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

Section 1. Section 8-521, Arizona Revised Statutes, is amended to read:

START_STATUTE8-521. Independent living program; conditions; eligibility; rules; case management unit; reports

A. The department or a licensed child welfare agency may establish an independent living program for youths who are the subject of a dependency petition or who are adjudicated dependent and are all of the following:

1. In the custody of the department, a licensed child welfare agency or a tribal child welfare agency.

2. At least seventeen years of age.

3. Employed or full‑time students.

B. The independent living program may consist of a residential program of less than twenty‑four hours' a day supervision for youths under the supervision of the department through a licensed child welfare agency or a foster home under contract with the department. Under the independent living program the youth is not required to reside at a licensed child welfare agency or foster home.

C. The director or the director's designee shall review and approve any recommendation to the court that a youth in the custody of the department be ordered to an independent living program.

D. For a youth to participate in an independent living program, the court must order such a disposition pursuant to section 8‑845.

E. The department, a licensed child welfare agency or a tribal child welfare agency having custody of the youth shall provide the cost of care as required by section 46‑134 for each child placed in an independent living program pursuant to this section, except that the monthly amount provided shall not exceed the average monthly cost of purchased services for the child in the three months immediately preceding placement in an independent living program.

F. The department shall adopt rules pursuant to title 41, chapter 6 to carry out this section.

G. The department shall provide quarterly progress reports to the court and to local foster care review boards for each youth participating in the independent living program.

H. The local foster care review boards shall review at least once every six months the case of each youth participating in the independent living program.

I. The department shall establish an educational case management unit within the division consisting of two case managers to develop and coordinate educational case management plans for youths participating in the independent living program and to assist youths in the program to do the following:

1. Graduate from high school.

2. Pass the Arizona instrument to measure standards test.

3. Apply for postsecondary financial assistance.

4. Apply for postsecondary education.

J. The department shall prepare a report on or before March 1 of each year that contains the following information for the previous calendar year:

1. The number of children in the program.

2. The number of children in the program by age and grade.

3. The number of children in the program by county of residence.

4. The number of children in the program who graduated from high school.

5. The number of children in the program who received a general equivalency diploma.

6. The number of children in the program enrolled in postsecondary education.

K. The department shall submit a copy of the report prescribed in subsection J of this section to the governor, the president of the senate, the speaker of the house of representatives, and the secretary of state and the director of the Arizona state library, archives and public records. END_STATUTE

Sec. 2. Section 15-183, Arizona Revised Statutes, is amended to read:

START_STATUTE15-183. Charter schools; application; requirements; immunity; exemptions; renewal of application; reprisal; fee; funds

A. An applicant seeking to establish a charter school shall submit a written application to a proposed sponsor as prescribed in subsection C of this section. The application, application process and application time frames shall be posted on the sponsor's website and shall include the following, as specified in the application adopted by the sponsor:

1. A detailed educational plan.

2. A detailed business plan.

3. A detailed operational plan.

4. Any other materials required by the sponsor.

B. The sponsor of a charter school may contract with a public body, private person or private organization for the purpose of establishing a charter school pursuant to this article.

C. The sponsor of a charter school may be either a school district governing board, the state board of education, the state board for charter schools, a university under the jurisdiction of the Arizona board of regents, a community college district with enrollment of more than fifteen thousand full‑time equivalent students or a group of community college districts with a combined enrollment of more than fifteen thousand full‑time equivalent students, subject to the following requirements:

1. For charter schools that submit an application for sponsorship to a school district governing board:

(a) An applicant for a charter school may submit its application to a school district governing board, which shall either accept or reject sponsorship of the charter school within ninety days. An applicant may submit a revised application for reconsideration by the governing board.� If the governing board rejects the application, the governing board shall notify the applicant in writing of the reasons for the rejection.� The applicant may request, and the governing board may provide, technical assistance to improve the application.

(b) In the first year that a school district is determined to be out of compliance with the uniform system of financial records, within fifteen days of the determination of noncompliance, the school district shall notify by certified mail each charter school sponsored by the school district that the school district is out of compliance with the uniform system of financial records. The notification shall include a statement that if the school district is determined to be out of compliance for a second consecutive year, the charter school will be required to transfer sponsorship to another entity pursuant to subdivision (c) of this paragraph.

