K-12; school funding; revisions

SB1823 - 572R - I Ver

REFERENCE TITLE:
K-12; school funding; revisions

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SB 1823

Introduced by

Senator
Farnsworth

AN
ACT

amending section 15-185, Arizona
Revised Statutes; amending title 15, chapter 4, Arizona Revised Statutes, by
adding article 6; amending sections 15-808 and 15-901, Arizona
Revised Statutes; amending title 15, chapter 9, article 1, Arizona Revised
Statutes, by adding section 15-901.04; amending sections 15-924, 15-947,
15-971, 15-992, 15-2402 and 41-1276, Arizona Revised
Statutes; relating to school finance.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Section 15-185, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-185.

Charter schools; financing; civil penalties; transportation;
definition

A. A school district is not financially responsible
for any charter school that is sponsored by the state board of education, the
state board for charter schools, a university under the jurisdiction of the
Arizona board of regents, a community college district or a group of community
college districts.

B. Financial provisions for a charter school that is
sponsored by the state board of education, the state board for charter schools,
a university, a community college district or a group of community college
districts are as follows:

1. The charter school shall
calculate
a base support level as prescribed in section 15-943
use the state student funding formula prescribed in section 15-901.04
,
except that:

(a) Section 15-941 does not apply to these
charter schools.

(b) The small school weights prescribed in section
15-943, paragraph 1 apply if a charter holder holds one charter for one
or more school sites and the average daily membership for the school sites are
combined for the calculation of the small school weight. The small
school weight shall not be applied individually to a charter holder if one or
more of the following conditions exist and the combined average daily
membership derived from the following conditions is greater than six hundred:

(i) The organizational structure or management
agreement of the charter holder requires the charter holder or charter school
to contract with a specific management company.

(ii) The governing body of the charter holder has
identical membership to another charter holder in this state.

(iii) The charter holder is a subsidiary of a
corporation that has other subsidiaries that are charter holders in this state.

(iv) The charter holder holds more than one charter
in this state.

(c) Notwithstanding subdivision (b) of
this paragraph, for fiscal years 2015-2016 and 2016-2017, the
department of education shall reduce by thirty-three percent the amount
provided by the small school weight for charter schools prescribed in
subdivision (b) of this paragraph.

2. Notwithstanding paragraph 1 of this subsection,
the student count shall be determined initially using an estimated student
count based on actual registration of pupils before the beginning of the school
year.� Notwithstanding section 15-1042, subsection F, student level data
submitted to the department may be used to determine estimated student counts.�
After the first forty days, one hundred days or two hundred days in session, as
applicable, the charter school shall revise the student count to be equal to
the actual average daily membership, as defined in section 15-901, of the
charter school. Before the fortieth day, one hundredth day or two
hundredth day in session, as applicable, the state board of education, the
state board for charter schools, the sponsoring university, the sponsoring
community college district or the sponsoring group of community college
districts may require a charter school to report periodically regarding pupil
enrollment and attendance, and the department of education may revise its
computation of equalization assistance based on the report. A
charter school shall revise its student count, base support level and
charter

state
additional assistance before
May 15.� A charter school that overestimated its student count shall revise its
budget before May 15. A charter school that underestimated its
student count may revise its budget before May 15.

3. A charter school may use section 15-855 for
the purposes of this section. The charter school and the department
of education shall prescribe procedures for determining average daily
membership.

4. Equalization assistance for the
charter school shall be determined by adding the amount of the base support
level and charter additional assistance. The amount of the charter
additional assistance is� $2,131.90 per student count in preschool programs for
children with disabilities, kindergarten programs and grades one through eight
and� $2,484.69 per student count in grades nine through twelve.

5.

4.
The
state board of education shall apportion state aid from the appropriations made
for such purposes to the state treasurer for disbursement to the charter
schools in each county in an amount as determined by this
paragraph. The apportionments shall be made as prescribed in section
15-973, subsection B.

6.

5.
The
charter school shall not charge tuition for pupils who reside in this state,
levy taxes or issue bonds. A charter school may admit pupils who are
not residents of this state and shall charge tuition for those pupils in the
same manner prescribed in section 15-823.

7.

6.
Not
later than noon on the day preceding each apportionment date established
pursuant to paragraph
5
4
of
this subsection, the superintendent of public instruction shall furnish to the
state treasurer an abstract of the apportionment and shall certify the
apportionment to the department of administration, which shall draw its warrant
in favor of the charter schools for the amount apportioned.

C. If a pupil is enrolled in both a charter school
and a public school that is not a charter school, the sum of the daily
membership, which includes enrollment as prescribed in section 15-901,
subsection A, paragraph 1, subdivisions (a) and (b) and daily attendance as
prescribed in section 15-901, subsection A, paragraph 5, for that pupil
in the school district and the charter school shall not exceed
1.0. If a pupil is enrolled in both a charter school and a public
school that is not a charter school, the department of education shall direct
the average daily membership to the school with the most recent enrollment
date. On validation of actual enrollment in both a charter school
and a public school that is not a charter school and if the sum of the daily
membership or daily attendance for that pupil is greater than 1.0, the sum
shall be reduced to 1.0 and shall be apportioned between the public school and
the charter school based on the percentage of total time that the pupil is
enrolled or in attendance in the public school and the charter school.� The
uniform system of financial records shall include guidelines to apportion the
pupil enrollment and attendance as provided in this section.

D. Charter schools are allowed to accept grants and
gifts to supplement their state funding, but it is not the intent of the
charter school law to require taxpayers to pay twice to educate the same
pupils.� The base support level for a charter school or for a school district
sponsoring a charter school shall be reduced by an amount equal to the total
amount of monies received by a charter school from a federal or state agency if
the federal or state monies are intended for the basic maintenance and operations
of the school. The superintendent of public instruction shall
estimate the amount of the reduction for the budget year and shall revise the
reduction to reflect the actual amount before May 15 of the current
year. If the reduction results in a negative amount, the negative
amount shall be used in computing all budget limits and equalization
assistance, except that:

1. Equalization assistance shall not be less than
zero.

2. For a charter school sponsored by the state board
of education, the state board for charter schools, a university, a community
college district or a group of community college districts, the total of the
base support level and the
charter

state
additional
assistance shall not be less than zero.

E. If a charter school was a district
public school in the prior year and sponsored by the state board of education,
the state board for charter schools, a university, a community college district
or a group of community college districts, the reduction in subsection D of
this section applies. The reduction to the base support level of the
charter school shall equal the sum of the base support level and the charter
additional assistance received in the current year for those pupils who were
enrolled in the traditional public school in the prior year and are now
enrolled in the charter school in the current year.

F.

E.
Equalization
assistance for charter schools shall be provided as a single amount based on
average daily membership without categorical distinctions between maintenance
and operations or capital.

G.

F.
At the request of a charter school, the county
school superintendent of the county where the charter school is located may
provide the same educational services to the charter school as prescribed in
section 15-308, subsection A. The county school superintendent
may charge a fee to recover costs for providing educational services to charter
schools.

H.

G.
If
the sponsor of the charter school determines at a public meeting that the
charter school is not in compliance with federal law, with the laws of this
state or with its charter, the sponsor of a charter school may submit a request
to the department of education to withhold up to ten percent of the monthly
apportionment of state aid that would otherwise be due the charter
school. The department shall adjust the charter school's
apportionment accordingly. The sponsor shall provide written notice
to the charter school at least seventy-two hours before the meeting and
shall allow the charter school to respond to the allegations of noncompliance
at the meeting before the sponsor makes a final determination to notify the
department of education of noncompliance. The charter school shall
submit a corrective action plan to the sponsor on a date specified by the
sponsor at the meeting. The corrective action plan shall be designed
to correct deficiencies at the charter school and to ensure that the charter
school promptly returns to compliance. When the sponsor determines
that the charter school is in compliance, the department shall restore the full
amount of state aid payments to the charter school.

