school districts; funds; financial reports

SB1763 - 572R - S Ver

Senate Engrossed

school districts;
funds; financial reports

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SENATE BILL 1763

AN
ACT

amending sections 15-341, 15-904
and 15-1104, Arizona Revised Statutes; repealing section 15-1224,
Arizona Revised Statutes; amending title 15, chapter 10, article 9, Arizona
Revised Statutes, by adding section 15-1232; relating to school district
finances.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Section 15-341, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-341.

General powers and duties; immunity; delegation

A. Each school district governing board shall:

1. Prescribe and enforce policies and procedures to
govern the schools that are not inconsistent with the laws or rules prescribed
by the state board of education.

2. Exclude from schools all books, publications,
papers or audiovisual materials of a sectarian, partisan or denominational
character. This paragraph does not prohibit the elective course allowed by
section 15-717.01.

3. Manage and control the school property within its
district, except that a district may enter into a partnership with an entity,
including a charter school, another school district or a military base, to
operate a school or offer educational services in a district building,
including at a vacant or partially used building, or in any building on the
entity's property pursuant to a written agreement between the parties.

4. Acquire school furniture, apparatus, equipment,
library books and supplies for the schools to use.

5. Prescribe the curricula and criteria for the
promotion and graduation of pupils as provided in sections 15-701 and 15-701.01.

6. Furnish, repair and insure, at full insurable
value, the school property of the district.

7. Construct school buildings on approval by a vote
of the district electors.

8. In the name of the district, convey property
belonging to the district and sold by the board.

9. Purchase school sites when authorized by a vote
of the district at an election conducted as nearly as practicable in the same
manner as the election provided in section 15-481 and held on a date
prescribed in section 15-491, subsection E, but such authorization shall
not necessarily specify the site to be purchased and such authorization shall
not be necessary to exchange unimproved property as provided in section 15-342,
paragraph 23.

10. Construct, improve and furnish buildings used
for school purposes when such buildings or premises are leased from the
national park service.

11. Purchase school sites or construct, improve and
furnish school buildings from the proceeds of the sale of school property only
on approval by a vote of the district electors.

12. Hold pupils to strict account for disorderly
conduct on school property.

13. Discipline students for disorderly conduct on
the way to and from school.

14.
Except as provided in section 15-1224,

Deposit all monies received by the district as gifts, grants and devises with
the county treasurer who shall credit the deposits as designated in the uniform
system of financial records.� If not inconsistent with the terms of the gifts,
grants and devises given,
THE SCHOOL DISTRICT GOVERNING BOARD
SHALL EITHER USE
any balance remaining after expenditures for the
intended purpose of the monies have been made
shall be used

to reduce school district taxes for the budget year
, except that
in the case of

OR TRANSFER THE MONIES TO THE ADDITIONAL
MONIES FUND ESTABLISHED BY SECTION 15-1232. iF NOT INCONSISTENT WITH THE
TERMS OF the GIFTS, GRANTS AND DEVISES GIVEN TO
accommodation schools
,
the county treasurer shall carry the balance forward for use
by the county school superintendent for accommodation schools for the budget
year.

15. Provide that, if a parent or legal guardian
chooses not to accept a decision of the teacher as provided in paragraph 42 of
this subsection, the parent or legal guardian may request in writing that the
governing board review the teacher's decision. This paragraph does
not release school districts from any liability relating to a child's promotion
or retention.

16. Provide for adequate supervision over pupils in
instructional and noninstructional activities by certificated or
noncertificated personnel.

17. Use school monies received from the state and
county school apportionment exclusively to pay salaries of teachers and other
employees and contingent expenses of the district.

18. Annually report to the county school
superintendent on or before October 1 in the manner and form and on the blanks
prescribed by the superintendent of public instruction or county school
superintendent. The board shall also report directly to the county school
superintendent or the superintendent of public instruction whenever required.

