school security projects; capital finance

SB1639 - 572R - I Ver

REFERENCE TITLE:
school security projects; capital finance

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SB 1639

Introduced by

Senator
Payne

AN
ACT

amending sections 15-342, 41-5731
and 41-5741, Arizona Revised Statutes; relating to school facilities.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Section 15-342, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-342.

Discretionary powers

The governing board
of a school district
may:

1. Expel pupils for misconduct.

2. Exclude from grades one through eight children
who are
under six years of age.

3. Make such separation of groups of pupils as
it
the governing board
deems advisable.

4. Maintain such special schools during vacation as
deemed necessary for the benefit of the pupils of the school district.

5. Allow a superintendent or principal or
representatives of the superintendent or principal to travel for a school
purpose, as determined by a majority vote of the board. The board
may allow members and members-elect of the board to travel within or
without the school district for a school purpose and receive
reimbursement. Any expenditure for travel and subsistence pursuant
to this paragraph shall be as provided in title 38, chapter 4, article 2. The
designated post of duty referred to in section 38-621 shall be construed,
for school district governing board members, to be the member's actual place of
residence, as opposed to the school district office or the school district
boundaries.� Such expenditures shall be a charge against the budgeted school
district funds. The governing board of a school district shall prescribe
procedures and amounts for reimbursement of lodging and subsistence expenses.
Reimbursement amounts shall not exceed the maximum amounts established pursuant
to section 38-624, subsection C.

6. Construct or provide in rural districts housing
facilities for teachers and other school employees that the board determines
are necessary to operate the school.

7. Sell or lease to the state, a county, a city,
another school district or a tribal government agency any school property
required for a public purpose if the sale or lease of the property will not
affect the normal operations of a school within the school district.

8. Annually budget and spend monies for membership
in an association of school districts within this state.

9. Enter into leases or lease-purchase
agreements for school buildings or grounds, or both, as lessor or as lessee,
for periods of less than twenty years subject to voter approval for
construction of school buildings as prescribed in section 15-341,
subsection A, paragraph 7.

10. Subject to title 41, chapter 56, sell school
sites or enter into leases or lease-purchase agreements for school
buildings and grounds, as lessor or as lessee, for a period of twenty years or
more, but not to exceed ninety-nine years, if authorized by a vote of the
school district electors in an election called by the governing board as
provided in section 15-491, except that authorization by the school
district electors in an election is not required if one of the following
requirements is met:

(a) The market value of the school property is less
than $50,000 or the property is procured through a renewable energy development
agreement, an energy performance contract, which among other items includes a
renewable energy power service agreement, or a simplified energy performance
contract pursuant to section 15-213.01.

(b) The buildings and sites are completely funded
with monies distributed by the
school facilities
division
of school facilities
within the department of administration or
at the direction of the school facilities oversight board, or its predecessor.

(c) The transaction involves the sale of improved or
unimproved property pursuant to an agreement with the school facilities
oversight board in which the school district agrees to sell the improved or
unimproved property and transfer the proceeds of the sale to the school
facilities oversight board in exchange for monies from the school facilities
oversight board for the acquisition of a more suitable school
site. For a sale of property acquired by a school district before
July 9, 1998, a school district shall transfer to the school facilities
oversight board that portion of the proceeds that equals the cost of the
acquisition of a more suitable school site.� If there are any remaining
proceeds after the transfer of monies to the school facilities oversight board,
a school district shall only use those remaining proceeds for future land
purchases approved by the school facilities oversight board, or for capital
improvements not funded by the school facilities oversight board for any
existing or future facility.

(d) The transaction involves the sale of improved or
unimproved property pursuant to a formally adopted plan and the school district
uses the proceeds of this sale to purchase other property that will be used for
similar purposes as the property that was originally sold if the sale proceeds
of the improved or unimproved property are used within two years after the date
of the original sale to purchase the replacement property. If the
sale proceeds of the improved or unimproved property are not used within two
years after the date of the original sale to purchase replacement property, the
sale proceeds shall be used toward paying any outstanding bonded
indebtedness. If any sale proceeds remain after paying for
outstanding bonded indebtedness, or if the district has no outstanding bonded
indebtedness, sale proceeds shall be used to reduce the district's primary tax
levy. A school district shall not use this subdivision unless all of
the following conditions exist:

(i) The school district is the sole owner of the
improved or unimproved property that the school district intends to sell.

(ii) The school district did not purchase the
improved or unimproved property that the school district intends to sell with
monies that were distributed pursuant to title 41, chapter 56.

(iii) The transaction does not violate section 15-341,
subsection G.

