Reference Title: omnibus budget reconciliation; education.

AN ACT
REPEALING SECTIONS 15-186 AND 15-782.01, ARIZONA REVISED STATUTES; AMENDING SECTION 15-901, ARIZONA REVISED STATUTES, AS AMENDED BY LAWS 1997, FIRST SPECIAL SESSION, CHAPTER 4, SECTION 5; AMENDING SECTIONS 15-921, 15-942, 15-943 AND 15-945, ARIZONA REVISED STATUTES; AMENDING TITLE 15, CHAPTER 10, ARIZONA REVISED STATUTES, BY ADDING ARTICLE 11; REPEALING LAWS 1994, NINTH SPECIAL SESSION, CHAPTER 2, SECTION 30; REPEALING LAWS 1998, THIRD SPECIAL SESSION, CHAPTER 1, SECTION 84; RELATING TO STATE EDUCATION OMNIBUS BUDGET RECONCILIATION.

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

Section 1. Repeal

Sections 15-186 and 15-782.01 , Arizona Revised Statutes, are repealed.

Sec. 2. Section 15-901, Arizona Revised Statutes, as amended by Laws 1997, first special session, chapter 4, section 5, is amended to read:

15-901 . Definitions

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

1. "Average daily attendance" or "ADA" means actual average daily attendance through the first one hundred days in session.

2. "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 in session for the current year. Withdrawals include students formally withdrawn from schools and students absent for ten consecutive school days, except for excused absences as identified by the department of education. For computation purposes, the effective date of withdrawal shall be retroactive to the last day of actual attendance of the student.

(a) "Fractional student" means:

(i) For common schools, a preschool child who is at least three years of age and enrolled in a program for preschool children with disabilities of at least three hundred sixty minutes each week or a kindergarten student at least five years of age prior to January 1 of the school year and enrolled in a school kindergarten program that meets at least three hundred forty-six instructional hours during the minimum number of days required in a school year as provided in section 15-341. Lunch periods and recess periods may not be included as part of the instructional hours unless the child's individualized education program requires instruction during those periods and the specific reasons for such instruction are fully documented. 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.

(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 in a recognized high school and who is taught in less than twenty instructional hours per week prorated for any week with fewer than five school days. A part-time high 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 a full-time instructional program as defined in subdivision (c) of this paragraph.

(b) "Full-time student" means:

(i) For common schools, a student who is at least six years of age prior to 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, ungraded students at least six, but under nine, years of age by September 1 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 six hundred ninety-two hours during the minimum number of days required in a school year as provided in section 15-341. Fourth, fifth and sixth grade students or ungraded students at least nine, but under twelve, years of age by September 1 must be enrolled in an instructional program that meets for a total of at least eight hundred sixty-five hours during the minimum number of school days required in a school year as provided in section 15-341. Seventh and eighth grade students or ungraded students at least twelve, but under fourteen, years of age by September 1 must be enrolled in an instructional program that meets for a total of at least one thousand thirty-eight hours during the minimum number of days required in a school year as provided in section 15-341. Lunch periods and recess periods may not be included as part of the instructional hours unless the student is a child with a disability and the child's individualized education program requires instruction during those periods and the specific reasons for such instruction are fully documented.

(ii) For high schools, a student not graduated from the highest grade taught in the school district, or an ungraded student at least fourteen years of age by September 1, and enrolled in at least a full-time instructional program of subjects that count toward graduation as defined by the state board of education in a recognized high school. A full-time student shall not be counted more than once for computation of average daily membership.

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

(c) "Full-time instructional program" means at least 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 hours a year, or the equivalent, or one or more subjects taught in amounts of time totalling at least twenty hours per week prorated for any week with fewer than five school days.

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

4. "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 grades one through eight.

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

6. "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, and 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 forty-six hours but is less than six hundred ninety-two 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.

(ii) Of the first, second or third grades, ungraded and at least six, but under nine, years of age by September 1 or ungraded group B children with disabilities and at least five, but under six, years of age by September 1 attends more than three-quarters of the instructional time scheduled for the day.