19. Deposit all monies received by school districts
other than student activities monies or monies from auxiliary operations as
provided in sections 15-1125 and 15-1126 with the county treasurer
to the credit of the school district except as provided in paragraph 20 of this
subsection and sections 15-1223 and
15-1224

15-1232
, and the board shall spend the monies as provided
by law for other school funds.

20. Establish bank accounts in which the board
during a month may deposit miscellaneous monies received directly by the district.�
The board shall remit monies deposited in the bank accounts at least monthly to
the county treasurer for deposit as provided in paragraph 19 of this subsection
and in accordance with the uniform system of financial records.

21. Prescribe and enforce policies and procedures
for disciplinary action against a teacher who engages in conduct that is a
violation of the policies of the governing board but that is not cause for
dismissal of the teacher or for revocation of the certificate of the
teacher. Disciplinary action may include suspension without pay for
a period of time not to exceed ten school days.� Disciplinary action shall not
include suspension with pay or suspension without pay for a period of time
longer than ten school days. The procedures shall include notice,
hearing and appeal provisions for violations that are cause for disciplinary
action. The governing board may designate a person or persons to act
on behalf of the board on these matters.

22. Prescribe and enforce policies and procedures
for disciplinary action against an administrator who engages in conduct that is
a violation of the policies of the governing board regarding duties of
administrators but that is not cause for dismissal of the administrator or for
revocation of the certificate of the administrator. Disciplinary
action may include suspension without pay for a period of time not to exceed
ten school days. Disciplinary action shall not include suspension with pay or
suspension without pay for a period of time longer than ten school
days. The procedures shall include notice, hearing and appeal
provisions for violations that are cause for disciplinary action.� The
governing board may designate a person or persons to act on behalf of the board
on these matters. For violations that are cause for dismissal, the
provisions of notice, hearing and appeal in chapter 5, article 3 of this title
apply. The filing of a timely request for a hearing suspends the imposition of
a suspension without pay or a dismissal pending completion of the hearing.

23. Notwithstanding sections 13-3108 and 13-3120,
prescribe and enforce policies and procedures that prohibit a person from
carrying or possessing a weapon on school grounds unless the person is a peace
officer or has obtained specific authorization from the school administrator.

24. Prescribe and enforce policies and procedures
relating to the health and safety of all pupils participating in district-sponsored
practice sessions or games or other interscholastic athletic activities,
including:

(a) The provision of water.

(b) Guidelines, information and forms, developed in
consultation with a statewide private entity that supervises interscholastic
activities, to inform and educate coaches, pupils and parents of the dangers of
concussions and head injuries and the risks of continued participation in
athletic activity after a concussion. The policies and procedures
shall require that, before a pupil participates in an athletic activity, the
pupil and the pupil's parent sign an information form at least once each school
year that states that the parent is aware of the nature and risk of
concussion. The policies and procedures shall require that a pupil
who is suspected of sustaining a concussion in a practice session, game or
other interscholastic athletic activity be immediately removed from the
athletic activity and that the pupil's parent or guardian be
notified. A coach from the pupil's team or an official or a licensed
health care provider may remove a pupil from play. A team parent may
also remove the parent's own child from play.� A pupil may return to play on
the same day if a health care provider rules out a suspected concussion at the
time the pupil is removed from play. On a subsequent day, the pupil
may return to play if the pupil has been evaluated by and received written
clearance to resume participation in athletic activity from a health care
provider who has been trained in evaluating and managing concussions and head
injuries. A health care provider who is a volunteer and who provides
clearance to participate in athletic activity on the day of the suspected
injury or on a subsequent day is immune from civil liability with respect to
all decisions made and actions taken that are based on good faith
implementation of the requirements of this subdivision, except in cases of
gross negligence or wanton or wilful neglect. A school district,
school district employee, team coach, official or team volunteer or a parent or
guardian of a team member is not subject to civil liability for any act,
omission or policy undertaken in good faith to comply with the requirements of
this subdivision or for a decision made or an action taken by a health care
provider. A group or organization that uses property or facilities
owned or operated by a school district for athletic activities shall comply
with the requirements of this subdivision. A school district and its
employees and volunteers are not subject to civil liability for any other
person or organization's failure or alleged failure to comply with the
requirements of this subdivision. This subdivision does not apply to
teams that are based in another state and that participate in an athletic
activity in this state. For the purposes of this subdivision,
athletic activity does not include dance, rhythmic gymnastics, competitions or
exhibitions of academic skills or knowledge or other similar forms of physical
noncontact activities, civic activities or academic activities, whether engaged
in for the purposes of competition or recreation. For the purposes
of this subdivision, "health care provider" means a physician who is
licensed pursuant to title 32, chapter 13, 14 or 17, an athletic trainer who is
licensed pursuant to title 32, chapter 41, a nurse practitioner who is licensed
pursuant to title 32, chapter 15, and a physician assistant who is licensed
pursuant to title 32, chapter 25.

