection B or a rate that would result in a levy that equals the school
district equalization assistance base prescribed in section 15-971
subtracted by any amount received pursuant to section 15-905, subsections
K, O and P per $100 of assessed valuation used for primary property taxes,
whichever is less.

F. At
the same time of levying taxes as provided in subsection A of this section, the
county board of supervisors shall annually levy an additional tax in each
common school district not within a high school district that is equal to the
lesser of:

1. A
rate that is equal to the applicable qualifying tax rate or rates as prescribed
in section 15-971, subsection B.

2. A
rate that would result in a levy that equals the statewide average per pupil
funding for high school pupils multiplied by the student count as defined in
section 15-901 of resident high school pupils in the common school
district not within a high school district during the prior school
year. On or before July 1 of each year, the department of education
shall provide each common school district not within a high school district
with the student count as defined in section 15-901 of resident high school
pupils in the district during the prior school year. On or before
July 1 of each year, the department of education shall provide each county
board of supervisors with the statewide average per pupil funding for high
school pupils, the student count as defined in section 15-901 of resident
high school pupils in the common school district not within a high school
district during the prior school year and any other information requested by
the county board of supervisors for the purposes of levying the tax prescribed
in this subsection. For the purposes of this paragraph, "per
pupil funding" means the amount calculated pursuant to section 15-943,
paragraph 2, subdivision (a) for grades nine through twelve multiplied by the
sum of the following:

(a) District
additional assistance pursuant to section 15-961, subsections A, B and C
for a school district with a student count of six hundred or more in grades
nine through twelve.

(b) The
base level amount prescribed by section 15-901.

G. At
the time of levying taxes as provided in subsection E of this section, the
county school superintendent shall annually validate any additional primary
school district tax levy amount requests from each school district and levy the
sum of the following amounts:

1. A
rate that would result in a levy that equals the difference between the
transportation revenue control limit as determined in section 15-946 and
the transportation support level as determined in section 15-945 or a
lesser amount.

2. A
rate that would result in a levy that equals any amount pursuant to section 15-910.

3. A
rate that would result in a levy that equals any amount for tuition loss as
determined in section 15-954.

4. A
rate that would result in a levy that equals any amount for the small school
adjustment as determined in section 15-949.

5. A
rate that would result in a levy that equals any amount for liabilities in
excess of the school district budget pursuant to section 15-907.

6. A
rate that would result in a levy that equals any amount for adjacent ways
pursuant to section 15-995.

7. A
rate that would result in a levy that equals the amount not captured by the
qualifying tax rate as a result of property subject to the government property
lease excise tax pursuant to title 42, chapter 6, article 5 as calculated in
section 15-971, subsection B, paragraph 2.

8. Following
the recommendation of the county school superintendent and on approval by the
county board of supervisors, for a school district that is not eligible for
state aid, a rate that would result in a levy that equals any legal amount not
levied in the current year as a result of underestimated average daily
membership in the current year or as a result of a judgment in accordance with
section 42-16213.

9. A
rate that would result in a levy that equals any amount pursuant to a
qualifying dropout prevention program that was originally established by law in
1987.

10. On
the recommendation of the county school superintendent and on approval by the
county board of supervisors before adoption of tax rates pursuant to section 42-17151,
a rate that would result in a levy that equals any separately stated cash
deficit from the prior fiscal year resulting from an anticipated or actual
deviation in the property tax roll, including resolutions or judgments pursuant
to title 42, chapter 16, articles 5 and 6.

H. At the time of levying taxes as provided
in subsections E and G of this section, the county school superintendent shall
annually reduce the primary school district tax levy amount requests from each
school district by an amount determined as follows:

1. Determine the total ending cash balances
from the school district's maintenance and operations fund and unrestricted
capital outlay fund reported in the school district's annual financial report
for the immediately preceding fiscal year pursuant to section 15-904.

2. Determine the amount that the school
district governing BOARD budgeted from budget balances for the current year
pursuant to section 15-947, subsection C, paragraph 2, subdivision (
a
), item (
i
) and subsection D, paragraph 4.

3. Subtract the amount determined
in paragraph 2 of this subsection from the amount determined in paragraph 1 of
this subsection.

4. Eighty-five
percent of the amount calculated pursuant to paragraph 3 of this subsection is
the amount of the reduction.

H.

I.
For
the purposes of this section, "assessed valuation" includes the
values used to determine voluntary contributions collected pursuant to title 9,
chapter 4, article 3 and title 48, chapter 1, article 8.
END_STATUTE

Sec. 3.
School district
property tax levy reductions; tax years 2027 through 2031; delayed repeal

A. Notwithstanding sections
15-991 and 15-992, Arizona Revised Statutes, as amended by this
act, in each of tax years 2027, 2028, 2029, 2030 and 2031, the county school
superintendent of each county shall reduce the primary school district tax levy
amounts requested by each school district pursuant to section 15-992,
Arizona Revised Statutes, as amended by this act, by an amount determined by
the school district, except that the amount of the reduction for any tax year
may not be less than twenty percent of the amount calculated pursuant to
section 15-992, subsection H, paragraph 3, Arizona Revised Statutes, as
added by this act.

B. This section is repealed
from and after July 1, 2032.