15-2031

15-2031. Building renewal fund;
definitions

A. A building renewal fund is established consisting of monies appropriated by the
legislature. The school facilities board shall administer the fund and distribute monies
to school districts for the purpose of maintaining the adequacy of existing school
facilities. Monies in the fund are continuously appropriated and are exempt from the
provisions of section 35-190 relating to lapsing of appropriations.

B. The school facilities board shall inventory and inspect all school buildings in
this state in order to develop a database to administer the building renewal formula.
The database shall include the student capacity of the building as determined by the
school facilities board. The board shall distribute monies from the building renewal fund
to school districts in an amount computed pursuant to subsection I of this section. A
school district that receives monies from the building renewal fund shall use the monies
first for any projects that fall below the minimum school facility adequacy guidelines,
as adopted by the school facilities board pursuant to section 15-2011, and that are part
of any buildings in the database and second for any other projects that are part of any
buildings owned by the school district for any of the following:

1. Major renovations and repairs of a building.

2. Upgrading systems and areas that will maintain or extend the useful life of the
building.

3. Infrastructure costs.

4. Relocation and placement of portable and modular buildings.

C. Monies received from the building renewal fund shall be used for primary
projects, unless only secondary projects exist.

D. Notwithstanding subsections B and C of this section, school districts shall use
building renewal monies on secondary projects to comply with building, health, fire or
safety codes. Before spending building renewal monies on secondary projects to comply
with building, health, fire or safety codes, the school facilities board shall approve
the projects.

E. Monies received from the building renewal fund shall not be used for any of the
following purposes:

1. New construction.

2. Remodeling interior space for aesthetic or preferential reasons.

3. Exterior beautification.

4. Demolition.

5. The purchase of soft capital items pursuant to section 15-962, subsection D.

6. Routine maintenance except as provided in section 15-2002, subsection K and
subsection L of this section.

F. The school facilities board shall maintain the building renewal database and use
the database for the computation of the building renewal formula distributions. The board
shall ensure that the database is updated on at least an annual basis to reflect changes
in the ages and value of school buildings. The facilities listed in the database shall
include only those buildings that are owned by school districts that are required to meet
academic standards. Each school district shall report to the school facilities board no
later than October 15 of each year the number and type of school buildings owned by the
district, the square footage of each building, the age of each building, the nature of
any renovations completed and the cost of any renovations completed. The school
facilities board may review or audit, or both, to confirm the information submitted by a
school district. If a joint technical education district leases a building from a school
district, that building shall not be included in the school district's square footage
calculation for the purposes of determining the school district's building renewal
distribution pursuant to this section. The board shall adjust the age of each school
facility in the database whenever a building is significantly upgraded or remodeled. The
age of a building that has been significantly upgraded or remodeled shall be recomputed
as follows:

1. Divide the cost of the renovation by the building capacity value of the building
determined in subsection I, paragraph 3 of this section.

2. Multiply the quotient determined in paragraph 1 of this subsection by the
currently listed age of the building in the database.

3. Subtract the product determined in paragraph 2 of this subsection from the
currently listed age of the building in the database, rounded to the nearest whole
number. If the result is negative, use zero.

G. The school facilities board shall submit electronically an annual report to the
president of the senate, the speaker of the house of representatives, the Arizona state
library, archives and public records and the governor by October 1 that includes the
computation of the amount of monies to be distributed from the building renewal fund for
the current fiscal year. The joint committee on capital review shall review the school
facilities board's calculation of the building renewal fund distributions. After the
joint committee on capital review reviews the distributions computed by the school
facilities board, the school facilities board shall distribute the monies from the
building renewal fund to school districts in two equal installments in November and May
of each year.