(c) Guidelines, information and forms that are
developed in consultation with a statewide private entity that supervises
interscholastic activities to inform and educate coaches, pupils and parents of
the dangers of heat-related illnesses, sudden cardiac death and
prescription opioid use. Before a pupil participates in any district-sponsored
practice session or game or other interscholastic athletic activity, the pupil
and the pupil's parent must be provided with information at least once each
school year on the risks of heat-related illnesses, sudden cardiac death
and prescription opioid addiction.

25. Establish an assessment, data gathering and
reporting system as prescribed in chapter 7, article 3 of this title.

26. Provide special education programs and related
services pursuant to section 15-764, subsection A to all children with
disabilities as defined in section 15-761.

27. Administer competency tests prescribed by the
state board of education for the graduation of pupils from high school.

28. Ensure that insurance coverage is secured for
all construction projects for purposes of general liability, property damage
and workers' compensation and secure performance and payment bonds for all
construction projects.

29. Collect and maintain information about each
current and former teacher's educational and teaching background and experience
in a particular academic content subject area. A school district
shall either post the information on the school district's website or make the
information available for inspection on request of parents and guardians of
pupils enrolled at a school. This paragraph does not require any
school to release personally identifiable information in relation to any
teacher, including the teacher's address, salary, social security number or
telephone number.

30. Report to local law enforcement agencies any
suspected crime against a person or property that is a serious offense as
defined in section 13-706 or that involves a deadly weapon or dangerous
instrument or serious physical injury and any conduct that poses a threat of
death or serious physical injury to employees, students or anyone on the
property of the school. This paragraph does not limit or preclude
the reporting by a school district or an employee of a school district of
suspected crimes other than those required to be reported by this
paragraph. For the purposes of this paragraph, "dangerous
instrument", "deadly weapon" and "serious physical
injury" have the same meanings prescribed in section 13-105.

31. In conjunction with local law enforcement
agencies and emergency response agencies, develop an emergency response plan
for each school in the school district in accordance with minimum standards
developed jointly by the department of education and the division of emergency
management within the department of emergency and military
affairs. Any emergency response plan developed pursuant to this
paragraph must address how the school and emergency responders will communicate
with and provide assistance to students with disabilities.

32. Provide written notice to the parents or
guardians of all students enrolled in the school district at least ten days
before a public meeting to discuss closing a school within the school
district. The notice shall include the reasons for the proposed
closure and the time and place of the meeting. The governing board
shall fix a time for a public meeting on the proposed closure not less than ten
days before voting in a public meeting to close the school. The
school district governing board shall give notice of the time and place of the
meeting. At the time and place designated in the notice, the school
district governing board shall hear reasons for or against closing the
school. The school district governing board is exempt from this
paragraph if the governing board determines that the school shall be closed
because it poses a danger to the health or safety of the pupils or employees of
the school.� A governing board may consult with the division of school
facilities within the department of administration for technical assistance and
for information on the impact of closing a school. The information
provided from the division of school facilities within the department of
administration shall not require the governing board to take or not take any
action.