(iii) Of the fourth, fifth or sixth grades or ungraded and at least nine, but under twelve, years of age by September 1 attends more than three-quarters of the instructional time scheduled for the day, except as provided in section 15-797.

(iv) Of the seventh or eighth grades or ungraded and at least twelve, but under fourteen, years of age by September 1 attends more than three-quarters of the instructional time scheduled for the day, except as provided in section 15-797.

(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.

(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.

(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 not including lunch periods and recess periods, except as provided in paragraph 2, subdivision (a), item (i) of this subsection for children with disabilities up to a maximum of three hundred sixty minutes each week.

(d) For high schools or ungraded schools in which the pupil is at least fourteen years of age by September 1, 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 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.

(e) For high schools or ungraded schools in which the pupil is at least fourteen years of age by September 1, 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.

(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.

(g) For school districts which 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 seventy-five days' equivalency of instructional time as approved by the superintendent of public instruction during which each pupil is enrolled.

7. "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 his 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 his 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.

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

9. "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 1785) 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 1785) 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.

10. "Enrolled" or "enrollment" means when a pupil is currently registered in the school district.

11. "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.

12. "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 which is allocated to teaching high school subjects with permission of the state board of education.

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

14. "Student count" means average daily membership as prescribed in this subsection for the fiscal year prior to 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. "Total bus mileage" means the total number of miles driven by all buses of a school district during the school year.

16. "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.

17. "Unified school district" means a political subdivision of the 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:

(a) For fiscal year 1997-1998 1998-1999 , two thousand four FIVE hundred ninety-nine THIRTY-TWO dollars fifty-three SIXTY cents.

(b) For fiscal year 1998-1999 1999-2000 and each subsequent fiscal year, the base level for the prior year adjusted by any growth rate prescribed by law, subject to appropriation.

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 school children 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. "ED, MIMR, SLD, SLI and OHI" means programs for children with emotional disabilities, mild mental retardation, a specific learning disability, a speech/language impairment and other health impairments.

7. "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.

8. "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.

9. "Group A" means educational programs for career exploration, a specific learning disability, an emotional disability, mild mental retardation, remedial education, a speech/language impairment, homebound, bilingual, preschool moderate delay, preschool speech/language delay, other health impairments and gifted pupils.

10. "Group B" means educational improvements for pupils in kindergarten programs and grades one through three, educational programs for autism, a hearing impairment, moderate mental retardation, multiple disabilities, multiple disabilities with severe sensory impairment, orthopedic impairments, preschool severe delay, severe mental retardation 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 and vocational and technological education pupils enrolled in grades nine through twelve in approved programs as prescribed in section 15-782.01 and limited English proficient pupils enrolled in a program to promote English language proficiency pursuant to section 15-754.

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

12. "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.

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

14. "LEP" means limited English proficient pupils who are enrolled in a program to promote English language proficiency pursuant to section 15-754.

15. "MD-R, A-R and SMR-R" means resource programs for pupils with multiple disabilities, autism and severe mental retardation.

16. "MD-SC, A-SC and SMR-SC" means self-contained programs for pupils with multiple disabilities, autism and severe mental retardation.

17. "MDSSI" means a program for pupils with multiple disabilities with severe sensory impairment.

18. "MOMR" means programs for pupils with moderate mental retardation.

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

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

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

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

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

24. "Small isolated school district" means a school district which 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 which 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 which 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.

25. "Small school district" means a school district which 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 which is fewer than thirty miles by the most reasonable route from another school which 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.

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

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

28. "VI" means programs for pupils with visual impairments.

29. "Voc. Ed." means vocational and technological education programs, as defined in section 15-781, except that for the purpose of computing the district support level as provided in this title vocational and technological education programs only include approved vocational and technological programs for students in grades nine through twelve as prescribed in section 15-782.01.

Sec. 3. Section 15-921, Arizona Revised Statutes, is amended to read:

15-921 . Duties of superintendent of public instruction

A. The superintendent of public instruction shall supervise the provision of pupil transportation services.

B. The superintendent of public instruction shall evaluate the transportation program and routes for the purpose of evaluating accurate transportation support levels for the budget year.

