HB2481 - School districts; records; noncompliance; penalties

Senate Engrossed House Bill school districts; records; noncompliance; penalties State of Arizona House of Representatives Fifty-seventh Legislature Second Regular Session 2026 HOUSE BILL 2481 AN ACT amending sections 15-272, 15-302, 15-481 and 15-491, Arizona Revised Statutes; relating to school district financial records. (TEXT OF BILL BEGINS ON NEXT PAGE) Be it enacted by the Legislature of the State of Arizona: Section 1. Section 15-272, Arizona Revised Statutes, is amended to read: START_STATUTE 15-272. Duties; department of education; state board of education; sanctions for noncompliance with uniform system of financial records A. The department of education shall advise and consult with the auditor general in the preparation preparing and implementation of implementing a uniform system of financial records. B. The state board of education, on report from the auditor general, shall determine whether school districts are maintaining the uniform system of financial records. If the state board of education determines that a school district is not in compliance with the uniform system of financial records or has failed to correct a deficiency within ninety days after receiving notice from the auditor general for one of the following periods of time , the state board of education shall : 1. If the school district fails to correct a deficiency within ninety days after receiving notice from the auditor general, do both of the following: ( a ) Direct the superintendent of public instruction to withhold up to ten per cent percent of the portion of state monies to the school district for each violation from the date of the determination until such time as the auditor general reports the school district's compliance with the uniform system of financial records. The auditor general and the department of education shall assist the school district to achieve compliance during such period. ( b ) Consult with the department of education to determine the amount of training and other interventions necessary or appropriate to assist the school district to achieve compliance and direct the d epartment of education to provide to the school district a list of approved training programs and providers for the training and interventions prescribed by the state board and the department pursuant to this subdivision. Not later than thirty calendar days after the school district receives the list of approved training programs and providers from the department, the school district shall implement any interventions that are prescribed pursuant to this subdivision and shall provide Any training that is prescribed pursuant to this subdivision to the school district's superintendent, business manager and chief financial officer and any other administrator or executive identified by the state board of education or the department of education. The school district shall notify the department when each intervention is implemented and when each administrator completes the training. The department shall notify the state board of education when the training and interventions provided pursuant to this subdivision are completed. 2. If the school district fails to correct a deficiency within eighteen months after receiving notice from the auditor general, notify the school district governing board that the school district's superintendent is ineligible to receive performance-based pay, including the portion of the superintendent's annual salary that is classified as performance pay pursuant to section 15-341, subsection A, paragraph 39, for the period beginning on the first day of the eighteenth month after the school district receives notice from the auditor general and until such time as the auditor general reports the school district's compliance with the uniform system of financial records. C. The general budget limit and maintenance and operations section of the budget for the current year and for the budget year if the school district is not in compliance before the end of the current year , shall be reduced by the amount determined in subsection B , paragraph 1 of this section until the state board of education determines that the school district is in compliance. D. If compliance is determined by the state board of education in the same year as the determination of noncompliance or in the first year after the fiscal year of the determination of noncompliance, the resulting adjustment to budgeted maintenance and operations and to the general budget limit may be applied to the fiscal year of the determination of noncompliance equal to the amount adjusted in that fiscal year or to the current year equal to the amount adjusted in the current year. Previously withheld monies that resulted from the determination of noncompliance shall be returned in the year compliance is determined. END_STATUTE Sec. 2. Section 15-302, Arizona Revised Statutes, is amended to read: START_STATUTE 15-302. Powers and duties A. The county school superintendent shall: 1. Distribute all laws, reports, circulars, instructions and forms that the county school superintendent may receive for the use of school officers. 2. Record all official acts. 3. Appoint governing board members of school districts to fill all vacancies, but the term of the appointment shall be until the next regular election for governing board members, at which time a successor shall be elected to serve the unexpired portion of the term. A person who is subject to registration as a sex offender in this state or in any other jurisdiction is ineligible for appointment under this paragraph. Within thirty days after notification of a vacancy, the school district governing board may submit up to three names to the county school superintendent for consideration of an appointment to fill the vacancy. The county school superintendent is not required to appoint a governing board member from the list of names submitted by the governing board. The county school superintendent, if the county school superintendent deems it in the best interest of the community, may call a special election to fill the vacancies. If an election is called, the newly elected member shall serve for the remainder of the unexpired portion of the term. 4. Make reports, when directed by the superintendent of public instruction, showing matters relating to schools in the county as may be required on the forms furnished by the superintendent of public instruction. 5. Have such powers and perform such duties as otherwise prescribed by law. 6. On or before October 1 of each year, report to the superintendent of public instruction the amount of monies received from state school funds, special school district taxes and other sources, the total expenditures for school purposes and the balance on hand to the credit of each school district at the close of the school year. 7. Contract with the board of supervisors for the board of supervisors to conduct all regular school district elections. 8. Be responsible, in cooperation with the school district governing boards and the board of supervisors, for all special school district elections. 9. Maintain teacher and administrator certification records of effective dates and expiration dates of teachers' and administrators' certificates in compliance with guidelines prescribed in the uniform system of financial records for those school districts for which the county school superintendent is the fiscal agent. The county school superintendent shall not draw a warrant in payment of a teacher's, substitute teacher's or administrator's salary unless the teacher, substitute teacher or administrator is legally certified during the fiscal year in which the term for payment is demanded. 