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HB4041 • 2026

K-3 reading plan; cash balances

HB4041 - K-3 reading plan; cash balances

Budget Education Taxes
Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
Matt Gress
Last action
2026-03-03
Official status
House committee of the whole
Effective date
Not listed

Plain English Breakdown

The bill summary and text do not provide specific details about the distribution of funds among schools.

K-3 Reading Plan; Cash Balances

This bill allows school districts with high third-grade reading struggles and extra cash to spend more money on improving reading skills without a special vote.

What This Bill Does

  • Allows school districts to adopt a budget that exceeds the general budget limit if they have an ending cash balance exceeding their budget balance carryforwards and over 30% of third graders struggle with reading.
  • Requires schools to submit yearly plans for helping young students read better, including how much money will be spent on these efforts.
  • Limits the use of extra funds only for teaching purposes based on the school's plan to improve reading skills.

Who It Names or Affects

  • School districts and charter schools in Arizona
  • Third-grade students who struggle with reading

Terms To Know

Budget Balance Carryforwards
The leftover money from the previous year's budget that can be used this year.
General Budget Limit (GBL)
The maximum amount a school district is allowed to spend without special permission.

Limits and Unknowns

  • It does not specify how the extra funds will be distributed among schools.
  • The bill's effectiveness in improving reading skills for third graders remains uncertain.

Bill History

  1. 2026-03-03 House

    House committee of the whole

  2. 2026-02-24 House

    House minority caucus

  3. 2026-02-24 House

    House majority caucus

  4. 2026-02-23 House

    House consent calendar

  5. 2026-02-10 House

    House second read

  6. 2026-02-09 House

    House Rules: C&P

  7. 2026-02-09 House

    House Education: DP

  8. 2026-02-09 House

    House first read

Official Summary Text

HB4041 - 572R - House Bill Summary

ARIZONA HOUSE OF REPRESENTATIVES

57th
Legislature, 2nd Regular Session

Majority Research Staff

House:
ED DP 8-2-1-1

HB
4041
: K-3 reading plan; cash balances

Sponsor:
Representative Gress, LD 4

Caucus
& COW

Overview

Allows
a school district to adopt a budget that exceeds its general budget limit (GBL)
if the school district has an ending cash balance that exceeds its budget
balance carryforwards and more than 30% of the school district's 3rd grade
students do not demonstrate sufficient reading skills.�

History

A school district governing board (governing board) must
publish an annual financial report that contains budgeted and actual
expenditures for the preceding fiscal year. A governing board may not adopt a
budget that exceeds the GBL or unrestricted capital budget limit (A.R.S. ��
15-904

and
15-905
).

A
budget balance
is the difference between actual and
budgeted expenditures. A school district may budget any budget balance in the Maintenance
and Operation (M&O) Fund from the current fiscal year for use in the M&O
Fund in the budget year, as well as the unexpended budget balance in the
Unrestricted Capital Outlay (UCO) Fund from the previous fiscal year. The
M&O Fund budget balance carryforward is capped at 4% of the current year
revenue control limit (A.R.S. ��
15-943.01

and
15-947
) (
Uniform System
of Financial Records
).

Each school district and charter school must annually submit
to the Arizona Department of Education a K-3 reading program plan for improving
the reading proficiency of kindergarten, 1st, 2nd and 3rd grade students. The
plan must include baseline data on the reading proficiency of the school
district's or charter school's students and a budget for spending K-3 and K-3
reading support level weight monies. A school district and charter school may
use K-3 reading support level weight monies only for instructional purposes
based on its submitted K-3 reading program plan �(
A.R.S. � 15-211
).

Provisions

1.

Authorizes a
school district that has an ending cash balance in the M&O Fund and UCO
Fund for the immediately preceding school year that exceeds the amount the
school district budgeted from current year budget balance carryforwards to
adopt a budget that exceeds the GBL without a budget override election if the:

a.

amount does
not exceed 20% of the difference between the ending cash balances and the
budget balance carryforwards; and

b.

more than 30%
of the school district's 3rd grade students do not demonstrate sufficient
reading skills as established by the State Board of Education according to the
reading portion of the statewide assessment.

2.

Requires the
school district's budgeted amount to be funded by M&O Fund and UCO Fund monies
that were not included in the current year budget.

3.

Limits the
school district to using the budgeted monies for instructional purposes based
on the school district's K-3 reading program plan.

4.

Asserts a
school district may only use the budgeted monies to supplement and not supplant
monies from any other source used for K-3 reading program plan expenditures.

5.

Makes
technical and conforming changes.

6.

7.

8.

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FOOTER ---------

9.

Initials CH���������������������� HB
4041

10.

2/18/2026� Page 0 Caucus
& COW

11.

12.

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Current Bill Text

Read the full stored bill text
HB4041 - 572R - I Ver

REFERENCE TITLE:
K-3 reading plan; cash balances

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 4041

Introduced by

Representative
Gress

AN
ACT

amending section 15-211, Arizona
Revised Statutes; relating to the state board of education.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Section 15-211, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-211.

K-3 reading program; dyslexia specialist; dyslexia training;
receipt and use of monies; additional funding; budget increase; annual report

A. The department of education shall administer a K-3
reading program to improve the reading proficiency of pupils in kindergarten
programs and grades one, two and three in the public schools of this state.

