Reference Title: charter schools; base level; transportation

AN ACT
AMENDING SECTIONS 15-185, 15-901, 15-923, 15-945, 15-961 AND 15-962, ARIZONA REVISED STATUTES; RELATING TO CHARTER SCHOOLS AND PUPIL TRANSPORTATION.

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

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

15-185 . Charter schools; financing; definition

A. Financial provisions for a charter school that is sponsored by a school district governing board are as follows:

1. Until June 30, 1999, the charter school shall be included in the district's budget and financial assistance calculations pursuant to section 15-185.01, subsection B and chapter 9 of this title. From and after June 30, 1999, the charter school shall be included in the district's budget and financial assistance calculations pursuant to paragraph 3 of this subsection and chapter 9 of this title, except for chapter 9, article 4 of this title. The charter of the charter school shall include a description of the methods of funding the charter school by the school district. The school district shall send a copy of the charter and charter school application, including a description of how the school district plans to fund the school, to the state board of education before the start of the first fiscal year of operation of the charter school. The charter or application shall include an estimate of the student count for the charter school for its first fiscal year of operation. This estimate shall be computed pursuant to the requirements of paragraph 3 of this subsection.

2. A school district is not financially responsible for any charter school that is sponsored by the state board of education or the state board for charter schools.

3. A school district that sponsors a charter school may:

(a) Increase its student count as provided in subsection B, paragraph 2 of this section during the first year of the charter school's operation to include those charter school pupils who were not previously enrolled in the school district. From and after June 30, 1999, a charter school sponsored by a school district governing board is eligible for the assistance prescribed in subsection B, paragraph 5 of this section if at least ninety per cent of the pupils enrolled in the charter school were not enrolled in the school district in the year before the first year of enrollment in the charter school. The soft capital allocation as provided in section 15-962 for the school district sponsoring the charter school shall be increased by the amount of the additional assistance. The school district shall include the full amount of the additional assistance in the funding provided to the charter school.

(b) Until June 30, 1999, increase its transportation support level as provided in subsection B, paragraph 3 of this section to include the increases caused by the transportation of eligible pupils enrolled in the charter school.

4. If a school district uses the provisions of paragraph 3 of this subsection, the school district is not eligible to include those pupils in its student count for the purposes of computing an increase in its revenue control limit and district support level as provided in section 15-948.

5. A school district that sponsors a charter school is not eligible to include the charter school pupils in its student count for the purpose of computing an increase in its capital outlay revenue limit as provided in section 15-961, subsection C, except that if the charter school was previously a school in the district, the district may include in its student count any charter school pupils who were enrolled in the school district in the prior year.

6. A school district that sponsors a charter school is not eligible to include the charter school pupils in its student count for the purpose of computing the revenue control limit which is used to determine the maximum budget increase as provided in chapter 4, article 4 of this title unless the charter school is located within the boundaries of the school district.

A. THE PORTION OF A SCHOOL DISTRICT'S BUDGET THAT IS ATTRIBUTABLE TO A CHARTER SCHOOL THAT IS SPONSORED BY THE SCHOOL DISTRICT GOVERNING BOARD SHALL BE COMPUTED SEPARATELY PURSUANT TO SUBSECTION B OF THIS SECTION AS IF THE CHARTER SCHOOL'S STUDENT COUNT WERE SEPARATE FROM THAT OF THE SCHOOL DISTRICT.

B. Financial provisions for a charter school that is sponsored by the state board of education or the state board for charter schools are as follows:

1. The charter school shall calculate a base support level as prescribed in section 15-943, and until June 30, 1999, a transportation support level as prescribed in section 15-945 and paragraph 3 of this subsection, a capital outlay revenue limit as prescribed in section 15-961 and a capital levy revenue limit as prescribed in section 15-962, except that sections 15-941 and 15-942 do not apply to these charter schools.