C. For each fiscal year the superintendent of public instruction shall, on or before May 15, inform each school district of the daily route mileage which will be used in the determination of the school district's transportation support level for the budget year. The information provided to each school district shall indicate the daily route mileage for the current year and the prior two years with a notation of the greatest amount, which shall be used in the determination of the school district's transportation support level for the budget year.

D. The superintendent of public instruction shall be responsible for assembling the information provided by the school district and for determining the accuracy of such information.

Sec. 4. Section 15-942, Arizona Revised Statutes, is amended to read:

15-942 . Adjustment for rapid decline in student count

A. If the student count in grades kindergarten through eight or grades nine through twelve for the budget year is less than the student count in grades kindergarten through eight or grades nine through twelve for the current year or the adjusted student count in grades kindergarten through eight or grades nine through twelve for the current year determined as provided in this section by:

1. At least five per cent but less than nine per cent, a school district may use the student count in grades kindergarten through eight or grades nine through twelve for the current year or the adjusted student count in grades kindergarten through eight or grades nine through twelve for the current year determined as provided in this section multiplied by 0.95 in computing the budget for the budget year and entitlement to state aid.

2. At least nine per cent but less than thirteen per cent, a school district may use the student count in grades kindergarten through eight or grades nine through twelve for the current year or the adjusted student count in grades kindergarten through eight or grades nine through twelve for the current year determined as provided in this section multiplied by 0.93 in computing the budget for the budget year and entitlement to state aid.

3. At least thirteen per cent but less than twenty per cent, a school district may use the student count in grades kindergarten through eight or grades nine through twelve for the current year or the adjusted student count in grades kindergarten through eight or grades nine through twelve for the current year determined as provided in this section multiplied by 0.90 in computing the budget for the budget year and entitlement to state aid.

4. At least twenty per cent but less than thirty per cent, a school district may use the student count in grades kindergarten through eight or grades nine through twelve for the current year or the adjusted student count in grades kindergarten through eight or grades nine through twelve for the current year determined as provided in this section multiplied by 0.87 in computing the budget for the budget year and entitlement to state aid.

5. Thirty per cent or more, a school district may use the student count in grades kindergarten through eight or grades nine through twelve for the current year or the adjusted student count in grades kindergarten through eight or grades nine through twelve for the current year determined as provided in this section multiplied by 0.85 in computing the budget for the budget year and entitlement to state aid.

B. The governing board of a school district utilizing the adjusted student count as provided in this section shall include notification of the actual per cent decline in student count and the additional allowable revenues by computing the base revenue control limit by utilization of the adjustment for rapid decline in student count in the proposed budget presented at the public meeting as provided in section 15-905.

C. When determining its student count or adjusted student count for the current year, the governing board of a school district utilizing the adjusted student count as provided in this section shall not include:

1. Pupils who are residents of the attendance area of another school district as a result of a school district consolidation, subdivision or other boundary change.

2. Pupils whose district of attendance has not changed but who are being included in the student count of a different school district for the budget year as a result of a change in an agreement regarding which district will include the pupils in its student count.

D. The provisions of this section shall not apply to any reduction in student count resulting from enrollment in a joint technological education district formed pursuant to chapter 3, article 6 of this title.

E. THIS SECTION DOES NOT APPLY TO ANY REDUCTION IN STUDENT COUNT RESULTING FROM A DISTRICT SPONSORED CHARTER SCHOOL SWITCHING SPONSORS OR CEASING TO OPERATE.

