school district budgets; two years

SB1571 - 572R - I Ver

REFERENCE TITLE:
school district budgets; two years

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SB 1571

Introduced by

Senator
Hoffman

AN
ACT

amending sections 15-448, 15-481,
15-901, 15-905 and 15-915, Arizona Revised Statutes; relating
to school district budgets.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Section 15-448, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-448.

Formation of unified school district; board membership; budget

A. One or more common school districts and a high
school district with coterminous or overlapping boundaries may establish a
unified school district pursuant to this section. Unification of a
common school district and a high school district is not authorized by this
section if any of the high school facilities owned by the new unified school
district would not be located within its boundaries.

B. Formation of a unified school district shall be
by resolutions approved by the governing boards of the unifying school
districts and certification of approval by such governing boards to the county
school superintendent of the county or counties in which such individual school
districts are located.� A common school district and high school district that
unify pursuant to this section shall not exclude from the same unification a
common school district that has overlapping boundaries with the high school
district and that wishes to unify. Except as provided in subsection
D of this section, the formation of a unified school district becomes effective
on July 1 of the next fiscal year following the certification of the county
school superintendent. An election is not required to form a unified
school district pursuant to this section. Notice of the proposed vote of the
governing boards on the resolutions prescribed in this subsection shall be
posted in at least three public places in each of the school districts proposed
to be unified at least ninety days before the proposed vote. At
least ninety days before the governing boards vote on the resolutions
prescribed in this subsection, the governing boards shall mail a pamphlet to
each household with one or more qualified electors that lists the full cash
value, the assessed valuation and the estimated amount of the primary property
taxes and the estimated amount of the secondary property taxes under the
proposed unification for each of the following:

1. 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.

2. An owner-occupied residence whose assessed
valuation is one-half of the assessed valuation of the residence in paragraph 1
of this subsection.

3. An owner-occupied residence whose assessed
valuation is twice the assessed valuation of the residence in paragraph 1 of
this subsection.

4. 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.

C. The boundaries of the unified school district
shall be the boundaries of the former common school district or districts that
unify.� The boundaries of the common school district or districts that are not
unifying remain unchanged.� The county school superintendent, immediately on
receipt of the approved resolutions prescribed by subsection B of this section,
shall file with the board of supervisors, the county assessor and the
superintendent of public instruction a transcript of the boundaries of the unified
school district. The boundaries shown in the transcript shall become
the legal boundaries of the school districts on July 1 of the next fiscal year.

D. On formation of the unified school district, the
governing board consists of the members of the former school district governing
boards and the members shall hold office until January 1 following the first
general election after formation of the district.� For the purpose of all actions
that are necessary to operate the unified district for the next year, the
unified school district governing board is constituted and may conduct meetings
after the adoption of the unification resolutions prescribed by subsection B of
this section.

E. Beginning on January 1 following the first
general election after formation of the unified school district, the governing
board shall have five members.� At the first general election after the
formation of the district, members shall be elected in the following manner:

1. The three candidates receiving the highest, the
second highest and the third highest number of votes shall be elected to four-year
terms.

2. The two candidates receiving the fourth and fifth
highest number of votes shall be elected to two-year
terms. Thereafter all offices shall have four-year terms.

F. The new unified school district may appoint a
resident of the remaining common school district to serve as a nonvoting member
of the governing board to represent the interests of the high school pupils who
reside in the remaining common school district and who attend school in the
unified school district.

G. For the first year of operation, the unified
school district governing board shall prepare a consolidated budget based on
the student counts from the school districts comprising the unified school
district. The unified school district may budget for unification
assistance pursuant to section 15-912.01.

H. The governing board of the unified school
district shall prepare policies, curricula and budgets for the
district. These policies shall require that:

1. The base compensation of each certificated
teacher for the first year of operation of the new unified school district
shall not be lower than the certificated teacher's base compensation for the
prior year in the previously existing school districts.

2. The certificated teacher's years of employment in
the previously existing school districts shall be included in determining the
teacher's certificated years of employment in the new unified school district.

I. On formation of a unified school district, any
existing override authorization of the former high school district and the
former common school district or districts shall continue until expiration
based on the revenue control limit of the school district or districts that had
override authorization before unification. The unified school
district may request new override authorization for
the
one or more
budget
year
years

as provided in section 15-481 based on the combined revenue control limit
of the new district after unification. If the unified school
district's request for override authorization is approved, it will replace any
existing override for
the

each
budget
year
for which an override authorization is approved
.

J. The unified school district shall admit high
school pupils who reside in a common school district that was located within
the boundaries of the former high school district. For the purposes
of determining student count and for apportionment of state aid, the school
membership of these pupils is deemed to be enrollment in the unified school
district.

K. All assets and liabilities of the unifying school
districts shall be transferred and assumed by the new unified school district.�
Any existing bonded indebtedness of a common school district or a high school
district unifying pursuant to this section shall be assumed by the new unified
school district and shall be regarded as an indebtedness of the new unified
school district for the purpose of determining the debt incurring authority of
the district.� Taxes for the payment of such bonded indebtedness shall be
levied on all taxable property in the new unified school district, but nothing
in this subsection shall be construed to relieve from liability to taxation for
the payment of all taxable property of the former high school district if
necessary to prevent a default in the payment of any bonded indebtedness of the
former high school district.� The residents of a common school district that
does not unify shall not vote in bond or override elections of the unified
school district and shall not be assessed taxes as a result of a bond or
override election of the unified school district.

L. If the remaining common school district had
authorization for an override as provided in section 15-481 or 15-482,
the override authorization continues for the remaining common school district
or districts in the same manner as before the formation of the unified school
district.

M. The bonding authorization and bonding limitations
continue for the remaining common school district or districts in the same
manner as before the formation of the unified school district.

N. This section does not relieve a school district
formed pursuant to section 15-457 or 15-458 of its liability for
any outstanding bonded indebtedness.

0. For school districts that become unified after
July 1, 2004 and where all of the common schools were eligible for the small
school district weight pursuant to section 15-943, paragraph 1, subdivision
(a) when computing their base support level and base revenue control limit
before unification, the unified school district may continue to use the small
school district weight as follows:

1. Annually determine the common school student
count and the weighted student count pursuant to section 15-943,
paragraph 1, subdivision (a) for each common school district before
unification.

2. Calculate the sum of the common school districts'
student counts and weighted student counts determined in paragraph 1 of this
subsection.

3. Divide the sum of the weighted student counts by
the sum of the student counts determined in paragraph 2 of this subsection.

4. The amount determined in paragraph 3 of this
subsection shall be the weight for the common schools in the unified school
district.