11. Review the decision of a teacher to promote a
pupil to a grade or retain a pupil in a grade in a common school or to pass or
fail a pupil in a course in high school. The pupil has the burden of
proof to overturn the decision of a teacher to promote, retain, pass or fail
the pupil.� In order to sustain the burden of proof, the pupil shall
demonstrate to the governing board that the pupil has mastered the academic
standards adopted by the state board of education pursuant to sections 15-701
and 15-701.01.� If the governing board overturns the decision of a
teacher pursuant to this paragraph, the governing board shall adopt a written
finding that the pupil has mastered the academic
standards. Notwithstanding title 38, chapter 3, article 3.1, the
governing board shall review the decision of a teacher to promote a pupil to a
grade or retain a pupil in a grade in a common school or to pass or fail a
pupil in a course in high school in executive session unless a parent or legal
guardian of the pupil or the pupil, if emancipated, disagrees that the review
should be conducted in executive session and then the review shall be conducted
in an open meeting.� If the review is conducted in executive session, the board
shall notify the teacher of the date, time and place of the review and shall
allow the teacher to be present at the review. If the teacher is not
present at the review, the board shall consult with the teacher before making
its decision. Any request, including the written request as provided
in section 15-341, the written evidence presented at the review and the
written record of the review, including the decision of the governing board to
accept or reject the teacher's decision, shall be retained by the governing
board as part of its permanent records.

12. Provide transportation or site transportation
loading and unloading areas for any child or children if deemed
for
in
the best interest of the district, whether within or
without the district, county or state.

13. Enter into intergovernmental agreements and
contracts with school districts or other governing bodies as provided in
section 11-952.� Intergovernmental agreements and contracts between
school districts or between a school district and other governing bodies as
provided in section 11-952 are exempt from competitive bidding under the
procurement rules adopted by the state board of education pursuant to section
15-213.

14. Include in the curricula
it
the governing board
prescribes for high schools in the school
district career and technical education, vocational education and technology
education programs and career and technical, vocational and technology program
improvement services for the high schools, subject to approval by the state
board of education. The governing board may contract for the
provision of career and technical, vocational and technology education as
provided in section 15-789.

15. Suspend a teacher or administrator from the
teacher's or administrator's duties without pay for a period of time of not
to exceed
more than
ten school days
,
if the board determines that suspension is warranted
pursuant to section 15-341, subsection A, paragraph 21 or 22.

16. Dedicate school property within an incorporated
city or town to that city or town or within a county to that county for use as
a public right-of-way if both of the following apply:

(a) Pursuant to an ordinance adopted by the city,
town or county, there will be conferred on the school district privileges and
benefits that may include benefits related to zoning.

(b) The dedication will not affect the normal
operation of any school within the district.

17. Enter into option agreements for the purchase of
school sites.

18. Donate surplus or outdated learning materials,
educational equipment and furnishings to nonprofit community organizations if
the governing board determines that the anticipated cost of selling the
learning materials, educational equipment or furnishings equals or exceeds the
estimated market value of the materials.

19. Prescribe policies to assess reasonable fees for
students to use district-provided parking facilities. The fees
are to be applied by the district solely against costs incurred in operating or
securing the parking facilities.� Any policy adopted by the governing board
pursuant to this paragraph shall include a fee waiver provision in appropriate
cases of need or economic hardship.

20. Establish alternative education programs that
are consistent with the laws of this state to educate pupils, including pupils
who have been reassigned pursuant to section 15-841, subsection E or F.

21. Require a period of silence to be observed at
the commencement of the first class of the day in the schools. If a
governing board chooses to require a period of silence to be observed, the
teacher in charge of the room in which the first class is held shall announce
that a period of silence not to exceed one minute in duration will be observed
for meditation, and during that time no activities shall take place and silence
shall be maintained.

22. Require students to wear uniforms.

23. Exchange unimproved property or improved
property, including school sites, if the governing board determines that the
improved property is unnecessary for the continued operation of the school
district without requesting authorization by a vote of the school district
electors and if the governing board determines that the exchange is necessary
to protect the health, safety or welfare of pupils or if the governing board
determines that the exchange is based on sound business principles for either:

(a) Unimproved or improved property of equal or
greater value.

(b) Unimproved property that the owner contracts to
improve if the value of the property ultimately received by the school district
is of equal or greater value.

24. For common and high school pupils, assess
reasonable fees for optional extracurricular activities and programs conducted
when the common or high school is not in session, except that fees shall not be
charged for pupils' access to or use of computers or related materials.� For
high school pupils, the governing board may assess reasonable fees for fine
arts and vocational education courses and for optional services, equipment and
materials offered to the pupils beyond those required to successfully complete
the basic requirements of any other course, except that fees shall not be
charged for pupils' access to or use of computers or related materials. Fees
assessed pursuant to this paragraph shall be adopted at a public meeting after
notice has been given to all parents of pupils enrolled at schools in the
district and shall not exceed the actual costs of the activities, programs,
services, equipment or materials. The governing board shall
authorize principals to waive the assessment of all or part of a fee assessed
pursuant to this paragraph if it creates an economic hardship for a
pupil. For the purposes of this paragraph, "extracurricular
activity" means any optional, noncredit, educational or recreational
activity that supplements the education program of the school, whether offered
before, during or after regular school hours.

25. Notwithstanding section 15-341, subsection
A, paragraphs 7 and 9, construct school buildings and purchase or lease school
sites, without a vote of the school district electors, if the buildings and
sites are totally funded from one or more of the following:

(a) Monies in the unrestricted capital outlay fund,
except that the estimated cost shall not exceed $250,000 for a district that
uses section 15-949.