33. Incorporate instruction on Native American
history into appropriate existing curricula.

34. Prescribe and enforce policies and procedures:

(a) Allowing pupils who have been diagnosed with
anaphylaxis by a health care provider licensed pursuant to title 32, chapter
13, 14, 17 or 25 or by a registered nurse practitioner licensed and certified
pursuant to title 32, chapter 15 to carry and self-administer emergency
medications, including epinephrine delivery systems, while at school and at
school-sponsored activities. The pupil's name on the
prescription label on the medication container or on the medication device and
annual written documentation from the pupil's parent or guardian to the school
that authorizes possession and self-administration is sufficient proof
that the pupil is entitled to possess and self-administer the
medication. The policies shall require a pupil who uses an
epinephrine delivery system while at school and at school-sponsored
activities to notify the nurse or the designated school staff person of the use
of the medication as soon as practicable.� A school district and its employees
are immune from civil liability with respect to all decisions made and actions
taken that are based on good faith implementation of the requirements of this
subdivision, except in cases of wanton or wilful neglect.

(b) For the emergency administration of epinephrine
delivery systems by a trained employee of a school district pursuant to section
15-157.

35. Allow the possession and self-administration
of prescription medication for breathing disorders in handheld inhaler devices
by pupils who have been prescribed that medication by a health care
professional licensed pursuant to title 32. The pupil's name on the
prescription label on the medication container or on the handheld inhaler
device and annual written documentation from the pupil's parent or guardian to
the school that authorizes possession and self-administration is
sufficient proof that the pupil is entitled to possess and self-administer
the medication. A school district and its employees are immune from civil
liability with respect to all decisions made and actions taken that are based
on a good faith implementation of the requirements of this paragraph.

36. Prescribe and enforce policies and procedures to
prohibit pupils from harassing, intimidating and bullying other pupils on
school grounds, on school property, on school buses, at school bus stops, at
school-sponsored events and activities and through the use of electronic
technology or electronic communication on school computers, networks, forums
and mailing lists that include the following components:

(a) A procedure for pupils, parents and school
district employees to confidentially report to school officials incidents of
harassment, intimidation or bullying. The school shall make
available written forms designed to provide a full and detailed description of
the incident and any other relevant information about the incident.

(b) A requirement that school district employees
report in writing suspected incidents of harassment, intimidation or bullying
to the appropriate school official and a description of appropriate
disciplinary procedures for employees who fail to report suspected incidents
that are known to the employee.

(c) A requirement that, at the beginning of each
school year, school officials provide all pupils with a written copy of the
rights, protections and support services available to a pupil who is an alleged
victim of an incident reported pursuant to this paragraph.

(d) If an incident is reported pursuant to this
paragraph, a requirement that school officials provide a pupil who is an
alleged victim of the incident with a written copy of the rights, protections
and support services available to that pupil.

(e) A formal process for documenting reported
incidents of harassment, intimidation or bullying and providing for the
confidentiality, maintenance and disposition of this documentation.� School
districts shall maintain documentation of all incidents reported pursuant to
this paragraph for at least six years. The school shall not use that
documentation to impose disciplinary action unless the appropriate school
official has investigated and determined that the reported incidents of harassment,
intimidation or bullying occurred. If a school provides
documentation of reported incidents to persons other than school officials or
law enforcement, all individually identifiable information shall be redacted.

(f) A formal process for the appropriate school
officials to investigate suspected incidents of harassment, intimidation or
bullying, including procedures for notifying the alleged victim and the alleged
victim's parent or guardian when a school official or employee becomes aware of
the suspected incident of harassment, intimidation or bullying.

(g) Disciplinary procedures for pupils who have
admitted or been found to have committed incidents of harassment, intimidation
or bullying.

(h) A procedure that sets forth consequences for
submitting false reports of incidents of harassment, intimidation or bullying.