P. A unified school district may calculate its
revenue control limit and district support level by using subsection O of this
section as follows:

1. Determine the number of individual school
districts that existed before unification into a single school district.

2. Multiply the amount determined in paragraph 1 of
this subsection by six hundred.

3. Multiply the amount determined in paragraph 2 of
this subsection by 0.80.

4. If the amount determined in paragraph 3 of this
subsection exceeds the student count of the unified school district, the
unified school district is eligible to use subsection O of this section.

Q. Subsections O and P of this section shall remain
in effect until the aggregate student count of the common school districts
before unification exceeds the aggregate number of students of the common
school districts before unification authorized to utilize section 15-943,
paragraph 1, subdivision (a).
END_STATUTE

Sec. 2. Section 15-481, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-481.

Override election; budget increases; informational pamphlet;
notice; ballot; effect

A. If a proposed budget
of a school district exceeds the aggregate budget limit for
the

any
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 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
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 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 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

any
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

any
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)

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Down

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���
Count Limit
���
School
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���
Base Level
���
Factor

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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)

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Down

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���
Count Limit
��
School
Districts
������
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���
Factor

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125

x 1.278 + (0.0003 x���� x
$
=
$

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��������������������������������������������������� Small

���������� Phase Down���� Phase Down��������������� School
District

����������
Base
����
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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

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���
Count Limit
���
School
Districts
���
Base Level
��
Factor

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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 th
is
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 of this section, the maximum period of an override authorized
pursuant to this subsection is five years.

4. Subsection P,
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 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 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

any
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 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. 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

at
least one
budget year or
the
budget
year

years
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. 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

at least one
budget year or
the
budget
year

years
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. 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. 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. In addition to
subsections P and S 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. 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. 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. 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. 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. 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. 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

at least one
budget year or
the
budget
year

years
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. 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. 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 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. 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 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.
END_STATUTE

Sec. 3. Section 15-901, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-901.

Definitions

A. In this title, unless the context otherwise
requires:

1. "Average daily membership" means the
total enrollment of fractional students and full-time students, minus
withdrawals, of each school day through the first one hundred days or two
hundred days in session, as applicable, for the current year. For
the purposes of this paragraph, "withdrawals" means students who are
formally withdrawn from schools or students who are absent for ten consecutive
school days, except for excused absences identified by the department of
education. For computation purposes, a student who is absent for
nine or fewer consecutive school days, including the last day of the school
year, is not a withdrawal and may not be subtracted from the total enrollment
of fractional students and full-time students. For the
purposes of this section, school districts and charter schools shall report
student absence data to the department of education at least once every sixty
days in session.� For computation purposes, the effective date of withdrawal
shall be retroactive to the last day of actual attendance of the student or
excused absence. A school district or charter school may satisfy any
of the time and hours requirements prescribed in this subsection in any manner
prescribed in the school district's or charter school's instructional time
model adopted under section 15-901.08.

(a) "Fractional student" means:

(i) For common schools, a preschool child who is
enrolled in a program for preschool children with disabilities of at least
three hundred sixty minutes each week that meets at least two hundred sixteen
hours over the minimum number of days or a kindergarten student who is at least
five years of age before January 1 of the school year and enrolled in a school
kindergarten program that meets at least three hundred fifty-six hours
for a one hundred eighty-day school year, or the instructional hours
prescribed in this section. In computing the average daily
membership, preschool children with disabilities and kindergarten students
shall be counted as one-half of a full-time student. For
common schools, a part-time student is a student enrolled for less than
the total time for a full-time student as defined in this
section. A part-time common school student shall be counted as
one-fourth, one-half or three-fourths of a full-time
student if the student is enrolled in an instructional program that is at least
one-fourth, one-half or three-fourths of the time a full-time
student is enrolled as defined in subdivision (b) of this paragraph.� The hours
in which a student is scheduled to attend a common school during the regular
school day shall be included in the calculation of the average daily membership
for that student.

(ii) For high schools, a part-time student who
is enrolled in less than four subjects that count toward graduation as defined
by the state board of education, each of which, if taught each school day for
the minimum number of days required in a school year, would meet a minimum of
one hundred twenty-three hours a year, or the equivalent, in a recognized
high school. The average daily membership of a part-time high
school student shall be 0.75 if the student is enrolled in an instructional
program of three subjects that meet at least five hundred forty hours for a one
hundred eighty-day school year, or the instructional hours prescribed in
this section. The average daily membership of a part-time high
school student shall be 0.5 if the student is enrolled in an instructional
program of two subjects that meet at least three hundred sixty hours for a one
hundred eighty-day school year, or the instructional hours prescribed in
this section. The average daily membership of a part-time high
school student shall be 0.25 if the student is enrolled in an instructional
program of one subject that meets at least one hundred eighty hours for a one
hundred eighty-day school year, or the instructional hours prescribed in
this section. The hours in which a student is scheduled to attend a
high school during the regular school day shall be included in the calculation
of the average daily membership for that student.

(b) "Full-time student" means:

(i) For common schools, a student who is at least
six years of age before January 1 of a school year, who has not graduated from
the highest grade taught in the school district and who is regularly enrolled
in a course of study required by the state board of
education. First, second and third grade students or ungraded group
B children with disabilities who are at least five, but under six, years of age
by September 1 must be enrolled in an instructional program that meets for a total
of at least seven hundred twelve hours for a one hundred eighty-day
school year, or the instructional hours prescribed in this
section. Fourth, fifth, sixth, seventh and eighth grade students
must be enrolled in an instructional program that meets for a total of at least
eight hundred ninety hours for a one hundred eighty-day school year, or
the instructional hours prescribed in this section, including the equivalent
number of instructional hours for schools that operate on a one hundred forty-four-day
school year. The hours in which a student is scheduled to attend a
common school during the regular school day shall be included in the
calculation of the average daily membership for that student.

(ii) For high schools, a student who has not
graduated from the highest grade taught in the school district and who is
enrolled in at least an instructional program of four or more subjects that
count toward graduation as defined by the state board of education, each of
which, if taught each school day for the minimum number of days required in a
school year, would meet a minimum of one hundred twenty-three hours a
year, or the equivalent, that meets for a total of at least seven hundred
twenty hours for a one hundred eighty-day school year, or the
instructional hours prescribed in this section in a recognized high
school. A full-time student shall not be counted more than
once for computation of average daily membership. The average daily
membership of a full-time high school student shall be 1.0 if the student
is enrolled in at least four subjects that meet at least seven hundred twenty
hours for a one hundred eighty-day school year, or the equivalent
instructional hours prescribed in this section. The hours in which a
student is scheduled to attend a high school during the regular school day
shall be included in the calculation of the average daily membership for that
student.