(b) Monies distributed at the direction of the
school facilities oversight board established by section 41-5701.02 or by
the
school facilities
division
of school
facilities
within the department of administration pursuant to title 41,
chapter 56.

(c) Monies specifically donated for the purpose of
constructing school buildings.

This paragraph does not eliminate the
requirement for an election to raise revenues for a capital outlay override
pursuant to section 15-481 or a bond election pursuant to section 15-491.

26. Conduct a background investigation that includes
a fingerprint check conducted pursuant to section 41-1750, subsection G
for certificated personnel and personnel who are not paid employees of the
school district, as a condition of employment. A school district may
release the results of a background check to another school district for
employment purposes.� The school district may charge the costs of fingerprint
checks to its fingerprinted employee, except that the school district may not
charge the costs of fingerprint checks for personnel who are not paid employees
of the school district.

27. Unless otherwise prohibited by law, sell
advertising as follows:

(a) Advertisements shall be age appropriate and not
promote any substance that is illegal for minors such as alcohol, tobacco and
drugs or gambling.� Advertisements shall comply with the state sex education
policy of abstinence.

(b) Advertising approved by the governing board for
the exterior of school buses may appear only on the sides of the bus in the
following areas:

(i) The signs shall be below the seat level rub rail
and not extend above the bottom of the side windows.

(ii) The signs shall be at least three inches from
any required lettering, lamp, wheel well or reflector behind the service door
or stop signal arm.

(iii) The signs shall not extend from the body of
the bus so as to allow a handhold or present a danger to pedestrians.

(iv) The signs shall not interfere with the
operation of any door or window.

(v) The signs shall not be placed on any emergency
doors.

(c) The school district shall establish an
advertisement fund that is composed of revenues from the sale of
advertising. The monies in an advertisement fund are not subject to
reversion.

28. Assess reasonable damage deposits to pupils in
grades seven through twelve for using textbooks, musical instruments, band
uniforms or other equipment required for academic courses. The
governing board shall adopt policies on any damage deposits assessed pursuant
to this paragraph at a public meeting called for this purpose after providing
notice to all parents of pupils in grades seven through twelve in the school
district.� Principals of individual schools within the district may waive the
damage deposit requirement for any textbook or other item if the payment of the
damage deposit would create an economic hardship for the pupil. The
school district shall return the full amount of the damage deposit for any
textbook or other item if the pupil returns the textbook or other item in
reasonably good condition within the time period prescribed by the governing
board. For the purposes of this paragraph, "in reasonably good
condition" means the textbook or other item is in the same or a similar
condition as it was when the pupil received it, plus ordinary wear and tear.

29. Notwithstanding section 15-1105,
expend
spend
surplus monies in the civic
center school fund for maintenance and operations or unrestricted capital
outlay if sufficient monies are available in the fund after meeting the needs
of programs established pursuant to section 15-1105.

30. Notwithstanding section 15-1143, spend
surplus monies in the community school program fund for maintenance and
operations or unrestricted capital outlay if sufficient monies are available in
the fund after meeting the needs of programs established pursuant to section 15-1142.

31. Adopt guidelines to standardize the format of
the school report cards required by section 15-746 for schools within the
district.

32. Adopt policies that require parental
notification when a law enforcement officer interviews a pupil on school
grounds. Policies adopted pursuant to this paragraph shall not
impede a peace officer from performing the peace officer's
duties. If the school district governing board adopts a policy that
requires parental notification:

(a) The policy may provide reasonable exceptions to
the parental notification requirement.

(b) The policy shall set forth whether and under
what circumstances a parent may be present when a law enforcement officer
interviews the pupil, including reasonable exceptions to the circumstances
under which a parent may be present when a law enforcement officer interviews
the pupil, and shall specify a reasonable maximum time after a parent is
notified that an interview of a pupil by a law enforcement officer may be
delayed to allow the parent to be present.

33. Enter into voluntary partnerships with any party
to finance with monies other than school district monies and cooperatively
design school facilities that comply with the adequacy standards prescribed in
section 41-5711
,