I.

H.
In
addition to the withholding of state aid payments pursuant to subsection
H
G
of this section, the sponsor of
a charter school may impose a civil penalty of $1,000 per occurrence if a
charter school fails to comply with the fingerprinting requirements prescribed
in section 15-183, subsection C or section 15-512. The
sponsor of a charter school shall not impose a civil penalty if it is the first
time the charter school is out of compliance with the fingerprinting
requirements and if the charter school provides proof within forty-eight
hours after written notification that an application for the appropriate
fingerprint check has been received by the department of public
safety. The sponsor of the charter school shall obtain proof that
the charter school has been notified, and the notification shall identify the
date of the deadline and shall be signed by both parties. The
sponsor of a charter school shall automatically impose a civil penalty of
$1,000 per occurrence if the sponsor determines that the charter school
subsequently violates the fingerprinting requirements. Civil
penalties pursuant to this subsection shall be assessed by requesting the
department of education to reduce the amount of state aid that the charter
school would otherwise receive by an amount equal to the civil
penalty. The amount of state aid withheld shall revert to the state
general fund at the end of the fiscal year.

J.

I.
A
charter school may receive and spend monies distributed by the department of
education pursuant to section 42-5029, subsection E, section 42-5029.02,
subsection A and section 37-521, subsection B.

K.

J.
If
a school district transports or contracts to transport pupils to the Arizona
state schools for the deaf and the blind during any fiscal year, the school
district may transport or contract with a charter school to transport sensory
impaired pupils during that same fiscal year to a charter school if requested
by the parent of the pupil and if the distance from the pupil's place of actual
residence within the school district to the charter school is less than the
distance from the pupil's place of actual residence within the school district
to the campus of the Arizona state schools for the deaf and the blind.

L.

K.
Notwithstanding
any other law, a university under the jurisdiction of the Arizona board of
regents, a community college district or a group of community college districts
shall not include any student in the student count of the university, community
college district or group of community college districts for state funding
purposes if that student is enrolled in and attending a charter school
sponsored by the university, community college district or group of community
college districts.

M.

L.
The
governing body of a charter school shall transmit a copy of its proposed budget
or the summary of the proposed budget and a notice of the public hearing to the
department of education for posting on the department of education's website
not later than ten days before the hearing and meeting. If the
charter school maintains a website, the charter school governing body shall
post on its website a copy of its proposed budget or the summary of the
proposed budget and a notice of the public hearing.

N.

M.
The
governing body of a charter school shall collaborate with the private
organization that is approved by the state board of education pursuant to
section 15-792.02 to provide approved board examination systems for the
charter school.

O.

N.
If
allowed by federal law, a charter school may opt out of federal grant
opportunities if the charter holder or the appropriate governing body of the
charter school determines that the federal requirements impose unduly
burdensome reporting requirements.

P.

O.
For
the purposes of this section, "monies intended for the basic maintenance
and operations of the school" means monies intended to provide support for
the educational program of the school, except that it does not include
supplemental assistance for a specific purpose or title VIII of the elementary
and secondary education act of 1965 monies. The auditor general
shall determine which federal or state monies meet this definition.
END_STATUTE

Sec. 2. Title
15, chapter 4, Arizona Revised Statutes, is amended by adding article 6, to
read:

ARTICLE
6. STATE STUDENT FUNDING FORMULA

START_STATUTE
15-495.

School districts; state student funding formula; election;
reversion to standard school finance formula

A. Notwithstanding
any other law, a school district that provides instruction to students in any
combination of kindergarten programs and grades one through twelve may elect to
use the state student funding formula prescribed in section 15-901.04 to
determine the school district's district support level if the school district
meets the following
requirements:

1. Does not have an override in place
pursuant to section 15-481 or 15-482 and either:

(
a
) Does not
owe any debt service payments on any class A or class B bond.

(
b
) Has four or
fewer remaining fiscal years in which the school district is scheduled to make
payments on any class A or class B bond.

2. Has a support level ratio that
exceeds
:

(
a
) ninety
percent in fiscal year 2026-2027.

(
b
) Eighty
percent in fiscal year 2027-2028.

(
c
) seventy
percent in fiscal year 2028-2029.

(
d
) sixty
percent in fiscal year 2029-2030.

(
e
) fifty
percent
in fiscal year 2030-2031 and each year THEREAFTER.

3. For the purposes of paragraph 2 of
this subsection,

The support
level ratio is calculated by:

(
a
) Dividing
the amount of equalization assistance calculated pursuant to section 15-971,
subsection A by the primary assessed valuation of the school district.

(
b
) Dividing
the amount calculated pursuant to subdivision (
a
) of this
paragraph by one-tenth of the qualifying tax rate prescribed in section
41-1276, subsection I, paragraph 2.

B. A school district that is eligible
under subsection A of this section may elect to use the state student funding
formula prescribed in section 15-901.04 pursuant to the following:

1. if the estimated total school
district primary property tax rate will be less than or equal to the prior year
total school district primary property tax rate, the school district governing
board may do either of the following:

(
a
) Vote at a
governing board meeting to use the state student funding formula prescribed in
section 15-901.04.

(
b
) Call an
election to submit to the voters the question of whether the school district
should use the state student funding formula prescribed in section 15-901.04.

2. If the estimated total school
district primary property tax rate will be greater than the prior year total
school district primary property tax rate, the school district governing board
may call an election to submit to the voters the question of whether the school
district should use the state student funding formula prescribed in section 15-901.04.

3. If the school district governing
board calls an election pursuant to paragraph 1 or 2 of this subsection,

the question must be submitted to a vote of the qualified
electors of the school district as prescribed in section 15-401 and
subject to section 15-402.� The question submitted to the qualified
electors must describe the tax rate that is associated with using the state
student funding formula prescribed in SECTION 15-901.04 and the estimated
cost of that tax rate for the owner of a single-family home that is valued at
$200,000.� The school district governing board shall order the election to be
held on the first Tuesday after the first Monday in November as prescribed in
section 16-204, subsection F.

4. If the school district is
authorized to use the state student funding formula pursuant to paragraph 1 or
2 of this subsection, the school district shall use the state student funding
formula prescribed in section 15-901.04 and shall no longer use the
standard school finance formula beginning in the next fiscal year following the
authorization.

C. A school district that is using
the state student funding formula prescribed in SECTION 15-901.04 may
not:

1. Use any other source of property
tax-generated funding other than the state student funding formula, including
funding generated pursuant to any of the following:

(
a
) Section 15-481.

(
b
) Section 15-482.

(
c
) Section 15-910.

(
d
) Section 15-946.

(
e
) Section 15-949.

(
f
) Section 15-954.

(
g
) Section 15-995.

(
h
) Chapter 9,
article 7 of this title.

2. Apply for or receive any funding
from the division of school facilities within the department of administration
or the school facilities oversight board, except that a school district may
receive funding for new school facilities pursuant to section 41-5741.

3. Receive district additional
assistance pursuant to section 15-961.

D. If a school district approves the
use of the state student funding formula as prescribed in subsection B of this
section and the school district governing board subsequently decides by a
majority vote of its members to revert to the standard school finance formula,
the school district governing board shall call an election to determine the
question of whether to no longer use the state student funding formula
prescribed in section 15-901.04 and to revert to the standard school
finance formula.� The question shall be submitted to a vote of the qualified
electors of the school district as prescribed in section 15-401 and
subject to section 15-402.� The school district governing board shall
order the election to be held on the first Tuesday after the first Monday in
November as prescribed in section 16-204, subsection F. If a
majority of the qualified electors of the school district who vote on the
question votes to no longer use the state student funding formula prescribed in
section 15-901.04 and to revert to the standard school finance formula,
the school district may use all other available funding authorized by law in
the next fiscal year following the election held pursuant to this subsection.�
A school district may not submit a question for an override or class A or class
B bond along with a question to opt out of the state student funding formula
prescribed in SECTION 15-901.04 in the same election.

