small school adjustment; student count

HB2883 - 572R - I Ver

REFERENCE TITLE:
small school adjustment; student count

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 2883

Introduced by

Representative
Tsosie

AN
ACT

amending section 15-949, Arizona
Revised Statutes; relating to school district revenue limitation for
maintenance and operation.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Section 15-949, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-949.

Small school districts; exemption from general budget limit;
budget revision

A. The governing board of a common school district
with a student count in kindergarten programs and grades one through eight of
one hundred
twenty-five

sixty
or
less, the governing board of a high school district with a student count of one
hundred
sixty
or less or the governing board of a unified
school district or the county school superintendent for an accommodation school
with a student count of one hundred
twenty-five

sixty
or less in kindergarten programs and grades one through
eight or with a student count of one hundred
sixty
or
less in grades nine through twelve shall compute a revenue control limit and a
general budget limit, but the governing board or the county school
superintendent may:

1. Adopt a budget in excess of the general budget
limit without the necessity of an election under section 15-481, provided
that for a unified school district or for an accommodation school the excess
amount of expenditures shall be attributable to the student count in
kindergarten programs and grades one through eight or to the student count in
grades nine through twelve as provided in this subsection.

2. Revise its budget to include the costs for
additional pupils who were not anticipated when the budget was adopted, if it
receives permission as follows:

(a) If a governing board:

(i) The governing board shall send a petition to the
county school superintendent requesting authority to revise its
budget. The petition shall include a copy of the proposed budget.

(ii) The county school superintendent shall
recommend the action to be taken on the petition and forward the recommendation
and the petition to the board of supervisors.

(iii) The board of supervisors shall hold a hearing
on the petition within twenty days after receipt of the petition and shall
determine whether to allow the petition, allow the petition after revision or
deny the petition.

(b) If a county school superintendent, the county
school superintendent shall send the revised budget to the board of
supervisors, and the board of supervisors shall hold a hearing on the
recommendation within twenty days after receipt of the recommendation and shall
determine whether to allow the revised budget, allow the revised budget after
further revision or deny the revision.

B. If the board of supervisors revises or denies the
petition or recommendation presented pursuant to subsection A, paragraph 2,
subdivision (a), item (iii) or subdivision (b) of this section, the board shall
state the reasons for revision or denial in writing.

C. School districts that in any year after fiscal
year 1984-1985 but before fiscal year 1999-2000
have

operated under the provisions of the small school adjustment as provided for in
subsection A of this section and that
have
subsequently
exceeded the student count limits expressed in subsection A of this section may
continue in successive years to adopt a budget greater than the general budget
limit without the necessity of an election under section 15-481, except
that the amount greater than the general budget limit shall not exceed
fifty thousand dollars
$50,000
. The
amount that is adopted without the use of an election under section 15-481
and that is greater than the general budget limit is specifically exempt from
the revenue control limit.

D. Notwithstanding subsection C of this section,
school districts that exceeded the student count limits prescribed in
subsection A of this section may adopt, in the first year that these limits are
exceeded, a budget that exceeds the general budget limit without an election
conducted pursuant to section 15-481 or pursuant to subsection E of this
section, except that the amount that exceeds the general budget limit shall not
exceed the amount authorized pursuant to subsection C of this section plus the
limit prescribed in subsection E of this section.� The amount that is adopted
without an election and that exceeds the general budget limit is exempt from
the revenue control limit.

E. School districts that in any year after fiscal
year 1998-1999
have
operated under the provisions of
the small school adjustment as provided in subsection A of this section and
that
have
subsequently exceeded the student count limits
prescribed in subsection A of this section may continue in successive years to
adopt a budget greater than the general budget limit subject to an election,
except that the amount that is greater than the general budget limit shall not
exceed the amount that is prescribed in this subsection.� The amount that is
adopted pursuant to this subsection is specifically exempt from the revenue
control limit and shall be funded by a levy on secondary property taxes in the
school district.� The maximum amount that may be adopted pursuant to this
subsection is computed as follows:

1. For a unified school district, separate the
revenue control limit into elementary and secondary components based on the
weighted student count as provided in section 15-971, subsection B,
paragraph 2, subdivision (a).� Use the elementary component of the revenue
control limit for the purposes of paragraph 2 of this subsection and the
secondary component of the revenue control limit for the purposes of paragraph
3 of this subsection.