(c) In the second consecutive year that a school district is determined to be out of compliance with the uniform system of financial records, within fifteen days of the determination of noncompliance, the school district shall notify by certified mail each charter school sponsored by the school district that the school district is out of compliance with the uniform system of financial records. A charter school that receives a notification of school district noncompliance pursuant to this subdivision shall file a written sponsorship transfer application within forty‑five days with the state board of education, the state board for charter schools or the school district governing board if the charter school is located within the geographic boundaries of that school district. A charter school that receives a notification of school district noncompliance may request an extension of time to file a sponsorship transfer application, and the state board of education, the state board for charter schools or a school district governing board may grant an extension of not more than an additional thirty days if good cause exists for the extension.� The state board of education and the state board for charter schools shall approve a sponsorship transfer application pursuant to this paragraph.

(d) A school district governing board shall not grant a charter to a charter school that is located outside the geographic boundaries of that school district.

(e) A school district that has been determined to be out of compliance with the uniform system of financial records during either of the previous two fiscal years shall not sponsor a new or transferring charter school.

2. The applicant may submit the application to the state board of education or the state board for charter schools. The state board of education or the state board for charter schools may approve the application if the application meets the requirements of this article and may approve the charter if the proposed sponsor determines, within its sole discretion, that the applicant is sufficiently qualified to operate a charter school and that the applicant is applying to operate as a separate charter holder by considering factors such as whether:

(a) The schools have separate governing bodies, governing body membership, staff, facilities, and student population.

(b) Daily operations are carried out by different administrators.

(d) The applicant's charter management organization has multiple charter holders serving varied grade configurations on one physical site or nearby sites serving one community.

(e) It is reconstituting an existing school site population at the same or new site.

(f) It is reconstituting an existing grade configuration from a prior charter holder with at least one grade remaining on the original site with the other grade or grades moving to a new site.

The state board of education or the state board for charter schools may approve any charter schools transferring charters. The state board of education and the state board for charter schools shall approve any charter schools transferring charters from a school district that is determined to be out of compliance with the uniform system of financial records pursuant to this section, but may require the charter school to sign a new charter that is equivalent to the charter awarded by the former sponsor. If the state board of education or the state board for charter schools rejects the preliminary application, the state board of education or the state board for charter schools shall notify the applicant in writing of the reasons for the rejection and of suggestions for improving the application.� An applicant may submit a revised application for reconsideration by the state board of education or the state board for charter schools.� The applicant may request, and the state board of education or the state board for charter schools may provide, technical assistance to improve the application.

3. The applicant may submit the application to a university under the jurisdiction of the Arizona board of regents, a community college district or a group of community college districts.� A university, a community college district or a group of community college districts may approve the application if it meets the requirements of this article and if the proposed sponsor determines, in its sole discretion, that the applicant is sufficiently qualified to operate a charter school.

4. Each applicant seeking to establish a charter school shall submit a full set of fingerprints to the approving agency for the purpose of obtaining a state and federal criminal records check pursuant to section 41‑1750 and Public Law 92‑544.� If an applicant will have direct contact with students, the applicant shall possess a valid fingerprint clearance card that is issued pursuant to title 41, chapter 12, article 3.1. The department of public safety may exchange this fingerprint data with the federal bureau of investigation. The criminal records check shall be completed before the issuance of a charter.

5. All persons engaged in instructional work directly as a classroom, laboratory or other teacher or indirectly as a supervisory teacher, speech therapist or principal shall have a valid fingerprint clearance card that is issued pursuant to title 41, chapter 12, article 3.1, unless the person is a volunteer or guest speaker who is accompanied in the classroom by a person with a valid fingerprint clearance card.� A charter school shall not employ a teacher whose certificate has been surrendered or revoked, unless the teacher's certificate has been subsequently reinstated by the state board of education.� All other personnel shall be fingerprint checked pursuant to section 15‑512.� Before employment, the charter school shall make documented, good faith efforts to contact previous employers of a person to obtain information and recommendations that may be relevant to a person's fitness for employment as prescribed in section 15‑512, subsection F.� The charter school shall notify the department of public safety if the charter school or sponsor receives credible evidence that a person who possesses a valid fingerprint clearance card is arrested for or is charged with an offense listed in section 41‑1758.03, subsection B. Charter schools may hire personnel that have not yet received a fingerprint clearance card if proof is provided of the submission of an application to the department of public safety for a fingerprint clearance card and if the charter school that is seeking to hire the applicant does all of the following:

(a) Documents in the applicant's file the necessity for hiring and placement of the applicant before receiving a fingerprint clearance card.