E. For the purposes of this section,
school district does not include a career technical education district as
defined in section 15-391.
END_STATUTE

Sec. 3. Section 15-808, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-808.

Arizona online instruction; reports; definitions

A. Arizona online instruction shall be instituted to
meet the needs of pupils in the information age. The state board of
education shall select district public schools and state-approved charter
authorizers shall sponsor charter schools to be online course providers or
online schools. The state board of education and state-approved
charter authorizers shall develop standards for the approval of online course
providers and online schools based on the following criteria:

1. The depth and breadth of curriculum choices.

2. The variety of educational methodologies employed
by the school and the means of addressing the unique needs and learning styles
of targeted pupil populations, including computer-assisted learning
systems, virtual classrooms, virtual laboratories, electronic field trips,
e-mail
email
, virtual tutoring,
online help desk, group chat sessions and noncomputer-based activities
performed under the direction of a certificated teacher.

3. The availability of an intranet or private
network to safeguard pupils against predatory and pornographic elements of the
internet.

4. The availability of filtered research access to
the internet.

5. The availability of private individual
e-mail
email
between pupils,
teachers, administrators and parents in order to protect the confidentiality of
pupil records and information.

6. The availability of faculty members who are
experienced with computer networks, the internet and computer animation.

7. The extent to which the school intends to develop
partnerships with universities, community colleges and private businesses.

8. The services offered to populations with
developmental disabilities.

9. The grade levels that will be served.

B. Each new school that provides online instruction
shall provide online instruction on a probationary status. After a
new school that provides online instruction has clearly demonstrated the
academic integrity of its instruction through the actual improvement of the
academic performance of its students, the school may apply to be removed from
probationary status. The state board of education or the state-approved
charter authorizer that sponsored the charter school shall remove from Arizona
online instruction any probationary school that fails to clearly demonstrate
improvement in academic performance within three years measured against goals
in the approved application and the state's accountability system.� All pupils
who participate in Arizona online instruction shall reside in this state.�
Pupils who participate in Arizona online instruction are subject to the testing
requirements prescribed in chapter 7, article 3 of this title.� On enrollment,
the school shall notify the parents or guardians of the pupil of the state
testing requirements.� If a pupil fails to comply with the testing requirements
and the school administers the tests pursuant to this subsection to less than
ninety-five percent of the pupils in Arizona online instruction, the
pupil shall not be allowed to participate in Arizona online instruction.

C. The state board of education and state-approved
charter authorizers shall develop annual reporting mechanisms for schools that
participate in Arizona online instruction.

D. The department of education shall compile the
information submitted in the annual reports by schools participating in Arizona
online instruction. The department of education shall submit the
compiled report to the governor, the speaker of the house of representatives
and the president of the senate by November 15 of each year.

E. Each school selected for Arizona online
instruction shall ensure that a daily log is maintained for each pupil who
participates in Arizona online instruction.� The daily log shall describe the
amount of time spent by each pupil participating in Arizona online instruction
pursuant to this section on academic tasks. The daily log shall be
used by the school district or charter school to qualify the pupils who
participate in Arizona online instruction in the school's average daily attendance
calculations pursuant to subsection F of this section.

F. If a pupil is enrolled in a school district or
charter school and also participates in Arizona online instruction, the sum of
the average daily membership, which includes enrollment as prescribed in
section 15-901, subsection A, paragraph 1, subdivisions (a) and (b) and
daily attendance as prescribed in section 15-901, subsection A, paragraph
5, for that pupil in the school district or charter school and in Arizona
online instruction shall not exceed 1.0.� If the pupil is enrolled in a school
district or a charter school and also participates in Arizona online
instruction and the sum of the daily membership or daily attendance for that
pupil is greater than 1.0, the sum shall be reduced to 1.0 and shall be
apportioned between the school district, unless the school district is a career
technical education district subject to the apportionment requirements of
section 15-393, or charter school and Arizona online instruction based on
the percentage of total time that the pupil is enrolled or in attendance in the
school district or charter school and Arizona online
instruction. The uniform system of financial records shall include
guidelines for the apportionment of the pupil enrollment and attendance as
provided in this subsection. Pupils in Arizona online instruction do
not incur absences for purposes of this subsection and may generate an average
daily attendance of 1.0 for attendance hours during any hour of the day, during
any day of the week and at any time between July 1 and June 30 of each fiscal
year.� For kindergarten programs and grades one through eight, average daily
membership shall be calculated by dividing the instructional hours as reported
in the daily log required in subsection E of this section by the applicable
hourly requirements prescribed in section 15-901.� For grades nine
through twelve, average daily membership shall be calculated by dividing the
instructional hours as reported in the daily log required in subsection E of
this section by nine hundred. The average daily membership of a
pupil who participates in online instruction shall not exceed
1.0. Average daily membership shall not be calculated on the one
hundredth day of instruction for the purposes of this
section. Funding shall be determined as follows:

1. A pupil who is enrolled full-time

in
Arizona online instruction shall be funded for online instruction at ninety-five
percent of the base support level that would be calculated for that pupil if
that pupil were enrolled as a full-time student in a school district or
charter school that does not participate in Arizona online
instruction.
Charter

State
additional
assistance and district additional assistance shall be calculated in the same
manner they would be calculated if the student were enrolled in a district or
charter school that does not participate in Arizona online instruction.

2. A pupil who is enrolled part-time

in
Arizona online instruction shall be funded for online instruction at eighty-five
percent of the base support level that would be calculated for that pupil if
that pupil were enrolled as a part-time student in a school district or
charter school that does not participate in Arizona online
instruction.
Charter

State
additional
assistance and district additional assistance shall be calculated in the same
manner they would be calculated if the student were enrolled in a district or
charter school that does not participate in Arizona online instruction.

G. If the academic achievement of a pupil declines
while the pupil is participating in Arizona online instruction, the pupil's
parents, the pupil's teachers and the principal or head teacher of the school
shall confer to evaluate whether the pupil should be allowed to continue to
participate in Arizona online instruction.

H. To ensure the
academic integrity of pupils who participate in online instruction, Arizona
online instruction shall include multiple diverse assessment measures and the
proctored administration of required state standardized tests.

I. A school district or charter school may not
charge a fee to a pupil who takes an examination in a particular course to
obtain academic credit, pursuant to section 15-701.01, subsection I, from
the school district or charter school if the academic credit for a course was
previously earned in an Arizona online instruction course or at any public
school in this state.� Any test administered pursuant to this subsection shall
be an assessment that is aligned to the course-relevant state academic
standards.

J. For the purposes
of this section:

1. "Full-time
student" means:

(a) A student who is at least five years of age
before September 1 of a school year and who is enrolled in a school
kindergarten program that meets at least three hundred forty-six hours
during the school year.

(b) A student who is at least six years of age
before September 1 of a school year, who has not graduated from the highest
grade taught in the school and who is regularly enrolled in a course of study
required by the state board of education. For first, second and
third grade students, the instructional program shall meet at least seven
hundred twelve hours. For fourth, fifth and sixth grade students, the
instructional program shall meet at least eight hundred ninety hours during the
school year.

(c) Seventh and eighth grade students or ungraded
students who are at least twelve, but under fourteen, years of age on or before
September 1 and who are enrolled in an instructional program of courses that
meets at least one thousand sixty-eight hours during the school year.