and
that

comply with
the square footage per
pupil requirements pursuant to section 41-5741, subsection D, paragraph
3, subdivision (b)
and that include security equipment and
features that are designed to prevent individuals from entering a school
building without authorization
. The design plans and location
of any such school facility shall be submitted to the school facilities
oversight board for approval pursuant to section 41-5741, subsection
0. If the school facilities oversight board approves the design
plans and location of any such school facility, the party in partnership with
the school district may cause to be constructed and the district may begin
operating the school facility before monies are distributed at the direction of
the school facilities oversight board pursuant to section 41-5741. Monies
distributed from the new school facilities fund to a school district in a
partnership with another party to finance and design the school facility shall
be paid to the school district pursuant to section 41-5741. The
school district shall reimburse the party in partnership with the school
district from the monies paid to the school district pursuant to section 41-5741,
in accordance with the voluntary partnership agreement. Before the
school facilities oversight board directs the distribution of any monies
pursuant to this subsection, the school district shall demonstrate to the
school facilities oversight board that the facilities to be funded pursuant to
section 41-5741, subsection O meet the minimum adequacy standards
prescribed in section 41-5711. If the cost to construct the
school facility exceeds the amount that the school district receives from the
new school facilities fund, the partnership agreement between the school
district and the other party shall specify that, except as otherwise provided
by the other party, any such excess costs shall be the responsibility of the
school district. The school district governing board shall adopt a
resolution in a public meeting that an analysis has been conducted on the prospective
effects of the decision to operate a new school with existing monies from the
school district's maintenance and operations budget and how this decision may
affect other schools in the school district. If a school district
acquires land by donation at an appropriate school site approved by the school
facilities oversight board and a school facility is financed and built on the
land pursuant to this paragraph, the school facilities oversight board shall
direct the distribution of an amount equal to twenty percent of the fair market
value of the land that can be used for academic purposes. The school
district shall place the monies in the unrestricted capital outlay fund and
increase the unrestricted capital budget limit by the amount of the monies
placed in the fund. Monies distributed under this paragraph shall be
distributed from the new school facilities fund pursuant to section 41-5741. If
a school district acquires land by donation at an appropriate school site
approved by the school facilities oversight board and a school facility is
financed and built on the land pursuant to this paragraph, the school district
shall not receive monies for the donation of real property pursuant to section
41-5741, subsection F. It is unlawful for:

(a) A county, city or town to require as a condition
of any land use approval that a landowner or landowners that entered into a
partnership pursuant to this paragraph provide any contribution, donation or
gift, other than a site donation, to a school district. This
subdivision only applies to the property in the voluntary partnership agreement
pursuant to this paragraph.

(b) A county, city or town to require as a condition
of any land use approval that the landowner or landowners located within the
geographic boundaries of the school subject to the voluntary partnership
pursuant to this paragraph provide any donation or gift to the school district
except as provided in the voluntary partnership agreement pursuant to this
paragraph.

(c) A community facilities district established
pursuant to title 48, chapter 4, article 6 to be used for reimbursement of
financing the construction of a school pursuant to this paragraph.

(d) A school district
to enter into an agreement pursuant to this paragraph with any party other than
a master planned community party.� Any land area consisting of at least three
hundred twenty acres that is the subject of a development agreement with a
county, city or town entered into pursuant to section 9-500.05 or 11-1101
shall be deemed to be a master planned community. For the purposes
of this subdivision, "master planned community" means a land area
consisting of at least three hundred twenty acres, which may be noncontiguous,
that is the subject of a zoning ordinance approved by the governing body of the
county, city or town in which the land is located that establishes the use of
the land area as a planned area development or district, planned community
development or district, planned unit development or district or other land use
category or district that is recognized in the local ordinance of such county,
city or town and that specifies the use of such land is for a master planned
development.

34. Enter into an intergovernmental agreement with a
presiding judge of the juvenile court to implement a law-related education
program as defined in section 15-154. The presiding judge of
the juvenile court may assign juvenile probation officers to participate in a
law-related education program in any school district in the
county. The cost of juvenile probation officers who participate in
the program implemented pursuant to this paragraph shall be funded by the
school district.

35. Offer to sell outdated learning materials,
educational equipment or furnishings at a posted price commensurate with the
value of the items to pupils who are currently enrolled in that school district
before those materials are offered for public sale.

36. If the school district is a small school
district as defined in section 15-901, and if allowed by federal law, opt
out of federal grant opportunities if the governing board determines that the
federal requirements impose unduly burdensome reporting requirements.

37. Prescribe and enforce policies and procedures
for the emergency administration of inhalers by trained employees of the school
district and nurses who are under contract with the school district pursuant to
section 15-158.

38. Develop policies and procedures to allow
principals to budget for or assist with budgeting federal, state and local
monies.

39. Subject to article IX, section 7, Constitution
of Arizona, the laws pertaining to travel and subsistence, gifts, grants,
including federal grants, or devises and policies adopted by the department of
education, provide food and beverages at school district events, including
official school functions and trainings.
END_STATUTE

Sec. 2. Section 41-5731, Arizona Revised Statutes, is amended to read:

START_STATUTE
41-5731.

Building renewal grant fund; primary building renewal projects;
school building security projects; rules; annual report; definitions

A. The building renewal grant fund is established
consisting of monies appropriated to the fund by the legislature.� The division
shall administer the fund and distribute monies to school districts for the
purpose
purposes
of maintaining the
adequacy of existing school facilities
and improving the
security of school buildings
. Monies in the fund are exempt
from the provisions of section 35-190 relating to lapsing of
appropriations.