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. After the first 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, or the adjusted average daily membership, as prescribed in section 15-902, of the charter school. Before the one hundredth day or two hundredth day in session, as applicable, the state board of education or the state board for charter schools SPONSOR 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 until June 30, 1999, transportation support level and capital outlay revenue limit, and from and after June 30, 1999, 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. Until June 30, 1999, notwithstanding paragraph 1 of this subsection, the transportation support level shall be determined using an estimated transportation support level as prescribed in section 15-945 before the beginning of the school year. After the first one hundred days or two hundred days in session, as applicable, the charter school shall revise the transportation support level to be equal to the actual transportation support level of the charter school. Before the one hundredth day or two hundredth day in session, as applicable, the state board of education or the state board for charter schools SPONSOR may require a charter school to report periodically regarding the daily route mileage and the number of eligible students transported. A charter school that overestimated its transportation support level shall revise its budget before May 15. A charter school that underestimated its transportation support level may revise its budget before May 15.

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

5. Equalization assistance for the charter school shall be determined by adding the amount of the base support level, and until June 30, 1999, the transportation support level, the capital levy revenue limit and the capital outlay revenue limit as calculated pursuant to this section, and additional capital assistance calculated pursuant to section 15-185.01, subsection A. From and after June 30, 1999, the amount of the additional assistance is one thousand two hundred four dollars sixty-seven cents per student count in kindergarten programs and grades one through eight and one thousand four hundred four dollars one cent per student count in grades nine through twelve.

6. The state board of education shall apportion state aid from the appropriations made for such purposes to the state treasurer for disbursement to the counties for the charter school in each county OR FOR DISBURSEMENT TO THE SCHOOL DISTRICTS FOR THE CHARTER SCHOOL IN EACH SCHOOL DISTRICT in an amount as determined by this paragraph. The apportionments shall be as follows:

(a) During the first year of operation:

(I) On July 1, one-third of the total amount to be apportioned during the fiscal year.

(ii) On October 15, one-twelfth of the total amount to be apportioned during the fiscal year.

(iii) On December 15, one-twelfth of the total amount to be apportioned during the fiscal year.

(iv) On January 15, one-twelfth of the total amount to be apportioned during the fiscal year.

(v) On February 15, one-twelfth of the total amount to be apportioned during the fiscal year.

(vi) On March 15, one-twelfth of the total amount to be apportioned during the fiscal year.

(vii) On April 15, one-twelfth of the total amount to be apportioned during the fiscal year.

(viii) On May 15, one-twelfth of the total amount to be apportioned during the fiscal year.

(ix) On June 15, one-twelfth of the total amount to be apportioned during the fiscal year.

(b) During the second and subsequent years of operation, one-twelfth of the total amount to be apportioned during the fiscal year on the fifteenth day of each month of the school year.

7. Notwithstanding the provisions of paragraph 6 of this subsection, if sufficient appropriated monies are available after the first forty days in session of the current year, a charter school may request additional state monies to fund the increased state aid due to anticipated student growth through the first one hundred days or two hundred days in session, as applicable, of the current year as provided in section 15-948. In no event shall a charter school have received more than three-fourths of its total apportionment before April 15 of the fiscal year. Early payments pursuant to this subsection must be approved by the state treasurer, the director of the department of administration and the superintendent of public instruction.

8. The charter school shall not charge tuition, levy taxes or issue bonds.

9. The superintendent of public instruction shall furnish to the county 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 county treasurer of each county 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 2, subdivisions (a) and (b) and daily attendance as prescribed in section 15-901, subsection A, paragraph 6, for that pupil in the school district and the charter school shall not exceed 1.0. If the pupil is enrolled in both a charter school and a public school that is not a charter school 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 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 for the apportionment of 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 or the state board for charter schools, The total of the base support level, and until June 30, 1999, the transportation support level, the capital outlay revenue limit and the capital levy revenue limit, and from and after June 30, 1999, the additional assistance, shall not be less than zero.

3. For a charter school sponsored by a school district, the base support level for the school district shall not be reduced by more than the amount that the charter school increased the district's base support level, and until June 30, 1999, the transportation support level, capital outlay revenue limit and capital levy revenue limit, and from and after June 30, 1999, the soft capital allocation.

E. From and after June 30, 1999, notwithstanding subsection B, paragraph 5 of this section, 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.

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.

G. 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 P.L. 81-874 monies. The auditor general shall determine which federal or state monies meet the definition in this subsection.

Sec. 2. Section 15-901, Arizona Revised Statutes, 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 or two hundred days in session, as applicable.

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 or two hundred days in session, as applicable, 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 or two hundred days' equivalency, as applicable, 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 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 his 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.