(iii) If a child who has not reached five years of
age before September 1 of the current school year is admitted to kindergarten
and repeats kindergarten in the following school year, a school district or
charter school is not eligible to receive basic state aid on behalf of that
child during the child's second year of kindergarten. If a child who
has not reached five years of age before September 1 of the current school year
is admitted to kindergarten but does not remain enrolled, a school district or
charter school may receive a portion of basic state aid on behalf of that child
in the subsequent year. A school district or charter school may
charge tuition for any child who is ineligible for basic state aid pursuant to
this item.

(iv) Except as otherwise provided by law, for a full-time
high school student who is concurrently enrolled in two school districts or two
charter schools, the average daily membership shall not exceed 1.0.

(v) Except as otherwise provided by law, for any
student who is concurrently enrolled in a school district and a charter school,
the average daily membership shall be apportioned between the school district
and the charter school and shall not exceed 1.0. The apportionment
shall be based on the percentage of total time that the student is enrolled in
or in attendance at the school district and the charter school.

(vi) Except as otherwise provided by law, for any
student who is concurrently enrolled, pursuant to section 15-808, in a
school district and Arizona online instruction or a charter school and Arizona
online instruction, the average daily membership shall be apportioned between
the school district and Arizona online instruction or the charter school and
Arizona online instruction and shall not exceed 1.0. The
apportionment shall be based on the percentage of total time that the student
is enrolled in or in attendance at the school district and Arizona online
instruction or the charter school and Arizona online instruction.

(vii) For homebound or hospitalized, a student
receiving at least four hours of instruction per week.

(c) "Regular school day" means the
regularly scheduled class periods intended for instructional
purposes. Instructional purposes may include core subjects, elective
subjects, lunch, study halls, music instruction and other classes that advance
the academic instruction of pupils. Instructional purposes do not
include athletic practices or extracurricular clubs and activities.

2. "Budget year" means
the

a
fiscal year
that is both:

(
a
) A fiscal
year
for which the school district is budgeting
.

and

(
b
) One of the
two fiscal years
that immediately
follows

follow
the current year.

3. "Common school district" means a
political subdivision of this state offering instruction to students in
programs for preschool children with disabilities and kindergarten programs and
either:

(a) Grades one through eight.

(b) Grades one through nine pursuant to section 15-447.01.

4. "Current year" means the fiscal year in
which a school district is operating.

5. "Daily attendance" means:

(a) For common schools, days in which a pupil:

(i) Of a kindergarten program or ungraded, but not
group B children with disabilities, who is at least five, but under six, years
of age by September 1 attends at least three-quarters of the
instructional time scheduled for the day. If the total instruction
time scheduled for the year is at least three hundred fifty-six hours but
is less than seven hundred twelve hours, such attendance shall be counted as
one-half day of attendance. If the instructional time
scheduled for the year is at least six hundred ninety-two hours,
"daily attendance" means days in which a pupil attends at least one-half
of the instructional time scheduled for the day. Such attendance
shall be counted as one-half day of attendance.� A school district or
charter school may satisfy any of the time and hours requirements prescribed in
this item in any manner prescribed in the school district's or charter school's
instructional time model adopted under section 15-901.08.

(ii) Of the first, second or third grades attends
more than three-quarters of the instructional time scheduled for the
day. A school district or charter school may satisfy any of the time
and hours requirements prescribed in this item in any manner prescribed in the
school district's or charter school's instructional time model adopted under
section 15-901.08.

(iii) Of the fourth, fifth or sixth grades attends
more than three-quarters of the instructional time scheduled for the day,
except as provided in section 15-797. A school district or
charter school may satisfy any of the time and hours requirements prescribed in
this item in any manner prescribed in the school district's or charter school's
instructional time model adopted under section 15-901.08.

(iv) Of the seventh or eighth grades attends more
than three-quarters of the instructional time scheduled for the day,
except as provided in section 15-797. A school district or
charter school may satisfy any of the time and hours requirements prescribed in
this item in any manner prescribed in the school district's or charter school's
instructional time model adopted under section 15-901.08.

(b) For common schools, the attendance of a pupil at
three-quarters or less of the instructional time scheduled for the day
shall be counted as follows, except as provided in section 15-797 and
except that attendance for a fractional student shall not exceed the pupil's
fractional membership:

(i) If attendance for all pupils in the school is
based on quarter days, the attendance of a pupil shall be counted as one-fourth
of a day's attendance for each one-fourth of full-time
instructional time attended.� A school district or charter school may satisfy
any of the time and hours requirements prescribed in this item in any manner
prescribed in the school district's or charter school's instructional time
model adopted under section 15-901.08.

(ii) If attendance for all pupils in the school is
based on half days, the attendance of at least three-quarters of the
instructional time scheduled for the day shall be counted as a full day's
attendance and attendance at a minimum of one-half but less than three-quarters
of the instructional time scheduled for the day equals one-half day of
attendance. A school district or charter school may satisfy any of
the time and hours requirements prescribed in this item in any manner
prescribed in the school district's or charter school's instructional time
model adopted under section 15-901.08.

(c) For common schools, the attendance of a
preschool child with disabilities shall be counted as one-fourth day's
attendance for each thirty-six minutes of attendance, except as provided
in paragraph 1, subdivision (a), item (i) of this subsection for children with
disabilities up to a maximum of three hundred sixty minutes each
week. A school district or charter school may satisfy any of the
time and hours requirements prescribed in this subdivision in any manner
prescribed in the school district's or charter school's instructional time
model adopted under section 15-901.08.

(d) For high schools, the attendance of a pupil
shall not be counted as a full day unless the pupil is actually and physically
in attendance and enrolled in and carrying four subjects, each of which, if
taught each school day for the minimum number of days required in a school
year, would meet a minimum of one hundred twenty-three hours a year, or
the equivalent, that count toward graduation in a recognized high school except
as provided in section 15-797 and subdivision (e) of this paragraph.�
Attendance of a pupil carrying less than the load prescribed shall be
prorated. A school district or charter school may satisfy any of the
time and hours requirements prescribed in this subdivision in any manner
prescribed in the school district's or charter school's instructional time
model adopted under section 15-901.08.

(e) For high schools, the attendance of a pupil may
be counted as one-fourth of a day's attendance for each sixty minutes of
instructional time in a subject that counts toward graduation, except that
attendance for a pupil shall not exceed the pupil's full or fractional
membership. A school district or charter school may satisfy any of
the time and hours requirements prescribed in this subdivision in any manner
prescribed in the school district's or charter school's instructional time
model adopted under section 15-901.08.

(f) For homebound or hospitalized, a full day of
attendance may be counted for each day during a week in which the student
receives at least four hours of instruction. A school district or
charter school may satisfy any of the time and hours requirements prescribed in
this subdivision in any manner prescribed in the school district's or charter
school's instructional time model adopted under section 15-901.08.