(i) Procedures designed to protect the health and
safety of pupils who are physically harmed as the result of incidents of
harassment, intimidation and bullying, including, if appropriate, procedures to
contact emergency medical services or law enforcement agencies, or both.

(j) Definitions of harassment, intimidation and
bullying.

37. Prescribe and enforce policies and procedures
regarding changing or adopting attendance boundaries that include the following
components:

(a) A procedure for holding public meetings to
discuss attendance boundary changes or adoptions that allows public comments.

(b) A procedure to notify the parents or guardians
of the students affected, including assurance that, if that school remains open
as part of the boundary change and capacity is available, students assigned to
a new attendance area may stay enrolled in their current school.

(c) A procedure to notify the residents of the
households affected by the attendance boundary changes.

(d) A process for placing public meeting notices and
proposed maps on the school district's website for public review, if the school
district maintains a website.

(e) A formal process for presenting the attendance
boundaries of the affected area in public meetings that allows public comments.

(f) A formal process for notifying the residents and
parents or guardians of the affected area as to the decision of the governing
board on the school district's website, if the school district maintains a
website.

(g) A formal process for updating attendance
boundaries on the school district's website within ninety days after an adopted
boundary change. The school district shall send a direct link to the
school district's attendance boundaries website to the department of real
estate.

38. If the state board of education determines that
the school district has committed an overexpenditure as defined in section 15-107,
provide a copy of the fiscal management report submitted pursuant to section 15-107,
subsection H on its website and make copies available to the public on
request. The school district shall comply with a request within five
business days after receipt.

39. Ensure that the contract for the superintendent
is structured in a manner in which up to twenty percent of the total annual
salary included for the superintendent in the contract is classified as
performance pay. This paragraph does not require school districts to
increase total compensation for superintendents. Unless the school
district governing board votes to implement an alternative procedure at a
public meeting called for this purpose, the performance pay portion of the
superintendent's total annual compensation shall be determined as follows:

(a) Twenty-five percent of the performance pay
shall be determined based on the percentage of academic gain determined by the
department of education of pupils who are enrolled in the school district
compared to the academic gain achieved by the highest ranking of the fifty
largest school districts in this state. For the purposes of this
subdivision, the department of education shall determine academic gain by the
academic growth achieved by each pupil who has been enrolled at the same school
in a school district for at least five consecutive months measured against that
pupil's academic results in the 2008-2009 school year. For the
purposes of this subdivision, of the fifty largest school districts in this
state, the school district with pupils who demonstrate the highest statewide
percentage of overall academic gain measured against academic results for the
2008-2009 school year shall be assigned a score of 100 and the school
district with pupils who demonstrate the lowest statewide percentage of overall
academic gain measured against academic results for the 2008-2009 school
year shall be assigned a score of 0.

(b) Twenty-five percent of the performance pay
shall be determined by the percentage of parents of pupils who are enrolled at
the school district who assign a letter grade of "A" to the school on
a survey of parental satisfaction with the school district. The
parental satisfaction survey shall be administered and scored by an independent
entity that is selected by the governing board and that demonstrates sufficient
expertise and experience to accurately measure the results of the survey. The
parental satisfaction survey shall use standard random sampling procedures and
provide anonymity and confidentiality to each parent who participates in the
survey. The letter grade scale used on the parental satisfaction
survey shall direct parents to assign one of the following letter grades:

(i) A letter grade of "A" if the school
district is excellent.

(ii) A letter grade of "B" if the school
district is above average.

(iii) A letter grade of "C" if the school
district is average.

(iv) A letter grade of "D" if the school
district is below average.

(v) A letter grade of "F" if the school
district is a failure.

(c) Twenty-five percent of the performance pay
shall be determined by the percentage of teachers who are employed at the
school district and who assign a letter grade of "A" to the school on
a survey of teacher satisfaction with the school. The teacher
satisfaction survey shall be administered and scored by an independent entity
that is selected by the governing board and that demonstrates sufficient
expertise and experience to accurately measure the results of the
survey. The teacher satisfaction survey shall use standard random
sampling procedures and provide anonymity and confidentiality to each teacher
who participates in the survey.� The letter grade scale used on the teacher
satisfaction survey shall direct teachers to assign one of the following letter
grades:

(i) A letter grade of "A" if the school
district is excellent.