(d) For high schools, a student who has not
graduated from the highest grade taught in the school district, or an ungraded
student who is at least fourteen years of age on or before September 1, and who
is enrolled in at least four courses throughout the year that meet at least
nine hundred hours during the school year. A full-time student
shall not be counted more than once for computation of average daily
membership.

2. "Online course provider" means a school
other than an online school that is selected by the state board of education or
a state-approved charter authorizer to participate in Arizona online
instruction pursuant to this section and that provides at least one online
academic course that is approved by the state board of education.

3. "Online school" means a school that
provides at least four online academic courses or one or more online courses
for the equivalent of at least five hours each day for one hundred eighty
school days and that is a charter school that is sponsored by a state-approved
charter authorizer or a district public school that is selected by the state
board of education to participate in Arizona online instruction.

4. "Part-time student" means:

(a) Any student who is enrolled in a program that
does not meet the definition in paragraph 1 of this subsection shall be funded
at eighty-five percent of the base support level that would be calculated
for that pupil if that pupil were enrolled as a part-time student in a school
district or charter school that does not participate in Arizona online
instruction.

(b) A part-time student of seventy-five
percent average daily membership shall be enrolled in at least three subjects
throughout the year that offer for first, second and third grade students at
least five hundred thirty-four instructional hours in a school year and
for fourth, fifth and sixth grade students at least six hundred sixty-eight
instructional hours in a school year. A part-time student of
fifty percent average daily membership shall be enrolled in at least two
subjects throughout the year that offer for first, second and third grade
students at least three hundred fifty-six instructional hours in a school
year and for fourth, fifth and sixth grade students at least four hundred forty-five
instructional hours in a school year. A part-time student of
twenty-five percent average daily membership shall be enrolled in at
least one subject throughout the year that offers for first, second and third
grade students at least one hundred seventy-eight instructional hours in
a school year and for fourth, fifth and sixth grade students at least two
hundred twenty-three instructional hours in a school year.

(c) For seventh and eighth grade students, a part-time
student of seventy-five percent average daily membership shall be
enrolled in at least three subjects throughout the year that offer at least
eight hundred one instructional hours in a school year.� A part-time
student of fifty percent average daily membership shall be enrolled in at least
two subjects throughout the year that offer at least five hundred thirty-four
instructional hours in a school year.� A part-time student of twenty-five
percent average daily membership shall be enrolled in at least one subject
throughout the year that offers at least two hundred sixty-seven
instructional hours in a school year.

(d) For high school students, a part-time student of
seventy-five percent average daily membership shall be enrolled in at
least three subjects throughout the year that offer at least six hundred
seventy-five instructional hours in a school year.� A part-time
student of fifty percent average daily membership shall be enrolled in at least
two subjects throughout the year that offer at least four hundred fifty
instructional hours in a school year.� A part-time student of twenty-five
percent average daily membership shall be enrolled in at least one subject
throughout the year that offers at least two hundred twenty-five
instructional hours in a school year.

5. "State-approved charter
authorizer" means any charter school sponsor authorized pursuant to
section 15-183.
END_STATUTE

Sec. 4.
Heading change

A. The
chapter heading of title 15, chapter 9, Arizona Revised Statutes, is changed
from "SCHOOL DISTRICT BUDGETING AND FINANCIAL ASSISTANCE" to
"SCHOOL BUDGETING AND FINANCIAL ASSISTANCE".

B. The
article heading of title 15, chapter 9, article 1, Arizona Revised Statutes, is
changed from "GENERAL PROVISIONS FOR SCHOOL DISTRICT BUDGETS" to
"GENERAL PROVISIONS".

Sec. 5. Section 15-901, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-901.

Definitions

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

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

(a) "Fractional student" means:

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

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

(b) "Full-time student" means:

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

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

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

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

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

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

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

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

2. "Budget year" means the fiscal year for
which the school district is budgeting and that immediately follows the current
year.

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

(a) Grades one through eight.

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

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

5. "Daily attendance" means:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

7. "District
support level" means
:

(
a
) For a school district that uses the standard school
finance formula,
the base support level plus the transportation support
level.

(
b
) For a
school district that elects pursuant to SECTION 15-495 to use the state
student funding formula prescribed in section 15-901.04, the base support
level.

8. "Eligible students" means:

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

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

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

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

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

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

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

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

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

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

13. "Revenue control limit" means
:

(
a
) For a
school district that uses the standard school finance formula,
the base
revenue control limit plus the transportation revenue control limit.

(
b
) For a
school district that elects pursuant to SECTION 15-495 to use the state
student funding formula prescribed in section 15-901.04, the base revenue
control limit.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(b) If employed less than full time, multiply 1.00
by the percentage of a full school day, or its equivalent, or a full class
load, or its equivalent, for which the teacher is employed as determined by the
governing board.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Sec. 6. Title 15, chapter 9, article 1, Arizona
Revised Statutes, is amended by adding section 15-901.04, to read:

START_STATUTE
15-901.04.

State student funding formula; calculation

A. The state student funding formula
is established for school districts that elect pursuant to section 15-495
to use this funding formula and for charter schools.� Each school district that
uses the state student funding formula and Each charter school shall:

1. Calculate a base support level as
prescribed in section 15-943.

2. Add the base support level amount
calculated under paragraph 1 of this subsection and state additional
assistance.� The amount of state additional assistance is:

(
a
) $2,025.29
per student count in preschool programs for children with disabilities,
kindergarten programs and grades one through eight.

(
b
) $2,360.44
per student count in grades nine through twelve.

B. For charter schools, the amount
calculated under subsection A of this section is the equalization assistance
for the charter school.

C. eACH SCHOOL DISTRICT that elects
to use the state student funding formula SHALL SUBTRACT FROM THE AMOUNT
CALCULATED PURSUANT TO SUBSECTION a OF THIS SECTION AN AMOUNT EQUAL TO THE
TOTAL AMOUNT OF MONIES RECEIVED BY THE SCHOOL DISTRICT FROM A FEDERAL OR STATE
AGENCY THAT is INTENDED TO OFFSET PROPERTY TAX REVENUE NOT RECEIVED FROM
FEDERAL LANDS.
END_STATUTE

Sec. 7. Section 15-924, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-924.

In lieu of transportation grants

A. Notwithstanding any other law,
beginning
in the 2021-2022 school year,
a school district may use a portion
of its transportation funding allocated pursuant to sections 15-945 and
15-946 to provide in lieu of transportation grants to parents of students
who attend the school district pursuant to a plan submitted to the department
of education.� School districts may issue grants to support individual parents
or neighborhood carpools in transporting students to school. A
school district's transportation funding allocation may not be reduced or
otherwise diminished due to the school district awarding grants pursuant to
this section.

B. Notwithstanding any other law,
beginning
in the 2021-2022 school year,
a charter school may use a portion
of its
charter

state
additional
assistance funding allocated pursuant to section
15-185

15-901.04
to provide in lieu of transportation
grants to parents of students who attend the charter school pursuant to a plan
submitted to the department of education.� Charter schools may issue grants to
support individual parents or neighborhood carpools in transporting students to
school.� Participating charter schools shall report to the department regarding
the monies awarded to parents as required by the department.

C. The department of education shall adopt policies
and procedures to account for expenditures under this section and to require
proof of attendance for students whose transportation is supported through
grants under this section.
END_STATUTE

Sec. 8. Section 15-947, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-947.

Revenue control limit; district support level; general budget
limit; unrestricted total capital budget limit; district additional assistance
limit; state additional assistance limit

A. The revenue control limit
for a
school district
is equal to
:

1. For a school district that uses
the standard school finance formula,
the sum of the base revenue control
limit determined in section 15-944 and the transportation revenue control
limit determined in section 15-946.

2. For a school district that elects
pursuant to section 15-495 to use the state student funding formula prescribed
in section 15-901.04, the base revenue control limit.