Sec. 5. Section 15-943, Arizona Revised Statutes, is amended to read:

15-943 . Base support level

The base support level for each school district shall be computed as follows:

1. The following support level weights shall be used in paragraph 2, subdivision (a) for the following school districts:

(a) For school districts whose student count in kindergarten programs and grades one through eight is classified in column 1 of this subdivision, the support level weight for kindergarten programs and grades one through eight is the corresponding support level weight prescribed in column 2 or 3 of this subdivision, whichever is appropriate:

Column 1 Student Count	Column 2 Support Level Weight For Small Isolated School Districts	Column 3 Support Level Weight For Small School Districts
1-99	1.559	1.399
100-499	1.358 + 0.0005 x (500 - student count)	1.278 + 0.0003 x (500 - student count)
500-599	1.158 + 0.002 x (600 - student count)	1.158 + 0.0012 x (600 - student count)

(b) For school districts whose student count in grades nine through twelve is classified in column 1 of this subdivision, the support level weight for grades nine through twelve is the corresponding support level weight prescribed in column 2 or 3 of this subdivision, whichever is appropriate:

Column 1 Student Count	Column 2 Support Level Weight For Small Isolated School Districts	Column 3 Support Level Weight For Small School Districts
1-99	1.669	1.559
100-499	1.468 + 0.0005 x (500 - student count)	1.398 + 0.0004 x (500 - student count)
500-599	1.268 + 0.002 x (600 - student count)	1.268 + 0.0013 x (600 - student count)

2. Subject to paragraph 1, determine the weighted student count as follows:

(a)

Grade	Base		Group A		Support Level Weight		Student Count		Weighted Student Count
PSD	1.000	+	0.450	=	1.450	x		=
K-8	1.000	+	0.158	=	1.158	x		=
9-12	1.163	+	0.105	=	1.268	x		=
							Subtotal	A

(b)

Funding : Category	Support Level Weight	Student Count		Weighted Student Count
Voc. Ed.	0.071 x		=
HI	3.169 3.341 x		=
K-3	0.040 x		=
LEP	0.060 x		=
MD-R, A-R and
SMR-R	1.995 x		=
MD-SC, A-SC and
SMR-SC	3.550 5.015 x		=
MD-SSI	4.923 6.025 x		=
OI-R	1.744 x		=
OI-SC	3.951 5.641 x		=
P-SD	3.398 4.979 x		=
ED, MIMR, SLD,
SLI and OHI	0.003 x		=
ED-P	2.633 x		=
MOMR	2.808 x		=
VI	4.315 4.832 x		=
		Subtotal	B

(c) Total of subtotals A and B: _____________

3. Multiply the total determined in paragraph 2 by the base level.

4. Multiply the teacher experience index of the district or 1.00, whichever is greater, by the product obtained in paragraph 3.

Sec. 6. Section 15-945, Arizona Revised Statutes, is amended to read:

15-945 . Transportation support level

A. The support level for to and from school for each school district for the current year shall be computed as follows:

1. Determine the greatest approved daily route mileage of the school district for the three fiscal years YEAR prior to the current year not including any fiscal year prior to fiscal year 1983-1984 .

2. Multiply the figure obtained in paragraph 1 of this subsection by one hundred seventy-five.

3. Determine the number of eligible students transported in the fiscal year with the greatest approved daily route mileage determined as provided in paragraph 1 of this subsection PRIOR TO THE CURRENT YEAR .

4. Divide the amount determined in paragraph 1 of this subsection by the amount determined in paragraph 3 of this subsection to determine the approved daily route mileage per eligible student transported.

5. Determine the classification in column 1 of this paragraph for the quotient determined in paragraph 4 of this subsection. Multiply the product obtained in paragraph 2 of this subsection by the corresponding state support level for each route mile as provided in column 2 of this paragraph.

Column 1 Approved Daily Route Mileage per Eligible Student Transported	Column 2 State Support Level per Route Mile for Fiscal Year 1984-1985
0.5 or less	$1.55
More than 0.5 through
1.0	$1.25
More than 1.0	$1.55

6. Add the amount spent during the prior fiscal year for bus tokens and bus passes for students who qualify as eligible students as defined in section 15-901.

B. The support level for academic and vocational and technological education and athletic trips for each school district for the current year is computed as follows:

1. Determine the classification in column 1 of paragraph 2 of this subsection for the quotient determined in subsection A, paragraph 4 of this section.