(g) For school districts that maintain school for an
approved year-round school year operation, attendance shall be based on a
computation, as prescribed by the superintendent of public instruction, of the
one hundred eighty days' equivalency or two hundred days' equivalency, as
applicable, of instructional time as approved by the superintendent of public
instruction during which each pupil is enrolled. A school district
or charter school may satisfy any of the time and hours requirements prescribed
in this subdivision in any manner prescribed in the school district's or
charter school's instructional time model adopted under section 15-901.08.

6. "Daily route mileage" means the sum of:

(a) The total number of miles driven daily by all
buses of a school district while transporting eligible students from their
residence to the school of attendance and from the school of attendance to
their residence on scheduled routes approved by the superintendent of public
instruction.

(b) The total number of miles driven daily on routes
approved by the superintendent of public instruction for which a private party,
a political subdivision or a common or a contract carrier is reimbursed for
bringing an eligible student from the place of the student's residence to a
school transportation pickup point or to the school of attendance and from the
school transportation scheduled return point or from the school of attendance
to the student's residence. Daily route mileage includes the total number
of miles necessary to drive to transport eligible students from and to their
residence as provided in this paragraph.

7. "District support level" means the base
support level plus the transportation support level.

8. "Eligible
students" means:

(a) Students who are
transported by or for a school district and who qualify as full-time
students or fractional students, except students for whom transportation is
paid by another school district or a county school superintendent, and:

(i) For common school students, whose place of
actual residence within the school district is more than one mile from the
school facility of attendance or students who are admitted pursuant to section
15-816.01 and who meet the economic eligibility requirements established
under the national school lunch and child nutrition acts (42 United States Code
sections 1751 through 1793) for free or reduced-price lunches and whose actual
place of residence outside the school district boundaries is more than one mile
from the school facility of attendance.

(ii) For high school students, whose place of actual
residence within the school district is more than one and one-half miles
from the school facility of attendance or students who are admitted pursuant to
section 15-816.01 and who meet the economic eligibility requirements
established under the national school lunch and child nutrition acts
(42 United States Code sections 1751 through 1793) for free or reduced-price
lunches and whose actual place of residence outside the school district
boundaries is more than one and one-half miles from the school facility
of attendance.

(b) Kindergarten students, for purposes of computing
the number of eligible students under subdivision (a), item (i) of this
paragraph, shall be counted as full-time students, notwithstanding any
other provision of law.

(c) Children with disabilities, as defined by
section 15-761, who are transported by or for the school district or who
are admitted pursuant to chapter 8, article 1.1 of this title and who qualify
as full-time students or fractional students regardless of location or
residence within the school district or children with disabilities whose
transportation is required by the pupil's individualized education program.

(d) Students whose residence is outside the school
district and who are transported within the school district on the same basis
as students who reside in the school district.

9. "Enrolled" or "enrollment"
means that a pupil is currently registered in the school district.

10. "GDP price deflator" means the average
of the four implicit price deflators for the gross domestic product reported by
the United States department of commerce for the four quarters of the calendar
year.

11. "High school district" means a
political subdivision of this state offering instruction to students for grades
nine through twelve or that portion of the budget of a common school district
that is allocated to teaching high school subjects with permission of the state
board of education.

12. "Instructional hours" or
"instructional time" means hours or time spent pursuant to an
instructional time model adopted under section 15-901.08.

13. "Revenue control limit" means the base
revenue control limit plus the transportation revenue control limit.

14. "Student count" means average daily
membership as prescribed in this subsection for the fiscal year before the
current year, except that for the purpose of budget preparation student count
means average daily membership as prescribed in this subsection for the current
year.

15. "Submit electronically" means
submitted in a format and in a manner prescribed by the department of
education.

16. "Total bus mileage" means the total
number of miles driven by all buses of a school district during the school
year.

17. "Total students transported" means all
eligible students transported from their place of residence to a school
transportation pickup point or to the school of attendance and from the school
of attendance or from the school transportation scheduled return point to their
place of residence.

18. "Unified school district" means a
political subdivision of this state offering instruction to students in
programs for preschool children with disabilities and kindergarten programs and
grades one through twelve.

B. In this title, unless the context otherwise
requires:

1. "Base" means the revenue level per
student count specified by the legislature.

2. "Base level" means the following
amounts plus the percentage increase to the base level as provided in section
15-902.04:

(a) For fiscal year 2023-2024, $4,914.71.

(b) For fiscal year 2024-2025, $5,013.00.

(c) For fiscal year 2025-2026, $5,113.26.

3. "Base revenue control limit" means the
base revenue control limit computed as provided in section 15-944.

4. "Base support level" means the base
support level as provided in section 15-943.

5. "Certified teacher" means a person who
is certified as a teacher pursuant to the rules adopted by the state board of
education, who renders direct and personal services to schoolchildren in the
form of instruction related to the school district's educational course of
study and who is paid from the maintenance and operation section of the budget.

6. "DD" means programs for children with
developmental delays who are at least three years of age but under ten years of
age.� A preschool child who is categorized under this paragraph is not eligible
to receive funding pursuant to section 15-943, paragraph 2, subdivision
(b).

7. "ED, MIID, SLD, SLI and OHI" means
programs for children with emotional disabilities, mild intellectual
disabilities, a specific learning disability, a speech/language impairment and
other health impairments. A preschool child who is categorized as
SLI under this paragraph is not eligible to receive funding pursuant to section
15-943, paragraph 2, subdivision (b).

8. "ED-P" means programs for
children with emotional disabilities who are enrolled in private special
education programs as prescribed in section 15-765, subsection D,
paragraph 1 or in an intensive school district program as provided in section
15-765, subsection D, paragraph 2.

9. "ELL" means English learners who do not
speak English or whose native language is not English, who are not currently
able to perform ordinary classroom work in English and who are enrolled in an
English language education program pursuant to sections 15-751, 15-752
and 15-753.

10. "FRPL" means students who meet the
eligibility requirements established under the national school lunch and child
nutrition acts (42 United States Code sections 1751 through 1793) for free
or reduced-price lunches, or an equivalent measure recognized for
participating in the federal free and reduced-price lunch program and other
school programs dependent on a poverty measure, including the community
eligibility provision for which free and reduced-price lunch data is not
available.

11. "Full-time equivalent certified
teacher" or "FTE certified teacher" means for a certified
teacher the following:

(a) If employed
full time
full-time
as defined in section 15-501, 1.00.

(b) If employed less than
full time

full-time
, multiply 1.00 by the percentage of a full school
day, or its equivalent, or a full class load, or its equivalent, for which the
teacher is employed as determined by the governing board.

12. "G" means educational programs for
gifted pupils who score at or above the ninety-seventh percentile, based on
national norms, on a test adopted by the state board of education.

13. "Group A" means educational programs
for career exploration, a specific learning disability, an emotional
disability, a mild intellectual disability, remedial education, a
speech/language impairment, developmental delay, homebound pupils, bilingual
pupils and pupils with other health impairments.