B. The district support level
for a
school district
is equal to
:

1. For a school district that uses
the standard school finance formula,
the sum of the base support level
determined in section 15-943 and the transportation support level
determined in section 15-945.

2. For a school district that elects
pursuant to section 15-495 to use the state student funding formula
prescribed in section 15-901.04, the base support level determined in
section 15-943.

C. The general budget limit for each school
district, for each fiscal year, is the sum of the following:

1. The maintenance and operations portion of the
revenue control limit for the budget year.

2. The maintenance and operation portion of the
following amounts:

(a) Amounts that are fully funded by revenues other
than a levy of taxes on the taxable property within the school district, as
listed below:

(i) Amounts budgeted as the budget balance
carryforward as provided in section 15-943.01.

(ii) Tuition revenues for attendance of nonresident
pupils.

(iii) State assistance as provided in section 15-976.

(iv) Special education revenues as provided in
section 15-825, subsection D and section 15-1204.

(v) Title VIII of the
elementary and secondary education act of 1965 assistance determined for
children with disabilities, children with specific learning disabilities,
children residing on Indian lands and children residing within the boundaries
of an accommodation school that is located on a military reservation and that
is classified as a heavily impacted local educational agency pursuant to 20
United States Code section 7703 as provided in section 15-905,
subsections K and O.

(vi) Title VIII of the elementary and secondary
education act of 1965 administrative costs as provided in section 15-905,
subsection P.

(vii) State assistance for excess tuition as
provided in section 15-825.01.

(viii) Transportation revenues for attendance of
nonresident pupils.

(b) Amounts approved pursuant to an override
election as provided in section 15-481 for the applicable fiscal year.

(c) Amounts authorized by the county school
superintendent pursuant to section 15-974, subsection B.

(d) Expenditures for complying with a court order of
desegregation as provided in section 15-910.

(e) Interest on registered warrants or tax
anticipation notes as provided in section 15-910.

(f) Amounts budgeted for a jointly owned and
operated career and technical education and vocational education center as provided
in section 15-910.01.

3. The maintenance and operations portion of
district additional assistance
or state additional assistance
for
the budget year.

4. Any other budget item that is budgeted in the
maintenance and operation section of the budget and that is specifically exempt
from the revenue control limit or district additional assistance.

D. The unrestricted capital budget limit, for each
school district for each fiscal year, is the sum of the following:

1. The federal impact adjustment as determined in
section 15-964 for the budget year.

2. Any other budget item that is budgeted in the
capital outlay section of the budget and that is specifically exempt from
district additional assistance.

3. The unrestricted capital portion of the amounts
contained in subsection C of this section.

4. The unexpended budget balance in the unrestricted
capital outlay fund from the previous fiscal year.

5. The net interest earned in the unrestricted
capital outlay fund from the previous fiscal year.
END_STATUTE

Sec. 9. Section 15-971, Arizona Revised Statutes, is amended to read:

START_STATUTE
15-971.

Determination of equalization assistance payments from county and
state funds for school districts

A. Equalization
assistance for education is computed by determining the total of the following:

1. The lesser of a school district's revenue control
limit or district support level as determined in section 15-947.

2. District additional assistance of a school
district as determined in section 15-961
or state
additional assistance, if applicable, pursuant to section 15-901.04
.

B. From the total of the amounts determined in
subsection A of this section subtract:

1. The amount that would be produced by levying the
applicable qualifying tax rate determined pursuant to section 41-1276 for
a high school district or a common school district within a high school
district that does not offer instruction in high school subjects as provided in
section 15-447.

2. The amount that would be produced by levying the
applicable qualifying tax rate determined pursuant to section 41-1276 for
a unified school district, a common school district not within a high school
district or a common school district within a high school district that offers
instruction in high school subjects as provided in section 15-447.� The
qualifying tax rate shall be applied in the following manner:

(a) For the purposes of the amount determined in
subsection A, paragraph 1 of this section:

(i) Determine separately the percentage that the
weighted student count in preschool programs for children with disabilities,
kindergarten programs and grades one through eight and the weighted student
count in grades nine through twelve is to the weighted student count determined
in subtotal A as provided in section 15-943, paragraph 2, subdivision
(a).

(ii) Apply the percentages determined in item (i) of
this subdivision to the amount determined in subsection A, paragraph 1 of this
section.

(b) For the purposes of the amounts determined in
subsection A, paragraph 2 of this section, determine separately the amount of
the district additional assistance attributable to the student count in
preschool programs for children with disabilities, kindergarten programs and
grades one through eight and grades nine through twelve.

(c) From the amounts determined in subdivisions (a)
and (b) of this paragraph, subtract the levy that would be produced by the
current qualifying tax rate for a high school district or a common school
district within a high school district that does not offer instruction in high
school subjects as provided in section 15-447. If the
qualifying tax rate generates a levy that is in excess of the total determined
in subsection A of this section, the school district is not eligible for
equalization assistance. For the purposes of this subsection,
"assessed valuation" includes the values used to determine voluntary
contributions collected pursuant to title 9, chapter 4, article 3 and title 48,
chapter 1, article 8 and the assessed value of all property subject to the
government property lease excise tax pursuant to title 42, chapter 6, article
5.

3. The amount that would be produced by levying a
qualifying tax rate in a career technical education district, which shall be
$.05 per $100 assessed valuation unless the legislature sets a lower rate by
law.

C. State aid for
equalization assistance for education for a school district shall be the
equalization assistance for education for a school district as provided in
subsections A and B of this section.

D. Equalization assistance for education shall be
paid from appropriations for that purpose to the school districts as provided
in section 15-973.

E. A school district shall report expenditures on
approved career and technical education and vocational education programs in
the annual financial report according to uniform guidelines prescribed by the
uniform system of financial records and in order to facilitate compliance with
sections 15-255 and 15-904.

F. The additional weight for state aid purposes
given to special education as provided in section 15-943 shall be given
to school districts only if special education programs comply with chapter 7,
article 4 of this title and the conditions and standards prescribed by the
superintendent of public instruction pursuant to rules of the state board of
education for pupil identification and placement pursuant to sections 15-766
and 15-767.

G. In addition to state general fund appropriations,
all amounts received pursuant to section 37-521, subsection B, paragraph
3, section 42-5029, subsection E, paragraph 5 and section 42-5029.02,
subsection A, paragraph 5 and from any other source for the purposes of this
section are appropriated for state aid to schools as provided in this section.

H. The total amount of state monies that may be
spent in any fiscal year for state equalization assistance shall not exceed the
amount appropriated or authorized by section 35-173 for that
purpose. This section does not impose a duty on an officer, agent or
employee of this state to discharge a responsibility or create any right in a
person or group if the discharge or right would require an expenditure of state
monies in excess of the expenditure authorized by legislative appropriation for
that specific purpose.
END_STATUTE

Sec. 10. Section 15-992, Arizona Revised Statutes, is amended to read:

START_STATUTE
15-992.

School district tax levy; additional tax in districts ineligible
for equalization assistance; definition

A. The board of
supervisors of each county, at the time of levying other taxes, shall annually
levy school district taxes on the property in any school district in which
additional amounts are required, which shall be at rates prescribed in this
section. A delinquency factor for estimated uncollected taxes may
not be included in the computation of the primary tax rate for school district
taxes. Local property taxes may not be levied for any deficit in the
classroom site fund.� The taxes shall be added to and collected in the same
manner as other county taxes on the property within the school
district. The amount of the school district taxes levied on the
property in a particular school district shall be paid into the school fund of
that school district.