2. Multiply the product obtained in subsection A, paragraph 5 of this section by the corresponding state support level for academic and vocational and technological education and athletic trips as provided in column 2, 3 or 4 of this paragraph, whichever is appropriate for the type of district.

Column 1 Approved Daily Route Mileage per Eligible Student Transported	Column 2 District Type 02 or 03	Column 3 District Type 04	Column 4 District Type 05
0.5 or less More than 0.5 through 1.0	0.15 0.15	0.10 0.10	0.25 0.25
More than 1.0	0.18	0.12	0.30

For the purposes of this paragraph, "district type 02" means a unified school district or an accommodation school that offers instruction in grades nine through twelve, "district type 03" means a common school district not within a high school district, "district type 04" means a common school district within a high school district or an accommodation school that does not offer instruction in grades nine through twelve and "district type 05" means a high school district.

C. The support level for extended school year programs for handicapped pupils is computed as follows:

1. Determine the sum of the following:

(a) The total number of miles driven by all buses of a school district while transporting eligible handicapped students on scheduled routes from their residence to the school of attendance and from the school of attendance to their residence on routes for an extended school year program in accordance with section 15-881.

(b) The total number of miles driven 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 handicapped student from the place of his residence to a school transportation pickup point or to the school facility of attendance and from the school transportation scheduled return point or from the school facility to his residence for an extended school year program in accordance with section 15-881.

2. Multiply the sum determined in paragraph 1 of this subsection by the state support level for the district determined as provided in subsection A, paragraph 5 of this section.

D. The transportation support level for each school district for the current year is the sum of the support level for to and from school as determined in subsection A of this section and the support level for academic and vocational and technological education and athletic trips as determined in subsection B of this section and the support level for extended school year programs for handicapped pupils as determined in subsection C of this section.

E. Beginning with fiscal year 1985-1986 The state support level for each approved route mile, as provided in subsection A, paragraph 5 of this section, shall be adjusted by the growth rate prescribed by law, subject to appropriation.

Sec. 7. Title 15, chapter 10, Arizona Revised Statutes, is amended by adding article 11, to read:

article 11. State block grant for early childhood education program

15-1251 . State block grant for early childhood education; evaluation

A. THE STATE BLOCK GRANT FOR EARLY CHILDHOOD EDUCATION PROGRAM IS ESTABLISHED IN THE STATE BOARD OF EDUCATION. THE PURPOSE OF THE PROGRAM IS TO PROMOTE IMPROVED PUPIL ACHIEVEMENT BY PROVIDING FLEXIBLE SUPPLEMENTAL FUNDING FOR EARLY CHILDHOOD PROGRAMS, INCLUDING PRESCHOOL PROGRAMS FOR ECONOMICALLY DISADVANTAGED CHILDREN, AND PROGRAMS THAT SERVE ALL PUBLIC SCHOOL PUPILS STATEWIDE WHO ARE IN KINDERGARTEN PROGRAMS AND GRADES ONE, TWO AND THREE.