(b) Ensures that the department of public safety completes a statewide criminal records check on the applicant.� A statewide criminal records check shall be completed by the department of public safety every one hundred twenty days until the date that the fingerprint check is completed.

(c) Obtains references from the applicant's current employer and the two most recent previous employers except for applicants who have been employed for at least five years by the applicant's most recent employer.

(d) Provides general supervision of the applicant until the date that the fingerprint card is obtained.

(e) Completes a search of criminal records in all local jurisdictions outside of this state in which the applicant has lived in the previous five years.

(f) Verifies the fingerprint status of the applicant with the department of public safety.

6. A charter school that complies with the fingerprinting requirements of this section shall be deemed to have complied with section 15-512 and is entitled to the same rights and protections provided to school districts by section 15‑512.

7. If a charter school operator is not already subject to a public meeting or hearing by the municipality in which the charter school is located, the operator of a charter school shall conduct a public meeting at least thirty days before the charter school operator opens a site or sites for the charter school. The charter school operator shall post notices of the public meeting in at least three different locations that are within three hundred feet of the proposed charter school site.

8. A person who is employed by a charter school or who is an applicant for employment with a charter school, who is arrested for or charged with a nonappealable offense listed in section 41‑1758.03, subsection B and who does not immediately report the arrest or charge to the person's supervisor or potential employer is guilty of unprofessional conduct and the person shall be immediately dismissed from employment with the charter school or immediately excluded from potential employment with the charter school.

9. A person who is employed by a charter school and who is convicted of any nonappealable offense listed in section 41‑1758.03, subsection B or is convicted of any nonappealable offense that amounts to unprofessional conduct under section 15‑550 shall immediately do all of the following:

(a) Surrender any certificates issued by the department of education.

(b) Notify the person's employer or potential employer of the conviction.

(d) Surrender the person's fingerprint clearance card.

D. An entity that is authorized to sponsor charter schools pursuant to this article has no legal authority over or responsibility for a charter school sponsored by a different entity.� This subsection does not apply to the state board of education's duty to exercise general supervision over the public school system pursuant to section 15‑203, subsection A, paragraph 1.

E. The charter of a charter school shall do all of the following:

1. Ensure compliance with federal, state and local rules, regulations and statutes relating to health, safety, civil rights and insurance. The department of education shall publish a list of relevant rules, regulations and statutes to notify charter schools of their responsibilities under this paragraph.

2. Ensure that it is nonsectarian in its programs, admission policies and employment practices and all other operations.

3. Ensure that it provides a comprehensive program of instruction for at least a kindergarten program or any grade between grades one and twelve, except that a school may offer this curriculum with an emphasis on a specific learning philosophy or style or certain subject areas such as mathematics, science, fine arts, performance arts or foreign language.

4. Ensure that it designs a method to measure pupil progress toward the pupil outcomes adopted by the state board of education pursuant to section 15‑741.01, including participation in the Arizona instrument to measure standards test and the nationally standardized norm‑referenced achievement test as designated by the state board and the completion and distribution of an annual report card as prescribed in chapter 7, article 3 of this title.

5. Ensure that, except as provided in this article and in its charter, it is exempt from all statutes and rules relating to schools, governing boards and school districts.

6. Ensure that, except as provided in this article, it is subject to the same financial and electronic data submission requirements as a school district, including the uniform system of financial records as prescribed in chapter 2, article 4 of this title, procurement rules as prescribed in section 15‑213 and audit requirements.� The auditor general shall conduct a comprehensive review and revision of the uniform system of financial records to ensure that the provisions of the uniform system of financial records that relate to charter schools are in accordance with commonly accepted accounting principles used by private business. A school's charter may include exceptions to the requirements of this paragraph that are necessary as determined by the district governing board, the state board of education or the state board for charter schools.� The department of education or the office of the auditor general may conduct financial, program or compliance audits.

7. Ensure compliance with all federal and state laws relating to the education of children with disabilities in the same manner as a school district.

8. Ensure that it provides for a governing body for the charter school that is responsible for the policy decisions of the charter school.� Notwithstanding section 1‑216, if there is a vacancy or vacancies on the governing body, a majority of the remaining members of the governing body constitute a quorum for the transaction of business, unless that quorum is prohibited by the charter school's operating agreement.

9. Ensure that it provides a minimum of one hundred eighty instructional days before June 30 of each fiscal year unless it is operating on an alternative calendar approved by its sponsor. The superintendent of public instruction shall adjust the apportionment schedule accordingly to accommodate a charter school utilizing an alternative calendar.