B. At the same time of levying taxes as provided in
subsection A of this section, the county board of supervisors shall annually
levy an additional tax in each school district that is not eligible for
equalization assistance as provided in section 15-971 in an amount
determined as follows:

1. Determine the levy that would be produced by
fifty percent of the applicable qualifying tax rate
, prescribed
in section 15-971, subsection B,
per $100 assessed valuation.
� The applicable qualifying tax rate:

(
a
) For a
school district that uses the standard school finance formula is the applicable
qualifying tax rate prescribed in section 15-971, subsection B.

(
b
) For a
school district that elects pursuant to section 15-495 to use the state
student funding formula prescribed in section 15-901.04, notwithstanding
section 15-971, subsection B, is the applicable qualifying tax rate
prescribed in section 41-1276, subsection I, paragraph 2.

2. Subtract the amounts determined in section 15-971,
subsection A and subsection F of this section from the levy determined in
paragraph 1 of this subsection. This difference is the additional
amount levied or collected as voluntary contributions pursuant to title 48,
chapter 1, article 8, except that if the difference is zero or is a negative
number, there shall be no levy.

C. Monies collected pursuant to subsections B and F
of this section shall be transmitted to the state treasurer for deposit in the
state general fund to aid in school financial assistance.

D. The additional tax prescribed in subsection B of
this section is considered to be primary property tax for purposes of section
15-972, subsection B, except that this state is not required to make the
payments prescribed in section 15-972, subsection H for these reductions
in taxes.

E. The tax levy prescribed in subsection A of this
section shall be a rate equal to
:

1. For a school district that uses
the standard school finance formula,
the applicable qualifying tax rate
or rates as prescribed in section 15-971, subsection B or a rate that
would result in a levy that equals the school district equalization assistance
base prescribed in section 15-971 subtracted by any amount received
pursuant to section 15-905, subsections K, O and P per $100 of assessed
valuation used for primary property taxes, whichever is less.

2. For a school district that elects
pursuant to section 15-495 to use the state student funding formula
prescribed in section 15-901.04, the applicable qualifying tax rate or
rates as prescribed in section 41-1276, subsection I, paragraph 2 or a
rate that would result in a levy that equals the school district equalization
assistance base prescribed in section 15-971 minus any amount received
pursuant to section 15-905, subsections K, O and P per $100 of assessed
valuation used for primary property taxes, whichever is less.

F. At the same time of levying taxes as provided in
subsection A of this section, the county board of supervisors shall annually
levy an additional tax in each common school district not within a high school
district that is equal to the lesser of:

1. A rate that is equal to the applicable qualifying
tax rate or rates as prescribed in section 15-971, subsection B.

2. A rate that would result in a levy that equals
the statewide average per pupil funding for high school pupils multiplied by
the student count as defined in section 15-901 of resident high school
pupils in the common school district not within a high school district during
the prior school year. On or before July 1 of each year, the
department of education shall provide each common school district not within a
high school district with the student count as defined in section 15-901
of resident high school pupils in the district during the prior school year. On
or before July 1 of each year, the department of education shall provide each
county board of supervisors with the statewide average per pupil funding for
high school pupils, the student count as defined in section 15-901 of
resident high school pupils in the common school district not within a high
school district during the prior school year and any other information
requested by the county board of supervisors for the purposes of levying the
tax prescribed in this subsection. For the purposes of this
paragraph, "per pupil funding" means the amount calculated pursuant
to section 15-943, paragraph 2, subdivision (a) for grades nine through
twelve multiplied by the sum of the following:

(a) District additional assistance pursuant to
section 15-961, subsections A, B and C for a school district with a
student count of six hundred or more in grades nine through twelve.

(b) The base level amount prescribed by section 15-901.

G. At the time of levying taxes as provided in
subsection E of this section, the county school superintendent shall annually
validate any additional primary school district tax levy amount requests from
each school district and levy the sum of the following amounts:

1. For a school district that uses
the standard school finance formula:

1.

(
a
)
A rate that would result in a levy that equals the
difference between the transportation revenue control limit as determined in
section 15-946 and the transportation support level as determined in
section 15-945 or a lesser amount.

2.

(
b
)
A rate that would result in a levy that equals any
amount pursuant to section 15-910.

3.

(
c
)
A rate that would result in a levy that equals any
amount for tuition loss as determined in section 15-954.

4.

(
d
)
A rate that would result in a levy that equals any
amount for the small school adjustment as determined in section 15-949.

5.

(
e
)
A rate that would result in a levy that equals any
amount for liabilities in excess of the school district budget pursuant to
section 15-907.

6.

(
f
)
A rate that would result in a levy that equals any
amount for adjacent ways pursuant to section 15-995.

7.

(
g
)
A rate that would result in a levy that equals the
amount not captured by the qualifying tax rate as a result of property subject
to the government property lease excise tax pursuant to title 42, chapter 6,
article 5 as calculated in section 15-971, subsection B, paragraph 2.

8.

(
h
)
Following the recommendation of the county school
superintendent and on approval by the county board of supervisors, for a school
district that is not eligible for state aid, a rate that would result in a levy
that equals any legal amount not levied in the current year as a result of
underestimated average daily membership in the current year or as a result of a
judgment in accordance with section 42-16213.

9.

(
i
)
A rate that would result in a levy that equals any
amount pursuant to a qualifying dropout prevention program that was originally
established by law in 1987.

10.

(
j
)
On the recommendation of the county school
superintendent and on approval by the county board of supervisors before
adoption of tax rates pursuant to section 42-17151, a rate that would
result in a levy that equals any separately stated cash deficit from the prior
fiscal year resulting from an anticipated or actual deviation in the property
tax roll, including resolutions or judgments pursuant to title 42, chapter 16,
articles 5 and 6.

2. For a school district that elects
pursuant to section 15-495 to use the state student funding formula
prescribed in section 15-901.04:

(
a
) A rate that
would result in a levy that equals the amount not captured by the qualifying
tax rate as a result of property subject to the government property lease
excise tax pursuant to title 42, chapter 6, article 5 as calculated in section
15-971, subsection b, paragraph 2.

(
b
) Following
the recommendation of the county school superintendent and on approval by the
county board of supervisors, for a school district that is not eligible for
state aid, a rate that would result in a levy that equals any legal amount not
levied in the current year as a result of underestimated average daily
membership in the current year or as a result of a judgment in accordance with
section 42-16213.

(
c
) On the
recommendation of the county school superintendent and on approval by the
county board of supervisors before adoption of tax rates pursuant to section 42-17151,
a rate that would result in a levy that equals any separately stated cash
deficit from the prior fiscal year resulting from an anticipated or actual
deviation in the property tax roll, including resolutions or judgments pursuant
to title 42, chapter 16, articles 5 and 6.

H. For the purposes of this section, "assessed
valuation" includes the values used to determine voluntary contributions
collected pursuant to title 9, chapter 4, article 3 and title 48, chapter 1,
article 8.
END_STATUTE

Sec. 11. Section 15-2402, Arizona Revised Statutes, is amended to read:

START_STATUTE
15-2402.

Arizona empowerment scholarship accounts; funds

A. Arizona
empowerment scholarship accounts are established to provide options for the
education of students in this state.

B. To enroll a qualified student for an Arizona
empowerment scholarship account, the parent of the qualified student must sign
an agreement to do all of the following:

1. Use a portion of the Arizona empowerment
scholarship account monies allocated annually to provide an education for the
qualified student in at least the subjects of reading, grammar, mathematics,
social studies and science, unless the Arizona empowerment scholarship account
is allocated monies according to a transfer schedule other than quarterly
transfers pursuant to section 15-2403, subsection G.

2. Not enroll the qualified student in a school
district or charter school and release the school district from all obligations
to educate the qualified student.� This paragraph does not:

(a) Relieve the school district or charter school
that the qualified student previously attended from the obligation to conduct
an evaluation pursuant to section 15-766.