2. For a common or unified district that used the
provisions of subsection A of this section based on its elementary student
count, the amount is determined as follows:

(a) Subtract one hundred
twenty-five

sixty
from the elementary student count.

(b) Multiply the difference in subdivision (a) of
this paragraph by 0.45 percent.

(c) Subtract the product determined in subdivision
(b) of this paragraph from thirty-five percent.� If the result is zero or
less than zero, the district is not eligible to use the provisions of this
paragraph.

(d) Multiply the difference determined in
subdivision (c) of this paragraph by the elementary revenue control limit.

3. For a high school or unified district that used
the provisions of subsection A of this section based on its secondary student
count, the amount is determined as follows:

(a) Subtract one hundred
sixty
from
the secondary student count.

(b) Multiply the difference in subdivision (a) of
this paragraph by 0.65 percent.

(c) Subtract the product determined in subdivision
(b) of this paragraph from sixty-five percent.� If the result is zero or
less than zero, the district is not eligible to use the provisions of this
paragraph.

(d) Multiply the difference determined in
subdivision (c) of this paragraph by the secondary revenue control limit.

4. For a unified school district that used the
provisions of subsection A of this section for both its elementary and
secondary pupils, combine the amounts determined in paragraphs 2 and 3 of this
subsection.

F. For the purposes of subsection E of this section:

1. "Elementary" means kindergarten
programs and grades one through eight.

2. "Secondary" means grades nine through
twelve.

G. The part of the primary tax rate set to fund the
small school district adjustment as provided in subsections D and E of this
section shall not be included in the computation of additional state aid for
education as prescribed in section 15-972.

H. The election required pursuant to subsection E of
this section shall conform to the procedural requirements for calling the
election, preparing the informational pamphlet and preparing the ballot as
prescribed in section 15-481, subsections A, B, C and D.� The maximum
number of years that a budget override approved pursuant to subsection E of
this section may be in effect is five years.

I. If the proposed budget override will be fully
funded by a levy of taxes on the taxable property within the school district,
the ballot shall contain the words "budget override, yes" and
"budget override, no", and the voter shall signify the voter's
desired choice.� The ballot shall also contain the amount of the proposed
budget override compared to the amount the school district budgeted in the
preceding year and the amount the school district would be allowed to budget
for if the measure is not approved by the voters.� The statement shall also
include the estimated amount of the override for each year the override is
sought.� The ballot shall also include the following statement:

The budget override authorized by this election allows the
_______________ school district to levy property taxes in excess of the
property tax levy allowed by law to fund the school district's revenue control
limit.� The property tax levy for the year for which adopted and for ____
subsequent years will be annually adjusted based on a formula that authorizes
the _______________ school district to exceed the revenue control limit by up
to thirty-five percent for kindergarten programs and grades one through eight
or up to sixty-five percent for grades nine through twelve.� The levy
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 an estimate of assessed valuation
used for secondary property tax purposes, the proposed override in the
________________ school district's budget over that allowed by the revenue
control limit would result in an estimated increase in the school district's
tax rate of
$
_________________
dollars

per
one hundred dollars
$100
of
assessed valuation for the secondary property tax purposes.

J. If the proposed budget override 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
override, yes" and "budget override, no", and the voter shall
signify the voter's desired choice.� The ballot shall also contain the amount
of the proposed budget override compared to the amount the school district
budgeted in the preceding year and the amount the school district would be
allowed to budget for if the measure is not approved by the voters.� The
statement shall also include the estimated amount of the override for each year
the override is sought. The ballot shall also include the following
statement:

Any budget override 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. For the purposes of subsections H and I of this
section, levy of taxes on the taxable property does not include a levy of the
government property lease or park property lease excise taxes assessed pursuant
to title 42, chapter 6, article 5.
END_STATUTE