(ii) A letter grade of "B" if the school
district is above average.

(iii) A letter grade of "C" if the school
district is average.

(iv) A letter grade of "D" if the school
district is below average.

(v) A letter grade of "F" if the school
district is a failure.

(d) Twenty-five percent of the performance pay
shall be determined by other criteria selected by the governing board.

40. Maintain and store permanent public records of
the school district as required by law. Notwithstanding section 39-101,
the standards adopted by the Arizona state library, archives and public records
for the maintenance and storage of school district public records shall allow
school districts to elect to satisfy the requirements of this paragraph by
maintaining and storing these records either on paper or in an electronic
format, or a combination of a paper and electronic format.

41. Adopt in a public meeting and implement policies
for principal evaluations. Before adopting principal evaluation
policies, the school district governing board shall provide opportunities for
public discussion on the proposed policies. The governing board
shall adopt policies that:

(a) Are designed to improve principal performance
and improve student achievement.

(b) Include the use of quantitative data on the
academic progress for all students, which shall account for between twenty
percent and thirty-three percent of the evaluation outcomes.

(c) Include four performance classifications,
designated as highly effective, effective, developing and ineffective.

(d) Describe both of the following:

(i) The methods used to evaluate the performance of
principals, including the data used to measure student performance and job
effectiveness.

(ii) The formula used to determine evaluation
outcomes.

42. Prescribe and enforce policies and procedures
that define the duties of principals and teachers. These policies
and procedures shall authorize teachers to take and maintain daily classroom
attendance, make the decision to promote or retain a pupil in a grade in common
school or to pass or fail a pupil in a course in high school, subject to review
by the governing board in the manner provided in section 15-342,
paragraph 11.

43. Prescribe and enforce policies and procedures
for the emergency administration by an employee of a school district pursuant
to section 36-2267 of naloxone hydrochloride or any other opioid
antagonist approved by the United States food and drug administration.

44. In addition to the notification requirements
prescribed in paragraph 36 of this subsection, prescribe and enforce reasonable
and appropriate policies to notify a pupil's parent or guardian if any person
engages in harassing, threatening or intimidating conduct against that pupil.�
A school district and its officials and employees are immune from civil
liability with respect to all decisions made and actions taken that are based
on good faith implementation of the requirements of this paragraph, except in
cases of gross negligence or wanton or wilful neglect.� A person engages in
threatening or intimidating if the person threatens or intimidates by word or
conduct to cause physical injury to another person or serious damage to the
property of another on school grounds.� A person engages in harassment if, with
intent to harass or with knowledge that the person is harassing another person,
the person anonymously or otherwise contacts, communicates or causes a
communication with another person by verbal, electronic, mechanical, telephonic
or written means in a manner that harasses on school grounds or substantially
disrupts the school environment.

45. Each fiscal year, provide to each school
district employee a total compensation statement that is broken down by
category of benefit or payment and that includes, for that employee, at least
all of the following:

(a) Base salary and any additional pay.

(b) Medical benefits and the value of any employer-paid
portions of insurance plan premiums.

(c) Retirement benefit plans, including social
security.

(d) Legally required benefits.

(e) Any paid leave.

(f) Any other payment made to or on behalf of the
employee.

(g) Any other benefit provided to the employee.

46. Develop and adopt in a public meeting policies
to allow for visits, tours and observations of all classrooms by parents of
enrolled pupils and parents who wish to enroll their children in the school
district unless a visit, tour or observation threatens the health and safety of
pupils and staff.� These policies and procedures must be easily accessible from
the home page on each school's website.