(b) Require the qualified student to withdraw from
a

any
school district or charter
school before enrolling for an Arizona empowerment scholarship account if the
qualified student withdraws from the school district or charter school before
receiving any monies in the qualified student's Arizona empowerment scholarship
account.

(c) Prevent the qualified student from applying in
advance for an Arizona empowerment scholarship account to be funded beginning
the following school year, subject to section 15-2403, subsection H.

3. Not accept a scholarship from a school tuition
organization pursuant to title 43 concurrently with an Arizona empowerment
scholarship account for the qualified student in the same year a parent signs
the agreement pursuant to this section.

4. Use monies deposited in the qualified student's
Arizona empowerment scholarship account only for the following expenses of the
qualified student:

(a) Tuition or fees at a qualified school that
requires all teaching staff and
school
personnel who have
unsupervised contact with students to be fingerprinted.

(b) Textbooks required by a qualified school.

(c) If the qualified student meets any of the
criteria specified in section 15-2401, paragraph 7, subdivision (a), item
(i), (ii) or (iii) as determined by a school district or by an independent
third party pursuant to section 15-2403, subsection J, the qualified
student may use the following additional services:

(i) Educational therapies from a licensed or
accredited practitioner or provider, including and up to any amount not covered
by insurance if the expense is partially paid by a health insurance policy for
the qualified student.

(ii) A licensed or accredited paraprofessional or
educational aide.

(iii) Tuition for vocational and life skills
education approved by the department.

(iv) Associated goods and services that include
educational and psychological evaluations, assistive technology rentals and
braille translation goods and services approved by the department.

(d) Tutoring or teaching services provided by an
individual who is not subject to disciplinary action by the state board of
education for immoral or unprofessional conduct pursuant to section 15-505
or 15-534.04 or a facility that is accredited by a state, regional or
national accrediting organization. The department shall ensure
that
any individual who provides tutoring or teaching services
to one or more qualified students pursuant to this subdivision is not subject
to disciplinary action by the state board of education.� The department shall
also remove any individual who is subject to disciplinary action by the state
board of education from all platforms that the department provides to parents
and qualified students for the purchase of goods or educational services using
account monies.

(e) Curricula and supplementary materials.

(f) Tuition or fees for a nonpublic online learning
program.

(g) Fees for a nationally standardized norm-referenced
achievement test, an advanced placement examination or any exams related to
college or university admission.

(h) Tuition or fees at an eligible postsecondary
institution.

(i) Textbooks required by an eligible postsecondary
institution.

(j) Fees to manage the Arizona empowerment
scholarship account.

(k) Services provided by a public school, including
individual classes and extracurricular programs.

(l) Insurance or surety bond payments.

(m) Uniforms purchased from or through a qualified
school.

(n) If the qualified student meets the criteria
specified in section 15-2401, paragraph 7, subdivision (a), item (i),
(ii) or (iii) and if the qualified student is in the second year prior to the
final year of a contract executed pursuant to this article, costs associated
with an annual education plan conducted by an independent evaluation
team. The department shall prescribe minimum qualifications for
independent evaluation teams pursuant to this subdivision and factors that
teams must use to determine whether the qualified student shall be eligible to
continue to receive monies pursuant to this article through the school year in
which the qualified student reaches twenty-two years of
age. An independent evaluation team that provides an annual
education plan pursuant to this subdivision shall submit a written report that
summarizes the results of the evaluation to the parent of the qualified student
and to the department on or before July 31. The written report
submitted by the independent evaluation team is valid for one
year. If the department determines that the qualified student meets
the eligibility criteria prescribed in the annual education plan, the qualified
student is eligible to continue to receive monies pursuant to this article until
the qualified student reaches twenty-two years of age, subject to annual
review. A parent may appeal the department's decision pursuant to
title 41, chapter 6, article 10. As an addendum to a qualified
student's final-year contract, the department shall provide the following
written information to the parent of the qualified student:

(i) That the qualified student will not be eligible
to continue to receive monies pursuant to this article unless the results of an
annual education plan conducted pursuant to this subdivision demonstrate that
the qualified student meets the eligibility criteria prescribed in the annual
education plan.

(ii) That the parent is entitled to obtain an annual
education plan pursuant to this subdivision to determine whether the qualified
student meets the eligibility criteria prescribed in the annual education plan.

(iii) A list of independent evaluation teams that
meet the minimum qualifications prescribed by the department pursuant to this
subdivision.

(o) Public transportation services in this state,
including a commuter pass for the qualified student, or transportation network
services as defined in section 28-9551 between the qualified student's
residence and a qualified school in which the qualified student is enrolled.

(p) Computer hardware and technological devices
primarily used for an educational purpose. For the purposes of this
subdivision, "computer hardware and technological devices":

(i) Includes calculators, personal computers,
laptops, tablet devices, microscopes, telescopes and printers.

(ii) Does not include entertainment and other
primarily noneducational devices, including televisions, telephones, video game
consoles and accessories, and home theatre and audio equipment.

5. Not file an affidavit of intent to homeschool
pursuant to section 15-802, subsection B, paragraph 2 or 3.

6. Not use monies
deposited in the qualified student's account for any of the following:

(a) Computer hardware
or other technological devices, except as otherwise allowed under paragraph 4,
subdivision (c) or (p) of this subsection.

(b) Transportation of the pupil, except for
transportation services described in paragraph 4, subdivision (o) of this
subsection.

C. In exchange for the parent's agreement pursuant
to subsection B of this section, the department shall transfer from the monies
that would otherwise be allocated to a recipient's prior school district, or if
the child is currently eligible to attend a preschool program for children with
disabilities, a kindergarten program or any of grades one through twelve, the
monies that the department determines would otherwise be allocated to a
recipient's expected school district of attendance, to the treasurer for
deposit into an Arizona empowerment scholarship account an amount that is
equivalent to ninety percent of the
sum of the base support level
and additional assistance prescribed in sections 15-185 and 15-943
for that particular student if that student were attending a charter school
amount that would be calculated for that student under the state
student funding formula prescribed in section 15-901.04, subsection A
.

D. The department of education empowerment
scholarship account fund is established consisting of monies appropriated by
the legislature. The department shall administer the
fund. Monies in the fund are subject to legislative
appropriation. Monies in the fund shall be used for the department's
costs in administering Arizona empowerment scholarship accounts under this
chapter. Monies in the fund are exempt from the provisions of
section 35-190 relating to lapsing of appropriations. If the
number of Arizona empowerment scholarship accounts significantly increases
after fiscal year 2020-2021, the department may request an increase in
the amount appropriated to the fund in any subsequent fiscal year in the budget
estimate submitted pursuant to section 35-113. The department
shall list monies in the fund as a separate line item in its budget estimate.

E. The state treasurer empowerment scholarship
account fund is established consisting of monies appropriated by the
legislature. The state treasurer shall administer the fund.� Monies
in the fund shall be used for the state treasurer's costs in administering the
Arizona empowerment scholarship accounts under this chapter. If the
number of Arizona empowerment scholarship accounts significantly increases
after fiscal year 2020-2021, the state treasurer may request an increase
in the amount appropriated to the fund in any subsequent fiscal year in the
budget estimate submitted pursuant to section 35-113. Monies
in the fund are subject to legislative appropriation.� Monies in the fund are
exempt from the provisions of section 35-190 relating to lapsing of
appropriations. The state treasurer shall list monies in the fund as
a separate line item in its budget estimate.

F. A parent must renew the qualified student's
Arizona empowerment scholarship account on an annual basis. The
department of education shall verify that the parent's child is a qualified
student as defined in section 15-2401 or 15-2401.01 in the year for
which the parent seeks to renew the Arizona empowerment scholarship account.� This
subsection does not require the department to annually verify the child's
disability for the purpose of section 15-2401, paragraph 7, subdivision (a),
item (i), (ii) or (iii), if applicable.