14. "Group B" means educational
improvements for pupils in kindergarten programs and grades one through three,
educational programs for autism, a hearing impairment, a moderate intellectual
disability, multiple disabilities, multiple disabilities with severe sensory
impairment, orthopedic impairments, preschool severe delay, a severe
intellectual disability and emotional disabilities for school age pupils
enrolled in private special education programs or in school district programs for
children with severe disabilities or visual impairment, English learners
enrolled in a program to promote English language proficiency pursuant to
section 15-752 and students who meet the eligibility requirements
established under the national school lunch and child nutrition acts (42 United
States Code sections 1751 through 1793) for free or reduced-price
lunches, or an equivalent measure recognized for participating in the federal
free and reduced-price lunch program and other school programs dependent
on a poverty measure, including the community eligibility provision for which
free and reduced-price lunch data is not available.

15. "HI" means programs for pupils with
hearing impairment.

16. "Homebound" or
"hospitalized" means a pupil who is capable of profiting from
academic instruction but is unable to attend school due to illness, disease,
accident or other health conditions, who has been examined by a competent
medical doctor and who is certified by that doctor as being unable to attend
regular classes for a period of
not less than
at least
three school months or a pupil who is capable of
profiting from academic instruction but is unable to attend school regularly
due to chronic or acute health problems, who has been examined by a competent
medical doctor and who is certified by that doctor as being unable to attend
regular classes for intermittent periods of time totaling three school months
during a school year. The medical certification shall state the
general medical condition, such as illness, disease or chronic health
condition, that is the reason that the pupil is unable to attend
school. Homebound or hospitalized includes a student who is unable
to attend school for a period of less than three months due to a pregnancy if a
competent medical doctor, after an examination, certifies that the student is
unable to attend regular classes due to risk to the pregnancy or to the
student's health.

17. "K-3" means kindergarten
programs and grades one through three.

18. "K-3 reading" means reading
programs for pupils in kindergarten programs and grades one, two and three.

19. "MD-R, A-R and SID-R"
means resource programs for pupils with multiple disabilities, autism and
severe intellectual disability.

20. "MD-SC, A-SC and SID-SC"
means self-contained programs for pupils with multiple disabilities,
autism and severe intellectual disability.

21. "MD-SSI" means a program for
pupils with multiple disabilities with severe sensory impairment.

22. "MOID" means programs for pupils with
moderate intellectual disability.

23. "OI-R" means a resource program
for pupils with orthopedic impairments.

24. "OI-SC" means a self-contained
program for pupils with orthopedic impairments.

25. "PSD" means preschool programs for
children with disabilities as provided in section 15-771.

26. "P-SD" means programs for
children who meet the definition of preschool severe delay as provided in
section 15-771.

27. "Qualifying tax rate" means the
qualifying tax rate specified in section 15-971 applied to the assessed
valuation used for primary property taxes.

28. "Small isolated school district" means
a school district that meets all of the following:

(a) Has a student count of fewer than six hundred in
kindergarten programs and grades one through eight or grades nine through
twelve.

(b) Contains no school that is fewer than thirty
miles by the most reasonable route from another school, or, if road conditions
and terrain make the driving slow or hazardous, fifteen miles from another
school that teaches one or more of the same grades and is operated by another
school district in this state.

(c) Is designated as a small isolated school
district by the superintendent of public instruction.

29. "Small school district" means a school
district that meets all of the following:

(a) Has a student count of fewer than six hundred in
kindergarten programs and grades one through eight or grades nine through
twelve.

(b) Contains at least one school that is fewer than
thirty miles by the most reasonable route from another school that teaches one
or more of the same grades and is operated by another school district in this
state.

(c) Is designated as a small school district by the
superintendent of public instruction.

30. "Transportation revenue control limit"
means the transportation revenue control limit computed as prescribed in
section 15-946.

31. "Transportation support level" means
the support level for pupil transportation operating expenses as provided in
section 15-945.

32. "VI" means programs for pupils with
visual impairments.
END_STATUTE

Sec. 4. Section 15-905, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-905.

School district budgets; notice; adoption; aggregate budget
limit; summary; adjustments; impact aid fund; definition

A. Not later than July 5 of each year or not later
than the publication of notice of the public hearing and board meeting as
required by this section, the governing board of each school district shall
prepare and furnish to the superintendent of public instruction and the county
school superintendent, unless waived by the county school superintendent, a
proposed budget in an electronic format for the
budget year
next two fiscal years
, which shall contain the information and
be in the form as provided by the department of education.� The proposed budget
shall include the following:

1. The total amount of revenues from all sources
that was necessary to meet the school district's budget for the current year.

2. The total amount of revenues by source that will
be necessary to meet the proposed budget of the school district

for each budget year
, excluding property taxes. The governing board
shall prepare the proposed budget and a summary of the proposed budget. Both
documents shall be kept on file at the school district office and shall be made
available to the public on request. Not later than July 5 of each
year or not later than the publication of notice of the public hearing and
board meeting required by this subsection, the governing board shall submit the
proposed budget to the department of education, which shall prominently display
this information about that school district on the website maintained by the
department. If the school district maintains a website, the school
district shall post a link to the website of the department of education where
this information about the school district is posted.� The auditor general in
conjunction with the department of education shall prescribe the form of the summary
of the proposed budget for use by governing boards. School district
governing boards may include in the proposed budget any items or amounts that
are authorized by legislation filed with the secretary of state and that will
become effective during
the

each
budget
year. If subsequent events prevent the legislation from becoming
effective, school district governing boards must reduce their budgets by the
amounts budgeted pursuant to the legislation that did not become effective.

B. The governing board of each school district shall
prepare a notice fixing a time not later than July 15 and designating a public
place within each school district at which a public hearing and board meeting
shall be held. The governing board shall present the proposed budget
for consideration of the residents and the taxpayers of the school district at
that hearing and meeting.

C. The governing board of each school district shall
publish or mail, before the hearing and meeting, a copy of the proposed budget
or the summary of the proposed budget and a notice of the public hearing and
board meeting not later than ten days before the meeting. The
proposed budget and the summary of the proposed budget shall contain the
percentage of increase or decrease in each budget category of the proposed
budget as compared to each category of the budget for the current year.�
Notification shall be either by publication in a newspaper of general
circulation within the school district in which the size of the newspaper print
is at least eight-point type, by electronic transmission of the
information to the department of education for posting on the department's
website or by mailing the information to each household in the school
district.� The cost of publication, website posting or mailing shall be a
charge against the school district. The publisher's affidavit of publication
shall be filed by the governing board with the superintendent of public
instruction within thirty days after publication.� If the budget or proposed
budget and notice are posted on a website maintained by the department of
education or mailed, the board shall file an affidavit with the superintendent
of public instruction within thirty days after the mailing or the date that the
information is posted on the website. If a truth in taxation notice and hearing
is required under section 15-905.01, the governing board may combine the
notice and hearing under this section with the truth in taxation notice and
hearing.