B. Notwithstanding subsection A, paragraphs 7, 9 and
11 of this section, the county school superintendent may construct, improve and
furnish school buildings or purchase or sell school sites in the conduct of an
accommodation school.

C. If any school district acquires real or personal
property, whether by purchase, exchange, condemnation, gift or otherwise, the
governing board shall pay to the county treasurer any taxes on the property
that were unpaid as of the date of acquisition, including penalties and
interest.� The lien for unpaid delinquent taxes, penalties and interest on
property acquired by a school district:

1. Is not abated, extinguished, discharged or merged
in the title to the property.

2. Is enforceable in the same manner as other
delinquent tax liens.

D. The governing board may not locate a school on
property that is less than one-fourth mile from agricultural land
regulated pursuant to section 3-365, except that the owner of the
agricultural land may agree to comply with the buffer zone requirements of
section 3-365. If the owner agrees in writing to comply with
the buffer zone requirements and records the agreement in the office of the
county recorder as a restrictive covenant running with the title to the land,
the school district may locate a school within the affected buffer
zone. The agreement may include any stipulations regarding the
school, including conditions for future expansion of the school and changes in
the operational status of the school that will result in a breach of the
agreement.

E. A school district, its governing board members,
its school council members and its employees are immune from civil liability
for the consequences of adopting and implementing policies and procedures
pursuant to subsection A of this section and section 15-342.� This waiver
does not apply if the school district, its governing board members, its school
council members or its employees are guilty of gross negligence or intentional
misconduct.

F. A governing board may delegate in writing to a
superintendent, principal or head teacher the authority to prescribe procedures
that are consistent with the governing board's policies.

G. Notwithstanding any other provision of this
title, a school district governing board shall not take any action that would
result in a reduction of pupil square footage unless the governing board
notifies the school facilities oversight board established by section 41-5701.02
of the proposed action and receives written approval from the school facilities
oversight board to take the action. A reduction includes an increase
in administrative space that results in a reduction of pupil square footage or
sale of school sites or buildings, or both. A reduction includes a
reconfiguration of grades that results in a reduction of pupil square footage
of any grade level. This subsection does not apply to temporary
reconfiguration of grades to accommodate new school construction if the
temporary reconfiguration does not exceed one year. The sale of
equipment that results in a reduction that falls below the equipment
requirements prescribed in section 41-5711, subsection B is subject to
commensurate withholding of school district district additional assistance
monies pursuant to the direction of the school facilities oversight board.�
Except as provided in section 15-342, paragraph 10, proceeds from the
sale of school sites, buildings or other equipment shall be deposited in the
school plant fund as provided in section 15-1102.

H. Subsections C through G of this section apply to
a county board of supervisors and a county school superintendent when operating
and administering an accommodation school.

I. A school district governing board may delegate
authority in writing to the superintendent of the school district to submit
plans for new school facilities to the school facilities oversight board for
the purpose of certifying that the plans meet the minimum school facility
adequacy guidelines prescribed in section 41-5711.

J. For the purposes of subsection A, paragraph 37 of
this section, attendance boundaries may not be used to require students to
attend certain schools based on the student's place of residence.
END_STATUTE

Sec. 2. Section 15-904, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-904.

School district annual financial report; publication; summary

A. The governing board of each school district shall
publish an annual financial report for the prior fiscal year
by
on or before
November 15. The auditor general in
conjunction with the department of education shall prescribe the format of the
financial report to be used by school districts
on or before
August 15
. The financial report shall contain budgeted and
actual expenditures for the preceding fiscal year and shall be prepared and
distributed
by
on or before
October
15 by the school district with a copy to the county school superintendent.� A
copy of the annual financial report shall be submitted electronically by the
school district to the superintendent of public instruction
by
on or before
October 15. On or before October 15,
the governing board shall submit the annual financial report for the previous
fiscal year 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.