G. Notwithstanding any changes to the student's
multidisciplinary evaluation team plan, a student who has previously qualified
for an Arizona empowerment scholarship account remains eligible to apply for
renewal until the student finishes high school.

H. If a parent does not renew the qualified
student's Arizona empowerment scholarship account for a period of three
academic years, the department shall notify the parent that the qualified
student's account will be closed in sixty calendar days. The
notification must be sent
through

by
certified
mail, email and telephone, if applicable.� The parent has sixty calendar days
to renew the qualified student's Arizona empowerment scholarship
account. If the parent chooses not to renew or does not respond
in
within
sixty calendar days, the
department shall close the account and any remaining monies shall be returned
to
the
this
state.

I. A signed agreement under this section constitutes
school attendance required by section 15-802.

J. A qualified school or a provider of services
purchased pursuant to subsection B, paragraph 4 of this section may not share,
refund or rebate any Arizona empowerment scholarship account monies with the
parent or qualified student in any manner.

K. Notwithstanding subsection H of this section, on
the qualified student's graduation from a postsecondary institution or after
any period of four consecutive years after high school graduation in which the
student is not enrolled in an eligible postsecondary institution, but not
before this time as long as the account holder continues using a portion of
account monies for allowable expenses each year and is in good standing, the
qualified student's Arizona empowerment scholarship account shall be closed and
any remaining monies shall be returned to the state.

L. Monies received pursuant to this article do not
constitute taxable income to the parent of the qualified student.
END_STATUTE

Sec. 12. Section 41-1276, Arizona Revised
Statutes, is amended to read:

START_STATUTE
41-1276.

Truth in taxation levy for equalization assistance to school
districts

A. On or before February 15 of each year, the joint
legislative budget committee shall compute and transmit the truth in taxation
rates for equalization assistance for school districts for the following fiscal
year to:

1. The chairpersons of the house of representatives
ways and means committee and the senate finance committee, or their successor
committees.

2. The chairpersons of the appropriations committees
of the senate and the house of representatives, or their successor committees.

B. The truth in taxation rates consist of the
qualifying tax rate for a high school district or a common school district
within a high school district that does not offer instruction in high school
subjects pursuant to section 15-971, subsection B, paragraph 1 and a
qualifying tax rate for a unified district, a common school district not within
a high school district or a common school district within a high school
district that offers instruction in high school subjects pursuant to section 15-971,
subsection B, paragraph 2 that will offset the change in net assessed valuation
of property that was subject to tax in the prior year.

C. The joint legislative budget committee shall
compute the truth in taxation rates as follows:

1. Determine the statewide net assessed value for
the preceding tax year as provided in section 42-17151, subsection A,
paragraph 3.

2. Determine the statewide net assessed value for
the current tax year, excluding the net assessed value of property that was not
subject to tax in the preceding year.

3. Divide the amount determined in paragraph 1 of
this subsection by the amount determined in paragraph 2 of this subsection.

4. Adjust the qualifying tax rates for the current
fiscal year by the percentage determined in paragraph 3 of this subsection in
order to offset the change in net assessed value.

D. Except as provided in subsections E and G of this
section, the qualifying tax rate for a high school district or a common school
district within a high school district that does not offer instruction in high
school subjects and the qualifying tax rate for a unified school district, a
common school district not within a high school district or a common school
district within a high school district that offers instruction in high school
subjects for the following fiscal year shall be the rate determined by the
joint legislative budget committee pursuant to subsection C of this
section. The committee shall transmit the rates to the
superintendent of public instruction and the county boards of supervisors by
March 15 of each year.

E. If the legislature proposes qualifying tax rates
that exceed the truth in taxation rate:

1. The house of representatives ways and means
committee and the senate finance committee, or their successor committees,
shall hold a joint hearing on or before February 28 and publish a notice of a
truth in taxation hearing subject to the following requirements:

(a) The notice shall be published twice in a
newspaper of general circulation in this state that is published at the state
capital. The first publication shall be at least fourteen but not
more than twenty days before the date of the hearing.� The second publication
shall be at least seven but not more than ten days before the date of the
hearing.

(b) The notice shall be published in a location
other than the classified or legal advertising section of the newspaper.

(c) The notice shall be at least one-fourth
page in size and shall be surrounded by a solid black border at least one-eighth
inch in width.

(d) The notice shall be in the following form, with
the "truth in taxation hearing � notice of tax increase"
headline in at least eighteen-point type:

Truth in Taxation Hearing

Notice of Tax Increase

In compliance with section 41-1276,
Arizona Revised Statutes, the state legislature is notifying property taxpayers
in Arizona of the legislature's intention to raise the property tax levy over
last year's level.

The proposed tax increase will cause the taxes on a $100,000
home to be
$(total proposed taxes including the tax increase)
. Without
the proposed tax increase, the total taxes that would be owed on a $100,000
home would have been $_______.

All interested citizens are invited to attend a public
hearing on the tax increase that is scheduled to be held
(date and
time)
at
(location)
.

(e) For the purposes of computing the tax increase
on a

$100,000 home as required by
the notice, the joint meeting of the house of representatives ways and means
committee and the senate finance committee, or their successor committees,
shall consider the difference between the truth in taxation rate and the proposed
increased rate.

2. The joint meeting
of the house of representatives ways and means committee and the senate finance
committee, or their successor committees, shall consider any motion to
recommend the proposed tax rates to the full legislature by roll call vote.

F. In addition to publishing the truth in taxation
notice under subsection E, paragraph 1 of this section, the joint meeting of
the house of representatives ways and means committee and the senate finance
committee, or their successor committees, shall issue a press release
containing the truth in taxation notice.

G.
Notwithstanding any other law,

The legislature shall not adopt a state budget that provides for qualifying tax
rates pursuant to section 15-971 that exceed the truth in taxation rates
computed pursuant to subsection A of this section unless the rates are adopted
by a concurrent resolution approved by an affirmative roll call vote of two-thirds
of the members of each house of the legislature before the legislature enacts
the general appropriations bill. If the resolution is not approved
by two-thirds of the members of each house of the legislature, the rates
for the following fiscal year shall be the truth in taxation rates determined
pursuant to subsection C of this section and shall be transmitted to the
superintendent of public instruction and the county boards of supervisors.

H. Notwithstanding subsection C of this section and
if approved by the qualified electors voting at a statewide general election,
the legislature shall not set a qualifying tax rate that exceeds $2.1265 for a
common or high school district or $4.253 for a unified school district. The
legislature shall not set a county equalization assistance for education rate
that exceeds $0.5123.

I. Pursuant to subsection C of this section
:
,

1. For a school district that uses
the standard school finance formula,
the qualifying tax rate in tax year
2025
:

(
a
)
For
a high school district or a common school district within a high school
district that does not offer instruction in high school subjects as provided in
section 15-447 is $1.5606
.

and

(
b
)
For
a unified school district, a common school district not within a high school
district or a common school district within a high school district that offers
instruction in high school subjects as provided in section 15-447 is
$3.1212.

2. Notwithstanding subsection G of
this section, for a school district that elects pursuant to section 15-495
to use the state student funding formula prescribed in section 15-901.04,
the qualifying tax rate in tax year 2025:

(
a
) For a high
school district or a common school district within a high school district that
does not offer instruction in high school subjects as provided in section 15-447
is $_____.

(
b
) For a unified school district, a common school district
not within a high school district or a common school district within a high
school district that offers instruction in high school subjects as provided in
section 15-447 is $_____.

END_STATUTE

Sec. 13.
Emergency

This act is an emergency measure that
is necessary to preserve the public peace, health or safety and is operative
immediately as provided by law.