B. FUNDING FOR THE PROGRAM FOR EACH FISCAL YEAR SHALL BE ALLOCATED BASED ON THE NUMBER OF PUPILS IN KINDERGARTEN PROGRAMS AND GRADES ONE, TWO AND THREE IN EACH CHARTER SCHOOL OR SCHOOL DISTRICT WHO WERE ELIGIBLE FOR FREE LUNCHES DURING THE PRIOR FISCAL YEAR UNDER THE NATIONAL SCHOOL LUNCH AND CHILD NUTRITION ACTS (42 UNITED STATES CODE SECTIONS 1751 THROUGH 1785). ANY CHARTER SCHOOL OR SCHOOL DISTRICT THAT DID NOT DETERMINE FOR THE PRIOR FISCAL YEAR IF ITS PUPILS IN KINDERGARTEN PROGRAMS AND GRADES ONE, TWO AND THREE WERE ELIGIBLE FOR FREE LUNCHES UNDER THE NATIONAL SCHOOL LUNCH AND CHILD NUTRITION ACTS SHALL RECEIVE FUNDING FOR THE PROGRAM IN THE CURRENT FISCAL YEAR BASED ON THE NUMBER OF ITS PUPILS IN KINDERGARTEN PROGRAMS AND GRADES ONE, TWO AND THREE WHO WOULD HAVE BEEN ELIGIBLE FOR FREE LUNCHES IN THE PRIOR FISCAL YEAR ACCORDING TO THE STATEWIDE KINDERGARTEN PROGRAMS AND GRADES ONE, TWO AND THREE ELIGIBILITY AVERAGE FOR ALL SCHOOL DISTRICTS AND CHARTER SCHOOLS COLLECTIVELY FOR THE PRIOR FISCAL YEAR. NOTWITHSTANDING THIS SECTION, A SCHOOL DISTRICT OR CHARTER SCHOOL WITH AN AVERAGE DAILY MEMBERSHIP OF MORE THAN SIX HUNDRED PUPILS IN KINDERGARTEN PROGRAMS AND GRADES ONE, TWO AND THREE IN THE PRIOR FISCAL YEAR SHALL HAVE PARTICIPATED IN THE NATIONAL SCHOOL LUNCH AND CHILD NUTRITION ACTS FREE LUNCHES PROGRAM IN THE PRIOR FISCAL YEAR TO BE ELIGIBLE FOR PROGRAM FUNDING IN THE CURRENT FISCAL YEAR.

C. A SCHOOL DISTRICT OR CHARTER SCHOOL THAT DEVOTES PART OR ALL OF ITS PROGRAM FUNDING TO PRESCHOOL PROGRAMS SHALL COMPLY WITH ALL OF THE FOLLOWING REQUIREMENTS:

1. RESTRICT THE PRESCHOOL PROGRAM ONLY TO PRESCHOOL CHILDREN ELIGIBLE FOR FREE OR REDUCED PRICE LUNCHES UNDER THE NATIONAL SCHOOL LUNCH AND CHILD NUTRITION ACTS.

2. ALLOW PARTICIPATING PUPILS TO RECEIVE PRESCHOOL SERVICES ONLY FROM A PUBLIC, FEDERALLY FUNDED OR PRIVATE CHILD CARE PROVIDER, EACH OF WHICH SHALL BE LICENSED BY THE DEPARTMENT OF HEALTH SERVICES AND EACH OF WHICH, BEGINNING IN FISCAL YEAR 1999-2000, ALSO SHALL BE ACCREDITED BY A STATE BOARD OF EDUCATION APPROVED ORGANIZATION THAT PROVIDES ACCREDITATION FOR PRESCHOOL PROGRAMS.

3. PROVIDE ALL FEDERALLY FUNDED OR PRIVATE CHILD CARE PROVIDERS LOCATED WITHIN THE SCHOOL DISTRICT OR WITHIN TEN MILES OF THE CHARTER SCHOOL WITH INFORMATION NECESSARY FOR THEM TO PARTICIPATE IN THE PROGRAM, INCLUDING NAMES AND ADDRESSES OF CHILDREN SELECTED FOR PARTICIPATION AND OF THEIR PARENTS OR GUARDIANS.

4. PROVIDE ALL PARENTS OR GUARDIANS OF CHILDREN SELECTED FOR THE PROGRAM WITH A LIST OF LICENSED FEDERALLY FUNDED OR PRIVATE CHILD CARE PROVIDERS LOCATED WITHIN THE SCHOOL DISTRICT OR WITHIN TEN MILES OF THE CHARTER SCHOOL AND EXPLAIN TO PARENTS OR GUARDIANS THAT THEY MAY CHOOSE TO HAVE THEIR CHILD RECEIVE SERVICES UNDER THE PROGRAM FROM ANY PROVIDER ON THE LIST IF THAT PROVIDER AGREES TO PARTICIPATE.