B. In addition to the information required in
subsection A of this section, the annual financial report shall contain
detailed information on the school district budgeted and actual expenditures
from the bond building fund, the unrestricted capital
outlay
fund,
the adjacent ways fund, the deficiencies correction fund and the new school
facilities fund, including information on classified salaries, employee
benefits, interest and fiscal charges, capital lease agreements, land and
improvements, buildings and improvements, furniture and equipment, technology
and vehicles and transportation equipment for pupils. The
information shall specify whether the expenditures are for school district
renovation or for new construction, the cost per square foot and land
acquisition costs, as appropriate.

C. Except as provided in subsection D of this
section, the governing board shall publish,
by
on or before
November 15, the annual financial report for the
school district either in a newspaper of general circulation within the school
district, by electronic transmission of the information to the department of
education for posting on the department's website or in the official newspaper
of the county as prescribed in section 11-255, or the governing board may
mail the annual financial report for the school district to each household in
the school district. If the governing board chooses to transmit the
report electronically to the department of education, the school district shall
provide a link on the school district's website to the report on the
department's website. If the governing board chooses to publish the
report in a newspaper, the size of the newspaper print shall be at least eight-point
type. The cost of publication or mailing shall be a charge against
the school district. The publisher's affidavit of publication shall
be filed by the governing board of the school district with the superintendent
of public instruction within thirty days after publication.

D. The governing board may publish or mail a summary
of the annual financial report in the same manner as provided in subsection C
of this section. The auditor general in conjunction with the
department of education shall prescribe the form of the summary of the annual
financial report for use by the governing boards
on or before
August 15
.

E. The superintendent of public instruction shall
compile the financial reports of the school districts, including expenditure
data for federal and state projects, and shall report to the governor and the
legislature on or before January 15 of each year as provided in section 15-255.

F.
Beginning in fiscal year 2020-2021,

The annual financial report prescribed by this section shall include the school
level data for charter schools and schools operated by school districts
prescribed in section 15-746, subsection E

required by section 15-747
.
END_STATUTE

Sec. 3. Section 15-1104, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-1104.

Unemployment compensation fund

Unemployment compensation monies shall be deposited with the
county treasurer who shall credit the deposits to the unemployment compensation
fund of the respective school district. The unemployment
compensation fund of a school district is a continuing fund
and
is
not subject to reversion
.
,
except that

Any monies in the fund determined by
the governing board, or the superintendent or chief administrative officer with
the approval of the governing board, to be in excess of insurance needs shall
be
either
used
for
reduction
of
to reduce
school district taxes for the budget
year
OR TRANSFERred TO THE school district's ADDITIONAL MONIES
FUND ESTABLISHED pursuant to SECTION 15-1232
.
END_STATUTE

Sec. 4.
Repeal

Section 15-1224, Arizona Revised
Statutes, is repealed.

Sec. 5.
Heading change

The article heading of title 15,
chapter 10, article 9, Arizona Revised Statutes, is changed from "CAREER
AND TECHNICAL EDUCATION PROJECTS FUND" to "SPECIAL FUNDS".

Sec. 6. Title
15, chapter 10, article 9, Arizona Revised Statutes, is amended by adding
section 15-1232, to read:

START_STATUTE
15-1232.

Additional monies fund; prohibition

A. each
school district governing board shall establish an additional monies fund.� The
fund consists of monies transferred pursuant to section 15-341,
subsection A, paragraph 14 or section 15-1104.� Monies in the fund are
not subject to reversion.� The school district may use Monies in the fund for
any lawful purpose.

B. A school district may not transfer
monies from the school district's maintenance and operations fund or
unrestricted capital outlay fund into the additional monies fund established
pursuant to subsection A of this section.
END_STATUTE

Sec. 7.
Transfer of monies

The governing board of each school
district shall close the bank account opened pursuant to section 15-1224,
Arizona Revised Statutes, as repealed by this act, and transfer any remaining
monies to the county treasurer for deposit
in
the additional monies fund of school districts that are established pursuant to
section 15-1232, Arizona Revised Statutes, as
added by this act.