B. The department of education shall designate a
dyslexia specialist for the department to provide school districts and charter
schools with support and resources that are necessary to assist students with
dyslexia.

C.
On or before July 1, 2022,

Each school district and charter school shall ensure that at least one
kindergarten through third grade teacher, literacy coach or literacy specialist
in each school has received training related to dyslexia that complies with the
requirements prescribed in section 15-219.

D. Each school district and charter school shall
submit to the department of education a plan for improving the reading
proficiency of the school district's or the charter school's pupils in
kindergarten programs and grades one, two and three. The plan
shall
must
include baseline data on the
reading proficiency of the school district's or the charter school's pupils in
kindergarten programs and grades one, two and three and a budget for spending
monies from both the K-3 support level weight and the K-3 reading
support level weight established in section 15-943.� Each school district
and charter school shall annually submit to the department of education on or
before October 1 an updated K-3 reading program plan that includes data
on program expenditures and results.

E. School districts and charter schools shall use
monies generated by the K-3 reading support level weight established in
section 15-943 only on instructional purposes based on the plan submitted
pursuant to subsection D of this section intended to improve reading
proficiency for pupils in kindergarten programs and grades one, two and three
with particular emphasis on pupils in kindergarten programs and grades one and
two.

F. Each school district and charter school that is
assigned a letter grade of C, D or F pursuant to section 15-241 or that
has more than ten percent of its pupils in grade three who do not demonstrate
sufficient reading skills as established by the state board of education
according to the reading portion of the statewide assessment shall receive
monies generated by the K-3 reading support level weight established in
section 15-943 only after the K-3 reading program plan of the
school district or charter school has been submitted, reviewed and recommended
for approval by the department of education and approved by the state
board. The state board must give approval to a school district or
charter school before any portion of the monies generated by the K-3
reading support level weight may be distributed to the school district or
charter school pursuant to this subsection.

G. Pupils in a charter school that is in its first
year of operation and that is sponsored by the state board of education, the
state board for charter schools, a university under the jurisdiction of the
Arizona board of regents, a community college district or a group of community
college districts are eligible for the K-3 reading support level weight.

H. A school district that has an
ending cash balance in the maintenance and operations fund and unrestricted
capital outlay fund reported in the school district's annual financial report
for the immediately preceding school year pursuant to section 15-904 that
exceeds the amount that the school district 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 may adopt a bUDGET for the budget year that exceeds
the general budget limit without an election conducted pursuant to section 15-481
in an amount that does not exceed twenty percent of the difference between the
ending cash balances and the budget balance carryforwards if the school
district has more than thirty percent of its pupils in grade three who do not
demonstrate sufficient reading skills as established by the state board of
education according to the reading portion of the statewide assessment.� The
amount adopted pursuant to this subsection shall be funded by monies from the
maintenance and operations fund and unrestricted capital outlay fund that were
not included in the budget for the current year.� The school district shall use
monies budgeted pursuant to this subsection only for instructional purposes
based on the plan submitted pursuant to subsection D of this section.� The
school district shall use monies pursuant to this subsection to supplement and
not supplant monies from any other source that are used for expenditures based
on the plan submitted pursuant to subsection D of this section.�

H.

I.
The
department of education shall solicit gifts, grants and donations from any
lawful public or private source
in order
to provide
additional funding for the K-3 reading program.

I.

J.

The
state board of education may establish rules and policies for the K-3
reading program, including:

1. The proper use of monies in accordance with
subsection

subsections
E
and
H
of this section.

2. The distribution of monies by the department of
education in accordance with subsection D of this section.

3. The compliance of reading proficiency plans
submitted pursuant to subsection D of this section with section 15-704.

J.

K.
Pursuant
to subsection
I

j
of this
section, the department of education shall develop program implementation
guidance for school districts and charter schools to assist schools in
administering an effective K-3 evidence-based reading program
plan. This guidance shall include identifying and recommending
appropriate program expenditures, providing technical oversight and assistance
for annually updating reading program plans, selecting and adopting evidence-based
reading curricula and providing and promoting teacher professional development
that is based on evidence-based reading research.� The department shall
prioritize supports and interventions, including enrollment in reading
trainings and professional development, for school districts and charter
schools that have the highest percentage of pupils who do not demonstrate
sufficient reading skills as established by the state board of
education. The department shall deposit any monies received for
offering reading trainings or professional development, including coaching, in
the department of education professional development revolving fund established
by section 15-237.01.

K.

L.
On
or before December 15, the department of education shall submit an annual
report on the K-3 reading program to the governor, the president of the
senate and the speaker of the house of representatives and shall provide a copy
of this annual report to the secretary of state, the state board of education
and the chairpersons of the education committees of the senate and the house of
representatives. The report
shall
must
contain all of the following:

1. Information on the improvement of K-3
reading in this state, including achievement data statewide and achievement
data at the school district and charter school level. The
information pursuant to this paragraph
shall
must
include data and information on continued proficiency on
the statewide assessment in subsequent grades.

2. A description of the activities of the department
to support school districts and charter schools in improving K-3 reading.

3. Specific findings on methods by which the
department may continue to improve support and assistance for school districts
and charter schools in the administration of K-3 reading program plans.

4. Information and data on K-3 reading program
plans throughout this state and the expenditure of K-3 reading monies by
school districts and charter schools.

5. Data reported pursuant to section 15-701,
subsection A, paragraph 2, subdivision (d).
END_STATUTE