D. At the time and place fixed in the notice, the
governing board shall hold the public hearing and present the proposed budget
to the persons attending the hearing. On request of any person, the
governing board shall explain the budget, and any resident or taxpayer of the
school district may protest the inclusion of any item. A governing
board member who has a substantial interest, as defined in section 38-502,
in a specific item in the school district budget shall refrain from voting on
the specific item. A governing board member may participate without
creating a conflict of interest in adopting a final budget even though the
member may have substantial interest in specific items included in the budget.

E. Immediately following the public hearing the
president shall call to order the governing board meeting for the purpose of
adopting the budget. The governing board shall adopt the budget,
which shall not exceed the general budget limit or the unrestricted capital
budget limit, making such deductions as
it

the governing board
sees fit but making no additions to the proposed
budget total for maintenance and operations or capital outlay, and shall enter
the budget as adopted in its minutes. Not later than July 18
of each year
, the budget as finally adopted shall be submitted
electronically to the superintendent of public instruction. Not
later than July 18
of each year
, the governing board
shall submit the budget as finally adopted to the department of education,
which shall prominently display this information about that school district on
the website maintained by the department. If the school district maintains
a website, the school district shall post a link to the website of the
department of education where this information about the school district is
posted. On or before October 30
of each year
,
the superintendent of public instruction shall review the budget and notify the
governing board if the budget exceeds the general budget limit or the
unrestricted capital budget limit. The governing board shall revise the budget
as follows:

1. If the governing board receives notification that
the budget exceeds the general budget limit or the unrestricted capital budget
limit by one percent of the general budget limit, it shall adopt on or before
December 15, after it gives notice and holds a public meeting in a similar
manner as provided in subsections C and D of this section, a revised budget for
the current year, which shall not exceed the general budget limit or the
unrestricted capital budget limit.

2. If the governing board receives notification that
the budget exceeds the general budget limit or the unrestricted capital budget
limit by less than the amount prescribed in paragraph 1 of this subsection, the
governing board shall adjust the budget and expenditures so as not to exceed
the general budget limit or the unrestricted capital budget limit for the
current year.

3. Not later than December 18, the budget as revised
shall be submitted electronically to the superintendent of public instruction.�
Procedures for adjusting expenditures or revising the budget shall be as
prescribed in the uniform system of financial records.

F. The governing board of each school district may
budget for expenditures within the school district budget as follows:

1. Amounts within the general budget limit, as
provided in section 15-947, subsection C, may only be budgeted in the
following sections of the budget:

(a) The maintenance and operation section.

(b) The capital outlay section.

2. Amounts within the unrestricted capital budget
limit, as provided in section 15-947, subsection D, may only be budgeted
in the unrestricted capital outlay subsection of the budget. Monies received
pursuant to the unrestricted capital budget limit shall be placed in the
unrestricted capital outlay fund. The monies in the fund are not
subject to reversion.

G. The governing board may authorize the expenditure
of monies budgeted within the maintenance and operation section of the budget
for any subsection within the section in excess of amounts specified in the
adopted budget only by action taken at a public meeting of the governing board
and if the expenditures for all subsections of the section do not exceed the
amount budgeted as provided in this section.

H. The aggregate budget limit
for
each budget year
is the sum of the following:

1. The general budget limit as determined in section
15-947 for
the
each
budget
year.

2. The unrestricted capital budget limit as
determined in section 15-947 for
the

each

budget year.

3. Federal assistance, excluding title VIII of the
elementary and secondary education act of 1965 monies.

I. School districts that overestimated tuition revenues
as provided in section 15-947, subsection C, paragraph 2 shall adjust the
general budget limit and expenditures based on tuition revenues for attendance
of nonresident pupils during the current fiscal year. School
districts that underestimated tuition revenues may adjust their budgets before
May 15 based on tuition revenues for attendance of nonresident pupils during
the current fiscal year. School districts that overestimated
revenues as provided in section 15-947, subsection C, paragraph 2, subdivision
(a), items (iii), (iv) and (v) and subdivision (c) shall adjust the general
budget limit and expenditures based on actual revenues during the current
fiscal year. School districts that underestimated such revenues may
adjust their budgets before May 15 based on actual revenues during the current
fiscal year. Procedures for completing adjustments shall be as
prescribed in the uniform system of financial records.� Not later than May 18,
the budget as adjusted shall be submitted electronically to the superintendent
of public instruction.

J. A common school district not within a high school
district whose estimated tuition charge for high school pupils exceeds the
actual tuition charge for high school pupils shall adjust the general budget
limit and expenditures based on the actual tuition charge.� Not later than May
18, the budget as adjusted shall be submitted electronically to the
superintendent of public instruction. A common school district not
within a high school district whose estimated tuition charge for high school
pupils is less than the actual tuition charge for high school pupils may adjust
its budget before May 15 based on the actual tuition charge.� Procedures for
completing adjustments shall be as prescribed in the uniform system of
financial records. If the adjusted general budget limit requires an
adjustment of state aid and if the adjustment to state aid is not made in the
current year, the superintendent of public instruction shall adjust by August
15 of the succeeding fiscal year the apportionment of state aid to the school
district to correct any overpayment or underpayment of state aid received
during the current year.

K. The governing board may include title VIII of the
elementary and secondary education act of 1965 assistance allocated for
children with disabilities, children with specific learning disabilities,
children residing on Indian lands and children residing within the boundaries
of an accommodation school that is located on a military reservation and that
is classified as a heavily impacted local educational agency pursuant to 20
United States Code section 7703, which is in addition to basic assistance when
determining the general budget limit as prescribed in section 15-947,
subsection C. The increase in the general budget limit for children
residing within the boundaries of an accommodation school that is located on a
military reservation and that is classified as a heavily impacted local
education agency shall equal the dollar amount calculated pursuant to 20 United
States Code section 7703(b)(2). The governing board may adjust
before May 15 the budget for the current year based on any adjustments that result
in increases over the amount estimated by the superintendent of public
instruction for title VIII of the elementary and secondary education act of
1965 assistance for such pupils for the fiscal year preceding the current
year. The governing board shall adjust before May 15 the budget for
the current year based on any adjustments that result in decreases in the
amount estimated by the superintendent of public instruction for title VIII of
the elementary and secondary education act of 1965 assistance for such pupils
for the fiscal year preceding the current year. Not later than May
18, the budget as adjusted shall be submitted electronically to the
superintendent of public instruction.� Procedures for complying with this
subsection shall be as prescribed in the uniform system of financial records.

