15-977

15-977. Classroom site fund;
definitions

A. The classroom site fund is established consisting of monies transferred to the
fund pursuant to section 37-521, subsection B and section 42-5029, subsection E,
paragraph 10. The department of education shall administer the fund. School districts
and charter schools may not supplant existing school site funding with revenues from the
fund. All monies distributed from the fund are intended for use at the school site.
Each school district or charter school shall allocate forty per cent of the monies for
teacher compensation increases based on performance and employment related expenses,
twenty per cent of the monies for teacher base salary increases and employment related
expenses and forty per cent of the monies for maintenance and operation purposes as
prescribed in subsection H of this section. Teacher compensation increases based on
performance or teacher base salary increases distributed pursuant to this subsection
shall supplement, and not supplant, teacher compensation monies from any other sources.
The school district or charter school shall notify each school principal of the amount
available to the school by April 15 of each year. The district or charter school shall
request from the school's principal each school's priority for the allocation of the
funds available to the school for each program listed under subsection H of this section.
The amount budgeted by the school district or charter school pursuant to this section
shall not be included in the allowable budget balance carryforward calculated pursuant to
section 15-943.01.

B. A school district governing board must adopt a performance based compensation
system at a public hearing to allocate funding from the classroom site fund pursuant to
subsection A of this section.

C. A school district governing board shall vote on a performance based compensation
system that includes the following elements:

1. School district performance and school performance.

2. Measures of academic progress toward the academic standards adopted by the state
board of education.

3. Other measures of academic progress.

4. Dropout or graduation rates.

5. Attendance rates.

6. Ratings of school quality by parents.

7. Ratings of school quality by students.

8. The input of teachers and administrators.

9. Approval of the performance based compensation system based on an affirmative
vote of at least seventy per cent of the teachers eligible to participate in the
performance based compensation system.

10. An appeals process for teachers who have been denied performance based
compensation.

11. Regular evaluation for effectiveness.

D. A performance based compensation system shall include teacher professional
development programs that are aligned with the elements of the performance based
compensation system.

E. A school district governing board may modify the elements contained in
subsection C of this section and consider additional elements when adopting a performance
based compensation system. A school district governing board shall adopt any
modifications or additional elements and specify the criteria used at a public hearing.

F. Until December 31, 2009, each school district shall develop an assessment plan
for its performance based compensation system and submit the plan to the department of
education by December 31 of each year. A copy of the performance based compensation
system and assessment plan adopted by the school district governing board shall be
included in the report submitted to the department of education.

G. Monies in the fund are continuously appropriated, are exempt from the provisions
of section 35-190 relating to lapsing of appropriations and shall be distributed as
follows:

1. By March 30 of each year the staff of the joint legislative budget committee
shall determine a per pupil amount from the fund for the budget year using the estimated
statewide weighted count for the current year pursuant to section 15-943, paragraph 2,
subdivision (a) and based on estimated available resources in the classroom site fund for
the budget year adjusted for any prior year carryforward or shortfall.

2. The allocation to each charter school and school district for a fiscal year
shall equal the per pupil amount established in paragraph 1 of this subsection for the
fiscal year multiplied by the weighted student count for the school district or charter
school for the fiscal year pursuant to section 15-943, paragraph 2, subdivision (a). For
the purposes of this paragraph, the weighted student count for a school district that
serves as the district of attendance for nonresident pupils shall be increased to include
nonresident pupils who attend school in the school district.

3. For each fiscal year in which the legislature appropriates sufficient monies for
teacher performance pay pursuant to this section, the amount appropriated shall equal the
product of the base level prescribed in section 15-901 multiplied by the prior year
statewide weighted student count multiplied by the following percentages:

(a) For stage one, one per cent.

(b) For stage two, two per cent.

(d) For stage four, four per cent.

(e) For stage five, five per cent.

(f) For stage six, five and one-half per cent by June 30, 2018.

H. Monies distributed from the classroom site fund shall be spent for the following
maintenance and operation purposes:

1. Class size reduction.

2. Teacher compensation increases.

3. AIMS intervention programs.

4. Teacher development.

5. Dropout prevention programs.

6. Teacher liability insurance premiums.

I. The district governing board or charter school shall allocate the classroom site
fund monies to include, wherever possible, the priorities identified by the principals of
the schools while assuring that the funds maximize classroom opportunities and conform to
the authorized expenditures identified in subsection A of this section.