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 1998-1999, two thousand five hundred thirty-two dollars sixty cents.

(b) For fiscal year 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 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 15-923, Arizona Revised Statutes, is amended to read:

15-923 . Contracts for transportation

A. As an alternative to maintaining and operating a transportation program or in conjunction with a transportation program, a school district OR CHARTER SCHOOL may , if it is found to be economically advantageous, MAY contract for transportation. Contracts may be with another political subdivision , OR a common or contract carrier or a private party. NOTWITHSTANDING ANY OTHER LAW THE DEPARTMENT OF EDUCATION SHALL REIMBURSE THE SCHOOL DISTRICT OR CHARTER SCHOOL AT THE RATE EQUIVALENT TO THE EXPENSES FOR TRANSPORTATION BY PRIVATE CONVEYANCES SET BY THE DEPARTMENT OF ADMINISTRATION.

B. In addition to other powers and duties prescribed by title 11, chapter 2, article 4, any board of supervisors may at the request of any or all of the governing boards of the school districts OR CHARTER SCHOOLS within the county provide necessary student transportation. If the board of supervisors and the governing board or boards of such school districts OR CHARTER SCHOOLS mutually agree that such an arrangement is economically advantageous, the governing board of the school district OR THE CHARTER SCHOOL is authorized to sell or lease its bus or buses to the board of supervisors for such purposes. Agreement between the parties shall be by written contract.

C. In no event shall an eligible student who is transported part by contract and part by school district transportation facilities be counted as more than one eligible student.

Sec. 4. 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 approved daily route mileage of the school district for the fiscal year prior to the current year.

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 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 PUPILS 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 PUPIL from the place of his THE PUPIL'S 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 THE PUPIL'S 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. 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. 5. Section 15-961, Arizona Revised Statutes, is amended to read:

15-961 . Capital outlay revenue limit; growth rate

A. A capital outlay revenue limit per student count is established for fiscal year 1984-1985 as follows:

1. For kindergarten programs and grades one through eight multiply one hundred fifty-five dollars by the weight which corresponds to the student count for kindergarten programs and grades one through eight for the school district as provided in section 15-943, paragraph 1, subdivision (a), column 3. For a school district with a student count of six hundred or more in kindergarten programs and grades one through eight multiply one hundred fifty-five dollars by 1.158.

2. For grades nine through twelve multiply one hundred sixty-eight dollars by the weight which corresponds to the student count for grades nine through twelve for the school district as provided in section 15-943, paragraph 1, subdivision (b), column 3. For a school district with a student count of six hundred or more in grades nine through twelve multiply one hundred sixty-eight dollars by 1.268.

3. For programs for preschool children with disabilities multiply one hundred fifty-five dollars by 1.158.

B. For fiscal year 1985-1986 and each year thereafter the capital outlay revenue limit prescribed in subsection A of this section shall be adjusted by the growth rate prescribed by law, subject to appropriation.

C. For fiscal year 1985-1986 and each year thereafter the capital outlay revenue limit for a school district shall be computed as follows:

1. Select the applicable capital outlay revenue limit or limits per student count for the school district.

2. Multiply the amount or amounts selected in paragraph 1 of this subsection by the appropriate student count of the school district. From and after June 30, 1999, the student count of the school district shall not include any pupils in a charter school sponsored by the district pursuant to section 15-185, subsection A, paragraph 3 .

3. If a school district's student count used for the budget year is greater than one hundred five per cent of the student count used for the current year's budget, increase the adjusted capital outlay revenue limit determined in paragraph 2 of this subsection by the actual percentage increase in the school district's student count.

D. For fiscal year 1985-1986 and each year thereafter, an amount for the purchase of required textbooks and related printed subject matter materials shall be used to increase the capital outlay revenue limit for a school district as determined in subsection C, paragraph 2 or 3 of this section, whichever is applicable. For fiscal year 1985-1986, the funding level is fifty-seven dollars fifty cents. For fiscal year 1986-1987 and each year thereafter, the funding level is the funding level of the previous year adjusted by the growth rate prescribed by law, subject to appropriation. The amount to be added to the amount in subsection C, paragraph 2 or 3 of this section, whichever is applicable, to determine the capital outlay revenue limit for a school district is computed as follows:

1. For fiscal year 1985-1986, multiply the student count in grade nine by the funding level for the applicable year as prescribed in this subsection.