B. The division shall distribute monies from the
building renewal grant fund based on grant requests from school districts
and shall prioritize requests from school districts for grants

to fund primary building renewal projects.
The
division shall prioritize
project requests
shall be
prioritized by the division, with priority given to

for
primary building renewal projects by
school districts that have provided
routine preventive maintenance on the facility. A school district
must submit a preventive maintenance plan to the division to be eligible to
receive monies from the building renewal grant fund
for a
primary building renewal project
.
if
sufficient monies are AVAILABLE after awarding grants for all eligible primary
building renewal projects, the division may award grants to fund school
building security projects and shall prioritize a request for a school building
security project for a school district that is submitted after the school
district consults with a law enforcement agency.�
The division shall
approve only projects that will be completed within twelve months, unless
similar projects on average take longer to complete. A grant issued
under this section expires twelve months after the grant request is approved
unless the division issues an extension, except that if the division approves a
project and determines that similar projects on average take longer than twelve
months to complete, the division shall extend the grant expiration date based
on the average amount of time that similar projects take to
complete. The division shall establish a process by which a school
district may request an extension under this subsection. On
expiration of a grant, a school district shall return any building renewal
grant fund monies that the school district has not spent to the division for
deposit in the building renewal grant fund.� The division may spend monies from
the fund for assessments to determine whether a grant from the fund is
warranted under this section.

C. School districts that receive monies from the
building renewal grant fund shall use these monies on projects for buildings or
any part of a building in the division's database for
the
following purposes:

1. If the school district receives
monies for a primary building renewal project, for
any of the following:

1.

(
a
)
Major renovations and repairs to a building that
is used for student instruction or other academic purposes.

2.

(
b
)
Upgrading systems and areas that will maintain or
extend the useful life of the building.

3.

(
c
)
Infrastructure costs.

2. If the school district receives
monies for a school building security project, for security equipment or
improvements, or a combination of security equipment and improvements, that are
designed to prevent individuals from entering a school building without
authorization.�

D. Monies received from the fund shall not be used
for any of the following purposes:

1. New construction.

2. Remodeling interior space for aesthetic or
preferential reasons.

3. Exterior beautification.

4. Demolition.

5. Routine preventive maintenance.

6. Any project in a building, or part of a building,
that is being leased to another entity.

E. Accommodation schools are not eligible for monies
from the building renewal grant fund.

F. If the division or a court of competent
jurisdiction determines that a school district received monies from the
building renewal grant fund that must be reimbursed to the division due to
legal action associated with improper construction by a hired contractor, the
school district shall reimburse the division an agreed-on amount for deposit
into
in
the building renewal grant fund.

G. The division shall categorize each
primary building renewal
project that is eligible for monies
from the building renewal grant fund as either critical or
noncritical. The division shall adopt policies and procedures to
prioritize critical projects and to designate critical projects as projects
that immediately impact student safety or building closures or that result in
operational disruptions. Critical projects have priority over any
previously approved noncritical projects.

H. If the division determines that sufficient monies
are not available for a noncritical project that the division has approved, the
division shall notify the school district that submitted the project request
that monies will be distributed from the building renewal grant fund for the
project only if the legislature appropriates sufficient monies. If
sufficient monies are not available in the fiscal year in which the project is
awarded for a noncritical project, the noncritical project does not receive
priority in the next fiscal year.

I. Building renewal grants pursuant to this section
shall be used only for
primary building renewal
projects
that serve an academic purpose
or for school building security
projects
.

J. The division shall
do both of the following:

1. Implement policies
and procedures to require a school district to report the preventive
maintenance activities completed during the previous twelve months for the
facility for which the monies are being requested.

2. Submit a monthly report to the school facilities
oversight board that details how monies from the building renewal grant fund
have been distributed.

K. In addition to establishing a project eligibility
assessment under section 41-5702, subsection A, paragraph 5, subdivision
(b), the division shall adopt rules regarding both of the following:

1. The approval of building renewal grants pursuant
to this section.

2. Time frames for the division regarding all of the
following with respect to this section:

(a) Approving or denying grant requests for critical
projects.

(b) Notifying an applicant if the applicant's
application is incomplete.

(c) Providing regular updates to applicants
regarding completed applications.

(d) Distributing monies from the building renewal
grant fund.

L. The board shall review all policies and
procedures that the division develops to administer this section.

M. The division may spend monies from the fund for
assessments to determine
if
whether

a grant from the fund is warranted under this section.

N. On or before June 30 of each year, the division
shall submit a report to the joint legislative budget committee and the
governor's office of strategic planning and budgeting on any unobligated monies
in the building renewal grant fund.�

O. For the purposes of this section:

1. "Primary building renewal projects"
means projects that are necessary for buildings owned by school districts that
are required to meet the minimum adequacy standards for student capacity and
that fall below the minimum school facility adequacy guidelines, as adopted by
the board pursuant to section 41-5711, for school districts that have
provided routine preventive maintenance to the school facility.

2. "Routine preventive maintenance" means
services that are performed on a regular schedule at intervals ranging from
four times a year to once every three years, or on the schedule of services
recommended by the manufacturer of the specific building system or equipment,
and that are intended to extend the useful life of a building system and reduce
the need for major repairs.

3. "Student capacity" has the same meaning
prescribed in section 41-5711.
END_STATUTE

Sec. 3. Section 41-5741, Arizona Revised Statutes, is amended to read:

START_STATUTE
41-5741.