5. ALLOW AT LEAST FIFTY PER CENT OF PUPILS SELECTED FOR THE PROGRAM TO RECEIVE PRESCHOOL SERVICES FROM A FEDERALLY FUNDED OR PRIVATE CHILD CARE PROVIDER OF THEIR PARENT'S OR GUARDIAN'S OWN CHOOSING.

6. ALLOW ANY ELIGIBLE CHILD CARE PROVIDER LOCATED WITHIN THE SCHOOL DISTRICT OR WITHIN TEN MILES OF THE CHARTER SCHOOL TO PARTICIPATE IN THE PROGRAM IF IT IS WILLING TO PROVIDE SERVICES AT A UNIT COST SIMILAR TO THAT PAID TO OTHER PROVIDERS IN THE AREA UNDER THE PROGRAM.

7. LIMIT THE USE OF CONTRACTS WITH FEDERALLY FUNDED AND PRIVATE CHILD CARE PROVIDERS TO FINANCIAL AGREEMENTS PERTAINING TO NUMBERS OF CHILDREN TO BE SERVED, HOURS OF SERVICE TO BE PROVIDED PER CHILD, PAYMENT RATES AND OTHER FINANCIAL ASPECTS OF THE PROGRAM.

8. LIMIT TO FIVE PER CENT THE AMOUNT OF BLOCK GRANT MONIES THAT MAY BE USED LOCALLY FOR PROGRAM ADMINISTRATION.

9. PAY PARTICIPATING FEDERALLY FUNDED AND PRIVATE CHILD CARE PROVIDERS IN A TIMELY MANNER.

D. THE AUDITOR GENERAL SHALL CONDUCT A PROGRAMMATIC EVALUATION OF THE STATE BLOCK GRANT FOR EARLY CHILDHOOD EDUCATION PROGRAM EVERY THREE YEARS.

Sec. 8. Repeal

Laws 1994, ninth special session, chapter 2, section 30 is repealed.

Sec. 9. Repeal

Laws 1998, third special session, chapter 1, section 84, is repealed.

Sec. 10. State block grant for vocational education; purpose and allocation plan

Monies appropriated for the state block grant for vocational education program for fiscal year 1998-1999 shall be allocated ninety per cent based on vocational education student counts from fiscal year 1997-1998 and ten per cent based on placement data for vocational education program completers from fiscal year 1995-1996. Vocational education student counts shall consist of the number of eleventh and twelfth grade students enrolled in an approved vocational education program, with the counts being adjusted to reflect the relative demand for employees in labor market sectors addressed by each vocational education program area represented in the student count data. Vocational education placement data shall consist of the number of students who completed a level III course in an approved vocational education program, graduated from high school, and were working in a civilian or military job requiring the occupational skills taught in the approved program or were enrolled in a postsecondary education program directly related to the occupational skills taught in the approved program when the program completer follow-up survey for their colleagues was conducted. It is the intent of the legislature that the per cent of vocational education block grant funding allocated based on placement data be increased to at least twenty per cent in future fiscal years as methods improve for collecting placement data.

Sec. 11. Norm-referenced testing; grade levels to be tested

Notwithstanding section 15-741, subsection A, paragraph 3, Arizona Revised Statutes, for fiscal year 1998-1999 the state board of education shall adopt and implement a statewide nationally standardized norm-referenced achievement test for pupils in grades two through eleven in reading, language arts and mathematics.

Sec. 12. Charter schools; transportation state aid; 1998-1999 fiscal year

Notwithstanding sections 15-185 and 15-816.01, Arizona Revised Statutes, the transportation support level for the 1998-1999 fiscal year for each charter school that is sponsored by the state board of education or the state board for charter schools is one hundred seventy-four dollars multiplied by the school's student count.

Sec. 13. Capital outlay transfer limit adjustment; fiscal year 1998-1999

Notwithstanding section 15-905, subsection R, paragraph 5, Arizona Revised Statutes, for fiscal year 1998-1999 the amount determined in section 15-905, subsection R, paragraph 5, Arizona Revised Statutes, shall be zero.