L. The department of education shall notify the
state board of education if expenditures by any school district exceed the
general budget limit prescribed in section 15-947, subsection C, the
unrestricted capital budget limit, the school plant fund limits prescribed in
section 15-1102, subsection B, the maintenance and operation section of
the budget or the capital outlay section of the budget. If the
expenditures of any school district exceed these limits or sections of the
budget without authorization as provided in section 15-907, and if the
state board of education determines that the equalization assistance for
education received by the school district as provided in section 15-971
does not conform with statutory requirements, the state board of education
shall reduce the state aid for equalization assistance for education for the
school district computed as provided in section 15-971 during the fiscal
year subsequent to the fiscal year in which the excess equalization assistance
for education was received by an amount equal to the excess equalization
assistance for education, except that in case of hardship to the school
district, the superintendent of public instruction may approve reductions
partly in the first subsequent year and partly in the second subsequent
year. If the state board of education determines that the
equalization assistance for education received by the school district conforms
with statutory requirements, the state board of education shall not reduce the
district's equalization assistance for education pursuant to this subsection
but the district shall reduce the budget limits as required in subsection M of
this section. A school district that disagrees with the department
of education's determination regarding an excess expenditure under this
subsection may request a hearing before the state board of education.

M. The governing board of a school district shall
reduce the general budget limit or the unrestricted capital budget limit for
the year subsequent to the year in which the expenditures were in excess of the
applicable limit or section of the budget by the amount determined in
subsection L of this section, except that in case of hardship to the school
district, the superintendent of public instruction may approve reductions
partly in the first subsequent year and partly in the second subsequent
year. The reduction in the limit is applicable to each school
district that has exceeded the general budget limit, the unrestricted capital
budget limit or a section of the budget even if the reduction exceeds the state
aid for equalization assistance for education for the school district.

N. Except as provided in section 15-916,
no
a school district may not make an

expenditure
shall be made by any school district
for a
purpose not included in the budget or in excess of the aggregate budget limit
prescribed in this section, except that if
no
the school district has not adopted a
budget
has
been adopted
, from July 1 to July 15 the governing board may make
expenditures if the total of the expenditures does not exceed ten percent of
the prior year's aggregate budget limit.
the school
district shall include
any expenditures made from July 1 to July 15 and
before the adoption of the budget
shall be included
in the
total expenditures for the current year.�
No
A school DISTRICT may not make an
expenditure
shall
be made and no
or incur or create a
debt,
obligation or liability
shall be incurred or created
in
any year for any purpose itemized in the budget in excess of the amount
specified for the item irrespective of whether the school district at any time
has received or has on hand funds in excess of those required to meet the
expenditures, debts, obligations and liabilities provided for under the budget
except expenditures from cash controlled funds as defined by the uniform system
of financial records and except as provided in section 15-907 and
subsection G of this section. This subsection does not prohibit any
school district from prepaying insurance premiums, magazine subscriptions or
officiating services, or from prepaying any item that is normally prepaid
in order
to procure the service or to receive a discounted price
for the service, as prescribed by the uniform system of financial records.

O. The governing board of a school district that is
classified as a heavily impacted school district having twenty percent or more
pupils pursuant to 20 United States Code section 238(d)1(A) may determine its
eligibility to increase the amount that may be included in determining the
general budget limit as provided in subsection K of this section and may
increase the amount as follows:

1. For fiscal year 1988-1989:

(a) Multiply $1,094 by the number of children with
disabilities or children with specific learning disabilities, excluding
children who also reside on Indian lands, reported to the division of impact
aid, United States department of education in the district's application for
fiscal year 1987-1988.

(b) Multiply $547 by the number of children residing
on Indian lands, excluding children who have disabilities or also have specific
learning disabilities, reported to the division of impact aid, United States
department of education in the district's application for fiscal year 1987-1988.

(c) Multiply $1,914 by the number of children
residing on Indian lands who have disabilities or also have specific learning
disabilities reported to the division of impact aid, United States department
of education in the district's application for fiscal year 1987-1988.

(d) Add the amounts determined in subdivisions (a)
through (c) of this paragraph.

(e) If the amount of title VIII of the elementary
and secondary education act of 1965 assistance as provided in subsection K of
this section is less than the sum determined in subdivision (d) of this
paragraph, the district is eligible to use this subsection.

2. For budget years after 1988-1989, use
paragraph 1 of this subsection, but increase each dollar amount by the growth
rate for that year as prescribed by law, subject to appropriation and use the
number of children reported in the appropriate category for the current fiscal
year.

3. If the district is eligible to use this
subsection, subtract the amount of title VIII of the elementary and secondary
education act of 1965 assistance determined in subsection K of this section
from the sum determined in paragraph 1, subdivision (d) of this subsection. The
difference is the increase in the amount that may be included in determining
the general budget limit as provided in subsection K of this section, if
including this amount does not increase the district's primary tax rate for the
budget year. If the amount of title VIII of the elementary and secondary
education act of 1965 assistance determined in subsection K of this section is
adjusted for the current year, the increase determined in this paragraph shall
be recomputed using the adjusted amount and the recomputed increase shall be
reported to the department of education by May 15 on a form prescribed by the
department of education.

4. If a district uses this subsection, the district
is not required to adjust its budget for the current year based on adjustments
in the estimated amount of title VIII of the elementary and secondary education
act of 1965 assistance as provided in subsection K of this section.

P. A school district, except for an accommodation
school, that applies for title VIII of the elementary and secondary education
act of 1965 assistance during the current year may budget an amount for title
VIII of the elementary and secondary education act of 1965 administrative costs
for
the

each
budget
year. The amount budgeted for title VIII of the elementary and
secondary education act of 1965 administrative costs is exempt from the revenue
control limit and may not exceed an amount determined for
the
budgeted
each budget
year as follows:

1. Determine the minimum cost. The
minimum cost for fiscal year 1990-1991 is $2,343. For fiscal
year 1991-1992 and thereafter, the minimum cost is the minimum cost for
the prior year increased by the growth rate as prescribed by law, subject to
appropriation.

2. Determine the hourly rate. The hourly
rate for fiscal year 1990-1991 is $9.38. For fiscal year 1991-1992
and thereafter, the hourly rate is the hourly rate for the prior year increased
by the growth rate as prescribed by law, subject to appropriation.

3. Determine the title VIII of the elementary and
secondary education act of 1965 revenues available by subtracting the amount of
title VIII of the elementary and secondary education act of 1965 assistance
used to increase the general budget limit as provided in subsections K and O of
this section for the current fiscal year from the total amount of title VIII of
the elementary and secondary education act of 1965 revenues received in the
current fiscal year.

