Purpose

Caps the expenditures that are exempt from the Revenue Control Limit (RCL) and the Capital Outlay Revenue Limit (CORL) of a school district for desegregation expenses at the FY 2001-2002 levels until FY 2003-2004. Requires school district governing boards to biennially report desegregation expenditures to the Arizona Department of Education (ADE). Establishes an eight-member Joint Legislative Committee on Desegregation Expenses.

Background

Arizona school districts are authorized to budget for the expenses of a court order for desegregation or an administrative agreement with the U.S. Department of Education Office of Civil Rights (OCR) (Laws 1985, Chapter 166, Section 15). Current law allows a governing board to budget for the expenses of complying with or continuing to implement activities which were required or permitted by a court order of desegregation or OCR administrative agreement directed toward remediating alleged or proven racial discrimination.

School district governing boards are required to prepare separate maintenance and operations and capital outlay desegregation budgets designed to allow a school district to plan and provide in detail for expenditures to be incurred for the purposes of complying with the court order or administrative agreement using a form prescribed by the State Superintendent in conjunction with the Auditor General. Additionally, the governing board is required to complete a detailed report of desegregation expenditures as part of the annual financial report.

Desegregation expenditures are exempt from the RCL and CORL. Governing boards may fund desegregation expenses outside of the RCL from the following options:

a) Use maintenance and operations monies equal to any excess desegregation or compliance expenses beyond the RCL before June 30 of the current year.

b) Notify the county school superintendent to add the amount necessary to comply with the court order or administrative agreement to the primary property tax rate.

c) A combination of the first two options if the amount does not exceed the budgeted amount.

The amount for which governing boards may budget for capital purposes is 12 percent of the maintenance and operation desegregation budget, and is funded by notifying the county school superintendent to add the amount necessary to the primary property tax rate.

Any fiscal impact to the state general fund associated with this bill is unknown at this time.

Provisions

1. Caps desegregation expenses for school districts at the FY 2001-2002 levels.

2. Allows new OCR administrative agreements and court orders for desegregation and school districts currently budgeting for desegregation expenses to exceed the capped budgeted amount for desegregation purposes beginning in FY 2003-2004.

3. Requires, by December 1, 2003, the Committees of Reference for the House and Senate Education Committees to conduct a sunset review of the funding mechanisms for desegregation expenditures and make recommendations for proposed legislation for the 2004 legislative session.

4. Requires school district governing boards to collect and report data regarding desegregation expenditures to ADE on or before September 30, 2003 and every two years thereafter. Stipulates data items to be collected.

5. Establishes an eight-member Joint Legislative Committee on Desegregation Expenses (Committee) to review stipulated items. Requires the Committee to report to the Governor and Legislature by December 1, 2002 and repeals the Committee on January 1, 2003.

6. Contains technical changes.

7. Provides for a general effective date.

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