2. For fiscal year 1986-1987, multiply the student count in grades nine and ten by the funding level for the applicable year as prescribed in this subsection.

3. For fiscal year 1987-1988, multiply the student count in grades nine through eleven by the funding level for the applicable year as prescribed in this subsection.

4. For fiscal year 1988-1989 and FOR each FISCAL year thereafter, multiply BY MULTIPLYING the student count in grades nine through twelve by the funding level for the applicable year as prescribed in this subsection.

Sec. 6. Section 15-962, Arizona Revised Statutes, is amended to read:

15-962 . Capital levy revenue limit; soft capital allocation

A. Until June 30, 1999, a capital levy revenue limit per student count is established for fiscal year 1985-1986, and from and after June 30, 1999, a soft capital allocation per student count is established for fiscal year 1999-2000, as follows:

1. For kindergarten programs and grades one through eight, until June 30, 1999, multiply one hundred twenty-five dollars, and from and after June 30, 1999, multiply one hundred ninety-four dollars thirty cents, by the weight which corresponds to the student count for kindergarten programs and grades one through eight for the school district as provided in section 15-943, paragraph 1, subdivision (a), column 3.

2. For grades nine through twelve, until June 30, 1999, multiply one hundred twenty-five dollars, and from and after June 30, 1999, multiply one hundred ninety-four dollars thirty cents, by the weight which corresponds to the student count as provided in section 15-943, paragraph 1, subdivision (a), column 3.

3. For a school district with a student count of six hundred or more in kindergarten programs and grades one through eight or grades nine through twelve, until June 30, 1999, multiply one hundred twenty-five dollars, and from and after June 30, 1999, multiply one hundred ninety-four dollars thirty cents, by 1.158.

4. For programs for preschool children with disabilities, until June 30, 1999, multiply one hundred twenty-five dollars, and from and after June 30, 1999, multiply one hundred ninety-four dollars thirty cents, by 1.158.

B. Beginning with fiscal year 1986-1987 and until June 30, 1999, the capital levy revenue limit prescribed in subsection A of this section shall be adjusted by the growth rate prescribed by law, subject to appropriation. From and after June 30, 1999, beginning with fiscal year 2000-2001, the soft capital allocation prescribed in subsection A of this section shall be adjusted by the growth rate prescribed by law, subject to appropriation.

C. Beginning with fiscal year 1985-1986 and until June 30, 1999, the capital levy revenue limit for a school district, and from and after June 30, 1999, beginning in fiscal year 1999-2000, the soft capital allocation for a school district, is computed as follows:

1. Select the applicable capital levy revenue limits until June 30, 1999, and from and after June 30, 1999, the applicable soft capital allocation, per student count for the school district as provided in subsection A of this section.

2. Multiply the amount selected in paragraph 1 of this subsection by the appropriate student count of the school district. From and after June 30, 1999, the student count of the school district shall not include any pupils in a charter school sponsored by the school district pursuant to section 15-185, subsection A, paragraph 3 .

D. Until June 30, 1999, the governing board may accumulate monies collected as provided in this section in the reserve of the capital outlay fund. If the governing board chooses to accumulate monies in the reserve of the capital outlay fund, it shall adopt and may subsequently amend a plan for the use of the reserve that specifies how and when the monies in the reserve are to be expended. The maximum amount which may be placed in or added to the reserve in any one year shall not exceed the sum of the capital levy revenue limit for that year and the federal impact capital levy adjustment, as provided in section 15-964, for that year, and the maximum amount accumulated in the reserve in any fiscal year shall not exceed five times the capital levy revenue limit for that year, except as provided in subsection E of this section. The governing board shall report the actual amount accumulated in the reserve in the annual financial report of the school district as provided in section 15-904. Monies accumulated in the reserve of the capital outlay fund as provided in this section shall be expended only in accordance with the following:

1. A plan for the use of the reserve shall follow a standard format as prescribed in the uniform system of financial records.

2. A plan for the use of the reserve shall be adopted or amended at a public hearing on the proposed plan. No later than ten days before the hearing, the governing board shall publish a notice of the public hearing in a newspaper of general circulation within the school district or the governing board may mail the notice to each household in the school district.