Sec. 14. Accountability measures; formula; base level increases

A. The state board of education shall administer the standardized norm-referenced achievement test two times during academic year 1998-1999 to the random statewide representative sample of pupils selected by the technical advisory committee established pursuant to section 15 of this act. Beginning in academic year 1999-2000 or once the statewide criterion-referenced test is deemed to be a valid and reliable test as determined by the state board of education, the criterion-referenced test shall replace the standardized norm-referenced achievement test for the purposes of this section. The state board of education is responsible for tabulating and scoring the results of the tests administered pursuant to this subsection. The state board may contract with a public or private entity to carry out the state board's responsibilities pursuant to this subsection.

B. The state board of education shall administer a parent quality survey two times each academic year to the random statewide representative sample of parents selected by the technical advisory committee established pursuant to section 15 of this act. The state board of education is responsible for tabulating and scoring the results of the parent quality survey administered pursuant to this subsection. The state board may contract with a public or private entity to carry out the state board's responsibilities pursuant to this subsection. The parent quality survey shall consist of the following question:

"Students are given the grades A+, A, B, C, D and Fail to denote the quality of their work. Using the same A+, A, B, C, D and Fail scale, what grade would you give the school that your oldest child attends?"

C. Each school district or charter school in this state is eligible to revise its budget, prior to May 15, by increasing the base level by a percentage equal to the composite score. The department of education shall calculate the composite score as follows:

1. Determine the percentage of pupils in the representative sample who achieve an "excellent" performance standard on a composite of the mathematics, reading and language portions of the standardized norm-referenced achievement test. For the purposes of this paragaph, the "excellent" performance standard is defined as the "advanced" performance standard on the standardized norm-referenced achievement test.

2. Multiply the percentage in paragraph 1 by 200.

3. Multiply the product in paragraph 2 by 0.000114.

4. Determine the percentage of parents in the representative sample who give their children's school an excellence rating as reflected by an "A+" grade in the parent quality survey.

5. Divide the percentage in paragraph 4 by 0.02.

6. Multiply the quotient in paragraph 5 by 0.000207.

7. Add the products determined in paragraphs 3 and 6.

D. Each school district or charter school may revise its budget after the first test and survey sample, but prior to May 15, based on the increase in the base level using the percentage increase provided by the department of education. After the second test and survey sample, but prior to May 15, each school district or charter school may provide a final revision of its budget based on the increase in the base level using the percentage increase provided by the department of education. For academic year 1998-1999, the composite score is 0.00197 or the composite score derived pursuant to subsection C of this section, whichever is higher.

E. A school district or charter school that receives monies pursuant to subsection C shall provide any information requested by the state board of education and the technical advisory committee in connection with the program and shall assist with sampling procedures as requested.

F. Based on the requirements established by this act and the recommendations of the technical advisory committee, the state board of education shall prescribe specific procedures and requirements as needed to carry out the purposes of this section.

Sec. 15. Technical advisory committee

A. The technical advisory committee is established within the department of education, consisting of ten members appointed by the governor. Each member of the technical advisory committee shall have technical expertise in pupil testing, statistics or school finance. Members of the technical advisory committee serve at the pleasure of the governor.

B. The technical advisory committee shall:

1. Establish the methodology of the testing procedures pursuant to section 14 of this act, including the selection of dates for the administration of the tests.

2. Select a statewide representative sample of pupils who will be tested for the purposes of section 14 of this act. The committee shall utilize a sampling methodology with a margin of error that does not exceed one percentage point.

3. Select a statewide representative sample of parents of pupils who will participate in the parent quality survey pursuant to section 14 of this act and select the dates for the administration of the parent quality survey.

4. Assist the state board of education in the administration of the standardized norm-referenced achievement test that will be used in conjunction pursuant to section 14 of this act.

C. The auditor general shall review the findings of the technical advisory committee and shall submit an annual report of the conclusions to the state board of education, the governor, the speaker of the house of representatives and the president of the senate by November 15.

APPROVED BY THE GOVERNOR MAY 26, 1998.

FILED IN THE OFFICE OF THE SECRETARY OF STATE MAY 27, 1998.