New school facilities fund; capital plan; reporting requirements

A. The new school facilities fund is established
consisting of monies appropriated by the legislature and monies credited to the
new school facilities fund pursuant to section 37-221. The
division shall administer the new school facilities fund and, at the direction
of the school facilities oversight board, shall distribute monies, as a
continuing appropriation, to school districts for the purpose of constructing
new school facilities and for contracted expenses pursuant to section 41-5702,
subsection B, paragraphs 2, 3 and 4.

B. The school facilities oversight board shall
prescribe a uniform format for use by the school district governing board in
developing and annually updating a capital plan that consists of each of the
following:

1. Enrollment projections for the next five years
for elementary schools and eight years for middle and high schools, including a
description of the methods used to make the projections.

2. A description of new schools or additions to
existing schools needed to meet the building adequacy standards prescribed in
section 41-5711. The description shall include:

(a) The grade levels and the total number of pupils
that the school or addition is intended to serve.

(b) The year in which it is necessary for the school
or addition to begin operations.

(c) A timeline that shows the planning and
construction process for the school or addition.

3. Long-term projections of the need for land
for new schools.

4. Any other necessary information required by the
school facilities oversight board to evaluate a school district's capital plan.

5. If a school district pays tuition for all or a
portion of the school district's high school pupils to another school district,
the capital plan shall indicate the number of pupils for which the district
pays tuition to another district. If a school district accepts
pupils from another school district pursuant to section 15-824,
subsection A, the school district shall indicate the projections for this
population separately. This paragraph does not apply to a small
isolated school district as defined in section 15-901.

C. If the capital plan indicates a need for a new
school or an addition to an existing school within the next four years or a
need for land within the next ten years, the school district shall submit its
plan to the school facilities oversight board on or before September 1 and
shall request monies from the new school facilities fund for the new
construction or land. The board may require a school district to
sell land that was previously purchased entirely with monies provided by the
board if the board determines that the property is no longer needed within the
ten-year period specified in this subsection for a new school or no
longer needed within that ten-year period for an addition to an existing
school. Monies provided for land are in addition to any monies
provided pursuant to subsection D of this section.

D. At the direction of the board, the division shall
distribute monies from the new school facilities fund for additional square
footage as follows:

1. The board shall review and evaluate the
enrollment projections. On or before December 15 of each year,
following the submission of the enrollment projections, the board shall either
approve the projections as submitted or revise the projections. In
approving or revising the enrollment projections, the board shall use the
average daily membership data available during the current school
year. On request from the board, the department of education shall
make available the most recent average daily membership data for use in
revising the enrollment projections. In determining new construction
requirements, the board shall determine the net new growth of pupils that will
require additional square footage that exceeds the building adequacy standards
prescribed in section 41-5711. If the projected growth and the
existing number of pupils exceed three hundred fifty pupils who are served in a
school district other than the pupil's resident school district, the board, the
receiving school district and the resident school district shall develop a
capital facilities plan on how to best serve those pupils. A small
isolated school district as defined in section 15-901 is not required to
develop a capital facilities plan pursuant to this paragraph.

2. If the average daily membership projections
indicate that additional space will not be needed within the next two school
years in order to meet the building adequacy standards prescribed in section 41-5711,
the request shall be held for consideration by the board for possible future
funding and the school district shall annually submit an updated plan until the
additional space is needed.

3. If the average daily membership projections
indicate that additional space will be needed within the next two school years
in order to meet the building adequacy standards prescribed in section 41-5711,
the board shall provide an amount as follows:

(a) Determine the number of pupils requiring
additional square footage to meet building adequacy standards. This
amount for elementary schools shall not be less than the number of new pupils
for whom space will be needed in the next year and shall not exceed the number
of new pupils for whom space will be needed in the next five
years. This amount for middle and high schools shall not be less
than the number of new pupils for whom space will be needed in the next four years
and shall not exceed the number of new pupils for whom space will be needed in
the next eight years.

(b) Multiply the number of pupils determined in
subdivision (a) of this paragraph by the square footage per
pupil. The square footage per pupil is ninety square feet per pupil
for preschool children with disabilities, kindergarten programs and grades one
through six, one hundred square feet for grades seven and eight, one hundred
thirty-four square feet for a school district that provides instruction
in grades nine through twelve for fewer than one thousand eight hundred pupils
and one hundred twenty-five square feet for a school district that
provides instruction in grades nine through twelve for at least one thousand
eight hundred pupils. The total number of pupils in grades nine
through twelve in the district shall determine the square footage factor to use
for net new pupils. The board may modify the square footage
requirements prescribed in this subdivision for particular schools based on any
of the following factors:

(i) The number of pupils served or projected to be
served by the school district.

(ii) Geographic factors.

(iii) Grade configurations other than those
prescribed in this subdivision.

(iv) Compliance with minimum school facility
adequacy requirements established pursuant to section 41-5711.