3. If the governing board adopts or amends a plan for the use of the reserve that includes the construction of school buildings, excluding relocatable buildings, or the purchase of school sites at an estimated cost in excess of two hundred fifty thousand dollars for a district with a student count of at least five hundred or an estimated cost in excess of one hundred thousand dollars for a district with a student count of fewer than five hundred, the portion of the plan that includes the construction of school buildings, excluding relocatable buildings, or purchase of school sites shall not be implemented until that portion of the plan is approved by a majority of the qualified electors voting in an election called for such purpose. The election shall be conducted and the notice and ballots shall be prepared as provided in section 15-481, except that the governing board shall hold the election on a date prescribed in section 15-491, subsection E. In this paragraph, "relocatable buildings" means buildings which are designed to be relocated as defined in the uniform system of financial records and are placed on a school site which has existing school buildings.

E. Until June 30, 1999, if a governing board desires to accumulate monies in the reserve of the capital outlay fund in excess of the maximum amount permitted in subsection D of this section, it may petition the state board of education requesting authority to exceed the maximum amount that may be placed in or added to the reserve in a single year or to exceed the maximum amount that can be accumulated in the reserve in any fiscal year as specified in subsection D of this section. The state board of education shall hold a hearing on the petition within sixty days after receipt and shall determine whether to allow the petition, allow the petition after revision or deny the petition.

F. From and after June 30, 1999, a school district shall receive its soft capital allocation in the amount determined in this section from monies appropriated for this purpose to the department of education. Soft capital allocation monies shall only be used for short-term capital items that are required to meet academic adequacy standards such as technology, textbooks, library resources, instructional aids, pupil transportation vehicles, furniture and equipment. School districts shall not use any portion of soft capital allocation monies for maintenance and operation expenses. School districts may use soft capital allocation MONIES to meet administrative soft capital purposes after complying with the adequacy standards prescribed in section 15-2011.

G. From and after June 30, 1999, school districts shall establish a district soft capital allocation fund and shall use the monies only for the purposes prescribed in subsection F of this section. The ending unexpended budget balance in the school district's soft capital allocation fund may be used in following fiscal years for short-term capital items. School districts shall provide to the superintendent of public instruction an itemized accounting on forms provided by the department of education that details the expenditures of soft capital allocation monies at each school in the district. The superintendent of public instruction shall forward a copy of the report to the school facilities board established by section 15-2001.

H. A school district governing board may petition the state board of education for authority to budget and accumulate for school construction purposes a portion of the prior year's ending cash balance, not to exceed the amount of P.L. 81-874 monies which the school district was entitled to receive in the prior year, as computed by the superintendent of public instruction, if:

1. The governing board filed with the United States department of education division of impact aid an approved application for federal assistance for construction under P.L. PUBLIC LAW 81-815 for the current or budget year and has been advised by the division of impact aid that no federal monies are available to fund its application.

2. The school district has a computed assessed valuation per pupil which is below the median amount computed by the superintendent of public instruction for all school districts.

3. The governing board has used any available revenues to reduce its primary tax rate to zero for any year in which it petitions to budget and accumulate monies received under P.L. 81-874 for school construction purposes.

The state board of education may grant approval to a school district governing board to annually budget and until June 30, 1999, accumulate, for a period of not to exceed five years, a portion of the cash balance, after any reversion as required by section 15-991.02, not to exceed the amount of P.L. 81-874 monies which the school district was entitled to receive in the prior year as computed by the superintendent of public instruction. Until June 30, 1999, the monies from the cash balance shall be placed in the reserve of the capital outlay fund and are specifically exempt from the capital levy revenue limit. From and after June 30, 1999, the state board of education may grant approval to a school district governing board to annually budget in the unrestricted capital outlay section of the budget a portion of the cash balance, not to exceed the amount of P.L. 81-874 monies which the school district was entitled to receive in the prior year as computed by the superintendent of public instruction.

I. The state board of education shall not include in the aggregate expenditures of local revenues as determined in section 15-911 the amount of revenues collected pursuant to until June 30, 1999, the capital levy revenue , and from and after June 30, 1999, the soft capital allocation limit. Until June 30, 1999, the amount of revenues collected for the capital levy revenue and from and after June 30, 1999, the soft capital allocation limit is the capital levy as authorized by law.