10. Notify a school district three years before the expiration of a revenue control limit override that the school district's budget must be adjusted in the final two years of the override pursuant to section 15-481, subsections P Q and Q R , if the voters do not approve another override. 11. In collaboration with the department of education and other state agencies, assist school districts, charter schools, county free library districts, municipal libraries, nonprofit and public libraries, tribal libraries, private schools and tribal schools on using student data, staff development, curriculum alignment and technology to improve student performance. 12. Assist schools in meeting yearly adequate progress goals as defined by criteria established by the state board of education and implemented by the department of education. B. At the request of school districts and charter schools, the county school superintendent may provide discretionary programs in addition to the programs prescribed in subsection A of this section. C. The county school superintendent may: 1. Provide the services prescribed in subsections A and B of this section in the county or jointly with two or more counties pursuant to title 11, chapter 7, article 3. 2. Review the operations and finances, including expenditures, of any school district that is located in the county. D. Each county school superintendent may establish an advisory committee to the office of the county school superintendent. END_STATUTE Sec. 3. Section 15-481, Arizona Revised Statutes, is amended to read: START_STATUTE 15-481. Override election; budget increases; eligibility; informational pamphlet; notice; ballot; effect A. If a proposed budget of a school district exceeds the aggregate budget limit for the budget year, at least ninety days before the proposed election the governing board shall order an override election to be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection F for the purpose of presenting the proposed budget to the qualified electors of the school district who by a majority of those voting either shall affirm or reject the budget. At the same time as the order of the election, the governing board shall publicly declare the deadline for submitting arguments, as set by the county school superintendent pursuant to subsection B, paragraph 9 of this section, to be submitted in the informational pamphlet and shall immediately post the deadline in a prominent location on the district's website. In addition, the governing board shall prepare an alternate budget that does not include an increase in the budget of more than the amount allowed as provided in section 15-905. If the qualified electors approve the proposed budget, the governing board of the school district shall follow the procedures prescribed in section 15-905 for adopting a budget that includes the authorized increase. If the qualified electors disapprove the proposed budget, the governing board shall follow the procedures prescribed in section 15-905 for adopting a budget that does not include the proposed increase or the portion of the proposed increase that exceeds the amount authorized by a previously approved budget increase as prescribed in subsection P Q of this section. B. The county school superintendent shall prepare an informational pamphlet on the proposed increase in the budget and a sample ballot and, at least forty days before the election, shall transmit the informational pamphlet and the sample ballot to the governing board of the school district. The governing board, on receipt of the informational pamphlet and the ballot, shall mail or distribute the informational pamphlet and the ballot to the households in which qualified electors reside within the school district at least thirty-five days before the election. Any distribution of material concerning the proposed increase in the budget shall not be conducted by children enrolled in the school district. The informational pamphlet shall contain the following information: 1. The date of the election. 2. The voter's polling place and the times it is open. 3. The proposed total increase in the budget that exceeds the amount allowed pursuant to section 15-905. 4. The total amount of the current year's budget, the total amount of the proposed budget and the total amount of the alternate budget. 5. If the override is for a period of more than one year, a statement indicating the number of years the proposed increase in the budget would be in effect and the percentage of the school district's revenue control limit that the district is requesting for the future years. 6. The proposed total amount of revenues that will fund the increase in the budget and the amount that will be obtained from a levy of taxes on the taxable property within the school district for the first year for which the budget increase was adopted. 7. The proposed amount of revenues that will fund the increase in the budget and that will be obtained from other than a levy of taxes on the taxable property within the school district for the first year for which the budget increase was adopted. 8. The dollar amount and the purpose for which the proposed increase in the budget is to be expended for the first year for which the budget increase was adopted. The purpose statement shall only present factual information in a neutral manner. Advocacy for the expenditures is strictly limited to the arguments submitted pursuant to paragraph 9 of this subsection. 9. At least two arguments, if submitted, but not more than ten arguments for and two arguments, if submitted, but not more than ten arguments against the proposed increase in the budget. The arguments shall be in a form prescribed by the county school superintendent, and each argument shall not exceed two hundred words. Arguments for the proposed increase in the budget shall be provided in writing and signed by the governing board. The ballot arguments for the proposed increase in the budget shall be signed as the governing board of the school district without listing any member's individual name for the arguments for the proposed increase. If submitted, additional arguments in favor of the proposed increase in the budget shall be provided in writing with a signed, sworn statement by those in favor. Arguments against the proposed increase in the budget shall be provided in writing with a signed, sworn statement by those in opposition. If the argument is submitted by an organization, it shall contain the sworn statement of two executive officers of the organization. If the argument is submitted by a political committee, it shall contain the sworn statement of the committee's chairperson or treasurer. If the argument is submitted by an individual and not on behalf of an organization, a political committee or any other group, the person individual shall submit the argument with a sworn, notarized statement. The names of persons and entities submitting written arguments shall be included in the informational pamphlet. Persons signing the argument shall identify themselves by giving their residence address and telephone number, which may not appear in the informational pamphlet, except that the p [Text truncated for display. Full text available on LegiScan.]