(c) Multiply the product obtained in subdivision (b)
of this paragraph by the cost per square foot. The cost per square
foot is $270.24 for preschool children with disabilities, kindergarten programs
and grades one through six, $285.30 for grades seven and eight and $330.30 for
grades nine through twelve. The cost per square foot shall be
adjusted annually for construction market considerations based on an index
identified or developed by the joint legislative budget committee as necessary
but not less than once each year. Each annual construction market
adjustment applies to all projects approved by the
school
facilities
board under this subsection during that year. The
board shall multiply the cost per square foot by 1.05 for any school district
located in a rural area. The board may only modify the base cost per
square foot prescribed in this subdivision for particular schools based on
geographic conditions or site conditions. Any extra monies received
as a result of a modification based on geographic conditions or site conditions
may be used to address unforeseen costs at any stage of a project under this
section. For the purposes of this subdivision, "rural
area" means an area outside a thirty-five-mile radius of a
boundary of a municipality with a population of more than fifty thousand
persons.

(d) Once the school district governing board obtains
approval from the
school facilities oversight
board for
new facility construction monies, additional portable or modular square footage
created for the express purpose of providing temporary space for pupils until
the completion of the new facility and any additional space funded by the
school district shall not be included by the
school facilities
oversight
board for the purpose of new construction funding
calculations. On completion of the new facility construction
project, any additional space funded by the school district shall be included
as prescribed by this chapter and, if the portable or modular facilities
continue in use, the portable or modular facilities shall be included as
prescribed by this chapter, unless the
school facilities
oversight
board approves their continued use for the purpose of
providing temporary space for pupils until the completion of the next new
facility that has been approved for funding from the new school facilities
fund.

(
e
) For
projects approved after the effective date of this amendment to this section:

(
i
) Require all
projects that are funded pursuant to this section to include security equipment
and features that are designed to prevent individuals from entering a school
building without authorization.�

(
ii
) include
the costs for security equipment and features pursuant to this subdivision in
the new facility construction funding calculations pursuant to this paragraph.

4. For projects approved after December 31, 2001,
and notwithstanding paragraph 3 of this subsection, a unified school district
that does not have a high school is not eligible to receive high school space
as prescribed by section 41-5711 and this section unless the unified
district qualifies for geographic factors prescribed by paragraph 3,
subdivision (b), item (ii) of this subsection.

5. If a career technical education district leases a
building from a school district, that building shall be included in the school
district's square footage calculation for the purposes of new construction
pursuant to this section.

6. If a school district leases a building to another
entity, that building shall be included in the school district's square footage
calculation for purposes of new construction pursuant to this section.

7. A school district shall qualify for monies from
the new school facilities fund for additional square footage in a fiscal year
only if the board has approved or revised its enrollment projection under
paragraph 1 of this subsection on or before December 15 of the prior fiscal
year.

E. Monies for architectural and engineering fees,
project management services and preconstruction services shall be distributed
on the completion of the analysis by the board of the school district's
request. After receiving monies pursuant to this subsection, the
school district shall submit a design development plan for the school or
addition to the board before any monies for construction are
distributed. If the school district's request meets the building
adequacy standards, the board may review and comment on the district's plan
with respect to the efficiency and effectiveness of the plan in meeting state
square footage and facility standards before directing the distribution of the
remainder of the monies. If the board modifies the cost per square
foot as prescribed in subsection D, paragraph 3, subdivision (c) of this
section, the board may deduct the cost of project management services and
preconstruction services from the required cost per square foot. The
board may decline to fund the project if the square footage is no longer
required due to revised enrollment projections.� The board may decline a
portion of the funding if a portion of the square footage is no longer needed
due to revised enrollment projections.

F. At the direction of the board, the division shall
distribute the monies needed for land for new schools so that land may be
purchased at a price that is less than or equal to fair market value and in
advance of the construction of the new school. If necessary, the
board may direct the division to distribute monies for land to be leased for
new schools if the duration of the lease exceeds the life expectancy of the
school facility by at least fifty percent. A school district shall
not use land purchased or partially purchased with monies provided at the
direction of the board for a purpose other than a site for a school facility
without obtaining prior written approval from the board. A school
district shall not lease, sell or take any action that would diminish the value
of land purchased or partially purchased with monies provided at the direction
of the board without obtaining prior written approval from the
board. The proceeds derived through the sale of any land purchased or
partially purchased, or the sale of buildings funded or partially funded, with
monies provided at the direction of the board shall be returned to the state
fund from which it was appropriated and to any other participating entity on a
proportional basis. Except as provided in section 15-342,
paragraph 33, if a school district acquires real property by donation at an
appropriate school site approved by the board, the board shall direct the
division to distribute an amount equal to twenty percent of the fair market
value of the donated real property that can be used for academic
purposes. The school district shall place the monies in the
unrestricted capital outlay fund and increase the unrestricted capital budget
limit by the amount of monies placed in the fund. Monies distributed
under this subsection shall be distributed from the new school facilities
fund. A school district that receives monies from the new school
facilities fund for a donation of land pursuant to section 15-342,
paragraph 33 shall not receive monies from the board or the division for the
donation of real property pursuant to this subsection. A school
district shall not pay a consultant a percentage of the value of any of the
following:

1. Donations of real property, services or cash from
any of the following:

(a) Entities that have offered to provide
construction services to the school district.

(b) Entities that have been contracted to provide
construction services to the school district.

(c) Entities that build residential units in that
school district.

(d) Entities that develop land for residential use
in that school district.