J. School districts and charter schools that receive monies from the classroom site
fund shall submit a report by November 15 of each year to the superintendent of public
instruction on a per school basis that provides an accounting of the expenditures of
monies distributed from the fund during the previous fiscal year and a summary of the
results of district and school programs funded with monies distributed from the
fund. The department of education in conjunction with the auditor general shall
prescribe the format of the report under this subsection.

K. School districts and charter schools that receive monies from the classroom site
fund shall receive these monies monthly in an amount not to exceed one-twelfth of the
monies estimated pursuant to subsection G of this section, except that if there are
insufficient monies in the fund that month to make payments, the distribution for that
month shall be prorated for each school district or charter school. The department of
education may make an additional payment in the current month for any prior month or
months in which school districts or charter schools received a prorated payment if there
are sufficient monies in the fund that month for the additional payments. The state is
not required to make payments to a school district or charter school classroom site fund
if the state classroom site fund revenue collections are insufficient to meet the
estimated allocations to school districts and charter schools pursuant to subsection G of
this section.

L. The state education system for committed youth shall receive monies from the
classroom site fund in the same manner as school districts and charter schools. The
Arizona state schools for the deaf and the blind shall receive monies from the classroom
site fund in an amount that corresponds to the weighted student count for the current
year pursuant to section 15-943, paragraph 2, subdivision (b) for each pupil enrolled in
the Arizona state schools for the deaf and the blind. Except as otherwise provided in
this subsection, the Arizona state schools for the deaf and the blind and the state
education system for committed youth are subject to this section in the same manner as
school districts and charter schools.

M. Each school district and charter school, including school districts that unify
pursuant to section 15-448 or consolidate pursuant to section 15-459, shall establish a
local level classroom site fund to receive allocations from the state level classroom
site fund. The local level classroom site fund shall be a budgetary controlled
account. Interest charges for any registered warrants for the local level classroom site
fund shall be a charge against the local level classroom site fund. Interest earned on
monies in the local level classroom site fund shall be added to the local level classroom
site fund as provided in section 15-978. In no event shall this state be required to make
payments to a school district or charter school local level classroom site fund that are
in addition to monies transferred to the state level classroom site fund pursuant to
section 37-521, subsection B and section 42-5029, subsection E, paragraph 10.

N. Monies distributed from the classroom site fund for class size reduction, AIMS
intervention and dropout prevention programs shall only be used for instructional
purposes in the instruction function as defined in the uniform system of financial
records, except that monies shall not be used for school sponsored athletics.

O. If a school district is approved for a career ladder program pursuant to section
15-918.04 or an optional performance incentive program pursuant to section 15-919, the
school district may continue to participate in those programs or may choose to receive
additional teacher performance pay monies pursuant to subsection G, paragraph 3 of this
section. If a school district chooses to receive monies pursuant to subsection G,
paragraph 3 of this section, the school district shall reduce the amount of funding for
its career ladder program or optional performance incentive program, as applicable, in an
amount that is equal to the amount appropriated by the legislature for the applicable
stage specified in subsection G, paragraph 3 of this section. If a school district is
approved for a career ladder program pursuant to section 15-918.04 or an optional
performance incentive program pursuant to section 15-919 and that school district chooses
to receive monies for stage one pursuant to subsection G, paragraph 3 of this section,
the school district shall continue to receive funding through the remaining stages
specified in subsection G, paragraph 3 of this section, subject to legislative
appropriation. A school district that is subject to this subsection shall notify the
department of education of the school district's intention to receive monies pursuant to
subsection G, paragraph 3 of this section no later than July 1 of the fiscal year that
stage one monies are appropriated.

P. For the purposes of this section:

1. "AIMS intervention" means summer programs, after school programs, before school
programs or tutoring programs that are specifically designed to ensure that pupils meet
the Arizona academic standards as measured by the Arizona instrument to measure standards
test prescribed by section 15-741.

2. "Class size reduction" means any maintenance and operations expenditure that is
designed to reduce the ratio of pupils to classroom teachers, including the use of
persons who serve as aides to classroom teachers.