H. School districts that receive monies from the building renewal fund shall
establish a district building renewal fund and shall use the monies in the district
building renewal fund only for the purposes prescribed in subsection B of this section.
Ending cash balances in a school district's building renewal fund may be used in
following fiscal years for building renewal pursuant to subsection B of this section. By
October 15 of each year, each school district shall report to the school facilities board
the projects funded at each school in the previous fiscal year with monies from the
district building renewal fund, including the amount of expenditures dedicated to primary
projects and to secondary projects. On receipt of these reports, the school facilities
board shall forward this information to the joint legislative budget committee staff and
the governor's office of strategic planning and budgeting staff. Each school district
shall also report to the school facilities board an accounting of the monies remaining in
the district building renewal fund at the end of the previous fiscal year and a
comprehensive three year plan that details the proposed use of building renewal monies.
If a school district fails to submit the report by October 15 or the information required
by subsection F of this section, the school facilities board shall withhold building
renewal monies from the school district until the school facilities board determines that
the school district has complied with the reporting requirement. When the school
facilities board determines that the school district has complied with the reporting
requirement, the school facilities board shall restore the full amount of withheld
building renewal monies to the school district.

I. Notwithstanding any other provision of this chapter, if a school district
converts space that is listed in the database maintained pursuant to this section to
space that will be used for administrative purposes, the school district is responsible
for any costs associated with the conversion, maintenance and replacement of that space.
The building renewal amount for each school building shall be computed as follows:

1. Divide the age of the building as computed pursuant to subsection F of this
section by one thousand two hundred seventy-five or, in the case of modular or portable
buildings, by two hundred ten.

2. Multiply the quotient determined in paragraph 1 of this subsection by 0.67.

3. Determine the building capacity value as follows:

(a) Multiply the student capacity of the building by the per student square foot
capacity established by section 15-2041.

(b) Multiply the product determined in subdivision (a) by the cost per square foot
established by section 15-2041.

4. Multiply the product determined in paragraph 2 of this subsection by the product
determined in paragraph 3, subdivision (b) of this subsection.

J. If the school facilities board determines that a school district has spent
monies from the building renewal fund for purposes other than those prescribed in
subsection B of this section, the school facilities board shall notify the superintendent
of public instruction. Notwithstanding any other law, the superintendent of public
instruction shall withhold a corresponding amount from the monies that would otherwise be
due the school district under the capital outlay revenue limit until these monies are
repaid.

K. A school district is not entitled to receive monies from the building renewal
fund for any buildings that are to be replaced with new buildings that are funded with
deficiencies corrections monies. The replacement buildings are not eligible to receive
building renewal funding until the fiscal year following the completion of the building.

L. Notwithstanding subsections B and E of this section, a school district may use
eight per cent of the building renewal amount computed pursuant to subsection I of this
section for routine preventative maintenance. The board, after consultation with
maintenance specialists in school districts, shall provide examples of recommended
services that are routine preventative maintenance.

M. A school district that uses building renewal monies for routine preventative
maintenance shall use the building renewal monies to supplement and not supplant
expenditures from other funds for the maintenance of school buildings. The auditor
general shall prescribe a method for determining compliance with the requirements of this
subsection. A school district, in connection with any audit conducted by a certified
public accountant, shall also contract for an independent audit to determine whether the
school district used building renewal monies to reduce the school district's existing
level of routine preventative maintenance funding. The auditor general may conduct
discretionary reviews of a school district that is not required to contract for an
independent audit.

N. For the purposes of this section:

1. "Primary projects" means projects that are necessary for buildings owned by
school districts that are required to meet the academic standards listed in the database
maintained pursuant to subsection F of this section and that fall below the minimum
school facility adequacy guidelines, as adopted by the school facilities board pursuant
to section 15-2011.

2. "Routine preventative maintenance" means services that are performed on a
regular schedule at intervals ranging from four times a year to once every three years
and that are intended to extend the useful life of a building system and reduce the need
for major repairs.

3. "Secondary projects" means all projects that are not primary projects.

4. "Student capacity" has the same meaning prescribed in section 15-2011.