2. Monies received under this chapter on behalf of
the school district.

3. Monies paid by or at the direction of the board
on behalf of the school district.

G. In addition to distributions to school districts
based on pupil growth projections, a school district may submit an application
to the board for monies from the new school facilities fund if one or more
school buildings have outlived their useful life or have been
condemned. If the board determines that the school district needs to
build a new school building for these reasons, the board shall remove the
square footage computations that represent the building from the computation of
the school district's total square footage for purposes of this
section. If the square footage recomputation reflects that the
school district no longer meets
the
building adequacy
standards, the school district qualifies for a distribution of monies from the
new school construction formula in an amount determined pursuant to subsection
D of this section.� The board may
only
modify the base
cost per square foot prescribed in this subsection
only
under
extraordinary circumstances for geographic factors or site conditions.

H. School districts that receive monies from the new
school facilities fund shall establish a district new school facilities fund
and shall use the monies in the district new school facilities fund only for
the purposes prescribed in this section.�
By
On or before
October 15 of each year, each school district
shall report to the board the projects funded at each school in the previous
fiscal year with monies from the district new school facilities fund and shall
provide an accounting of the monies remaining in the new school facilities fund
at the end of the previous fiscal year.

I. If a school district has surplus monies received
from the new school facilities fund, the school district may use the surplus
monies only for capital purposes for the project for up to one year after
completion of the project. If the school district possesses surplus
monies from the new school construction project that have not been
expended
spent
within one year
of
after
the completion of the project,
the school district shall return the surplus monies to the division for deposit
in the new school facilities fund.

J. The board's consideration of any application
filed after December 31 of the year in which the property becomes
territory in the vicinity of a military airport or ancillary military facility
as defined in section 28-8461 for monies to fund the construction of new
school facilities proposed to be located in territory in the vicinity of a
military airport or ancillary military facility shall include, if after notice
is transmitted to the military airport pursuant to section 41-5702 and
before the public hearing the military airport provides comments and an
analysis concerning compatibility of the proposed school facilities with the
high noise or accident potential generated by military airport or ancillary
military facility operations that may have an adverse effect on public health
and safety, consideration and an analysis of the comments and an analysis
provided by the military airport before making a final determination.

K. If a school district uses its own project manager
for new school construction, the members of the school district governing board
and the project manager shall sign an affidavit stating that the members and
the project manager understand and will follow the minimum adequacy
requirements prescribed in section 41-5711.

L. The division shall establish a separate account
in the new school facilities fund designated as the litigation account to pay
attorney fees, expert witness fees and other costs associated with litigation
in which the board pursues the recovery of damages for deficiencies correction
that resulted from alleged construction defects or design defects that the
board believes caused or contributed to a failure of the school building to
conform to the building adequacy requirements prescribed in section 41-5711. Attorney
fees paid pursuant to this subsection shall not exceed the market rate for
similar types of litigation. On or before December 1 of each year,
the board shall report to the joint committee on capital review the costs associated
with current and potential litigation that may be paid from the litigation
account.

M. Until the state board of education and the
auditor general adopt rules pursuant to section 15-213, subsection J, the
board may allow school districts to contract for construction services and
materials through the qualified select bidders list method of project delivery
for new school facilities pursuant to this section.

N. The board shall submit electronically a report on
project management services and preconstruction services to the governor, the
president of the senate and the speaker of the house of representatives by
December 31 of each year. The report shall compare projects that use
project management and preconstruction services with those that do not.� The
report shall address cost, schedule and other measurable components of a
construction project. School districts, construction-manager-at-risk
firms and project management firms that participate in a board-funded
project shall provide the information required by the board in relation to this
report.

O. If a school district constructs new square
footage according to section 15-342, paragraph 33, the board shall review
the design plans and location of any new school facility submitted by school
districts and another party to determine whether the design plans comply with
the adequacy standards prescribed in section 41-5711
,

and

comply with
the square footage
per pupil requirements pursuant to subsection D, paragraph 3, subdivision (b)
of this section
and include security equipment and features that
are designed to prevent individuals from entering a school building without
authorization
. When the school district qualifies for a
distribution of monies from the new school facilities fund according to this
section, the board shall direct the division to distribute monies to the school
district from the new school facilities fund for the square footage constructed
under section 15-342, paragraph 33 at the same cost per square foot
established by this section that was in effect at the time of the beginning of
the construction of the school facility. Before the board directs
the division to distribute any monies pursuant to this subsection, the school
district shall demonstrate to the board that the facilities to be funded
pursuant to this section meet the minimum adequacy standards prescribed in
section 41-5711. The agreement entered into pursuant to
section 15-342, paragraph 33 shall set forth the procedures for the
allocation of these funds to the parties that participated in the agreement.

P. Accommodation schools are not eligible for monies
from the new school facilities fund.

Q. If the board approves a school district for
funding from the new school facilities fund and the full legislative
appropriation is not available to the school district in the fiscal year
following the approval by the board, the school district may use any legally
available monies to pay for the land or the new construction project approved
by the board and may reimburse the fund from which the monies were used in
subsequent years with legislative appropriations when those appropriations are
made available by this state.
END_STATUTE