4. Determine the total number of administrative
hours as follows:

(a) Determine the sum of the following:

(i) 1.00 hours for each high impact pupil who is not
a person with a disability or does not have specific learning disabilities.

(ii) 1.25 hours for each high impact pupil who is a
person with a disability or has specific learning disabilities.

(iii) 0.25 hours for each low impact pupil who is
not a person with a disability or does not have specific learning disabilities.

(iv) 0.31 hours for each low impact pupil who is a
person with a disability or has specific learning disabilities.

(b) For the purposes of this paragraph:

(i) "High impact pupil" means a pupil who
resides on Indian lands or a pupil who resides on federal property or in low
rent housing and whose parent is employed on federal property or low rent
housing property or is on active duty in uniformed service, as provided in
title VIII of the elementary and secondary education act of 1965, section
8003(a) (20 United States Code section 7703) and as reported in the application
for title VIII of the elementary and secondary education act of 1965 assistance
in the current year.

(ii) "Low impact pupil" means a pupil who
resides on nonfederal property and has a parent who is employed on federal
property or low rent housing property or is on active duty in a uniformed
service or a pupil who resides on federal property or in low rent housing and
who does not have a parent who is employed on federal property or low rent
housing property or is on active duty in uniformed service, as provided in
title VIII of the elementary and secondary education act of 1965, section
8003(a) (20 United States Code section 7703) and as reported in the application
for title VIII of the elementary and secondary education act of 1965 assistance
in the current year.

5. Multiply the total number of administrative hours
determined in paragraph 4 of this subsection by the hourly rate determined in
paragraph 2 of this subsection.

6. Determine the greater of the minimum cost
determined in paragraph 1 of this subsection or the product determined in
paragraph 5 of this subsection.

7. Add to the amount
determined in paragraph 6 of this subsection the amount, if any, to be expended
by the school district in
the

each
budget
year through an intergovernmental agreement with other school districts or the
department of education to provide title VIII of the elementary and secondary
education act of 1965 technical assistance to participating districts.

8. Determine the lesser of the amount determined in
paragraph 7 of this subsection or the revenues available as determined in
paragraph 3 of this subsection
for each budget year
.

9. The amount determined in paragraph 8 of this
subsection is the maximum amount that may be budgeted for title VIII of the
elementary and secondary education act of 1965 administrative costs for
the

each
budget year as provided in this
subsection.

10. If the governing board underestimated the amount
that may be budgeted for title VIII of the elementary and secondary education
act of 1965, section 8007 administrative costs for the current year, the board
may adjust the general budget limit and the budget before May 15. If
the governing board overestimated the amount that may be budgeted for title
VIII of the elementary and secondary education act of 1965 administrative costs
for the current year, the board shall adjust the general budget limit and the
budget before May 15.

Q. If a school district governing board has adopted
a budget for a fiscal year based on forms and instructions provided by the
auditor general and the department of education for that fiscal year and if, as
a result of the enactment or nonenactment of proposed legislation after May 1
of the previous fiscal year, the budget is based on incorrect limits, does not
include items authorized by law or does not otherwise conform with law, the
governing board may revise its budget at a public hearing on or before September
15 to conform with the law. Not later than September 18, the budget
as adjusted shall be submitted electronically to the superintendent of public
instruction.� If the governing board does not revise the budget on or before
September 15 and if the budget includes any items not authorized by law or if
the budget exceeds any limits, the governing board shall adjust or revise the
budget as provided in subsection E of this section.

R. Notwithstanding any other law, if a school
district receives assistance pursuant to title VIII of the elementary and
secondary education act of 1965, the school district shall establish a local
level fund designated as the impact aid fund and deposit the impact aid monies
received in the fund.� The school district shall separately account for monies
in the fund and shall not combine monies in the fund with any other source of
local, state or federal assistance.� Monies in the fund shall be expended pursuant
to federal law only for the purposes allowed by this title. The
school district shall account for monies in the fund according to the uniform
system of financial records as prescribed by the auditor
general. The superintendent of public instruction shall separately
account for monies in each school district's impact aid fund, if an impact aid
fund is established, in the annual report required by section 15-255.�
Monies in the fund are considered federal monies and are not subject to
legislative appropriation.

S. For the purposes of this section, "title
VIII of the elementary and secondary education act of 1965 assistance"
means, for the current year, an amount equal to the final determination of
title VIII of the elementary and secondary education act of 1965 assistance for
the fiscal year preceding the current year as confirmed by the division of
impact aid, United States department of education or, if a final determination
has not been made, the amount estimated by the superintendent of public
instruction as confirmed by the division of impact aid, United States
department of education and, for
the

each
budget
year, an amount equal to the determination of title VIII of the elementary and
secondary education act of 1965 assistance for the fiscal year preceding the
budget year as estimated by the superintendent of public instruction.
END_STATUTE

Sec. 5. Section 15-915, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-915.

Correction of state aid or budget limit errors; definition

A. If the superintendent of public instruction
determines that the calculation of state aid for a school district or charter
school or the calculation of the school district's or charter school's budget
limits within the previous three years did not conform with statutory
requirements, the superintendent shall require correction of the errors as
follows:

1. Corrections may be made in the current year or in
the budget year
immediately following the current year
,
except that in case of hardship to the school district, the superintendent may
approve corrections partly in one year and partly in the year after that year.

2. Errors in the calculation of state aid shall be
corrected by increasing or decreasing the state aid to the school district or
charter school in the year or years in which the correction is made.

3. Errors in the calculation of the school
district's or charter school's budget limits shall be corrected at a public
hearing by requiring the governing board to reduce or by allowing it to
increase its budget by the amount of the correction to be made that
year. Overbudgeting errors corrected as provided in this paragraph
are exempt from section 15-905, subsections L and M. Not later
than three days after the hearing and correction, the budget as revised shall
be submitted electronically to the superintendent of public
instruction. This paragraph does not require a decrease in state aid
that is not otherwise required by paragraph 2 of this subsection.

B. Subject to the review by the joint legislative
budget committee, the superintendent of public instruction shall adjust state
aid for a school district in the current year if the governing board of a
school district requests the recalculation of state aid for a prior year due to
a change in assessed valuation that occurred as the result of any of the
following:

1. A court judgment in accordance with section 42-16213.

2. A decision by a county board of equalization in
accordance with section 42-16108.

3. A decision by the state board of equalization in
accordance with section 42-16162.

4. The correction of a property tax error pursuant
to title 42, chapter 16, article 6.

C. Notwithstanding subsection A of this section, a
school district or charter school may not make upward revisions to its average
daily membership counts for a particular school year after June 30 of the
subsequent school year.

D. For the purposes
of this section, "state aid":

1. For school
districts, means state aid as determined in section 15-971 and additional
state aid as determined in section 15-972.

2. For charter schools, means state aid as
determined in section 15-185.
END_STATUTE