F. A charter school shall keep on file the resumes of all current and former employees who provide instruction to pupils at the charter school. Resumes shall include an individual's educational and teaching background and experience in a particular academic content subject area.� A charter school shall inform parents and guardians of the availability of the resume information and shall make the resume information available for inspection on request of parents and guardians of pupils enrolled at the charter school.� This subsection does not require any charter school to release personally identifiable information in relation to any teacher or employee, including the teacher's or employee's address, salary, social security number or telephone number.

G. The charter of a charter school may be amended at the request of the governing body of the charter school and on the approval of the sponsor.

H. Charter schools may contract, sue and be sued.

I. The charter is effective for fifteen years from the first day of the fiscal year as specified in the charter, subject to the following:

1. At least eighteen months before the expiration of the charter, the sponsor shall notify the charter school that the charter school may apply for renewal and shall make the renewal application available to the charter school. A charter school that elects to apply for renewal shall file a complete renewal application at least fifteen months before the expiration of the charter.� A sponsor shall give written notice of its intent not to renew the charter school's request for renewal to the charter school at least twelve months before the expiration of the charter.� The sponsor shall make data used in making renewal decisions available to the school and the public and shall provide a public report summarizing the evidence basis for each decision.� The sponsor may deny the request for renewal if, in its judgment, the charter holder has failed to do any of the following:

(a) Meet or make sufficient progress toward the academic performance expectations set forth in the performance framework.

(b) Meet the operational performance expectations set forth in the performance framework or any improvement plans.

(d) Comply with this article or any provision of law from which the charter school is not exempt.

2. A charter operator may apply for early renewal. At least nine months before the charter school's intended renewal consideration, the operator of the charter school shall submit a letter of intent to the sponsor to apply for early renewal. The sponsor shall review fiscal audits and academic performance data for the charter school that are annually collected by the sponsor, review the current contract between the sponsor and the charter school and provide the qualifying charter school with a renewal application.� On submission of a complete application, the sponsor shall give written notice of its consideration of the renewal application.� The sponsor may deny the request for early renewal if, in the sponsor's judgment, the charter holder has failed to do any of the following:

(a) Meet or make sufficient progress toward the academic performance expectations set forth in the performance framework.

(b) Meet the operational performance expectations set forth in the performance framework or any improvement plans.

(d) Comply with this article or any provision of law from which the charter school is not exempt.

3. A sponsor shall review a charter at five‑year intervals using a performance framework adopted by the sponsor and may revoke a charter at any time if the charter school breaches one or more provisions of its charter or if the sponsor determines that the charter holder has failed to do any of the following:

(a) Meet or make sufficient progress toward the academic performance expectations set forth in the performance framework.

(b) Meet the operational performance expectations set forth in the performance framework or any improvement plans.

4. At least sixty days before the effective date of the proposed revocation, the sponsor shall give written notice to the operator of the charter school of its intent to revoke the charter. Notice of the sponsor's intent to revoke the charter shall be delivered personally to the operator of the charter school or sent by certified mail, return receipt requested, to the address of the charter school. The notice shall incorporate a statement of reasons for the proposed revocation of the charter.� The sponsor shall allow the charter school at least sixty days to correct the problems associated with the reasons for the proposed revocation of the charter. The final determination of whether to revoke the charter shall be made at a public hearing called for such purpose.

J. The charter may be renewed for successive periods of twenty years.

K. A charter school that is sponsored by the state board of education, the state board for charter schools, a university, a community college district or a group of community college districts may not be located on the property of a school district unless the district governing board grants this authority.

L. A governing board or a school district employee who has control over personnel actions shall not take unlawful reprisal against another employee of the school district because the employee is directly or indirectly involved in an application to establish a charter school. A governing board or a school district employee shall not take unlawful reprisal against an educational program of the school or the school district because an application to establish a charter school proposes the conversion of all or a portion of the educational program to a charter school.� For the purposes of this subsection, "unlawful reprisal" means an action that is taken by a governing board or a school district employee as a direct result of a lawful application to establish a charter school and that is adverse to another employee or an education program and:

1. With respect to a school district employee, results in one or more of the following:

(a) Disciplinary or corrective action.

(b) Detail, transfer or reassignment.

(d) An unfavorable performance evaluation.

(e) A reduction in pay, benefits or awards.

(f) Elimination of the employee's position without a reduction in force by reason of lack of monies or work.

(g) Other significant changes in duties or responsibilities that are inconsistent with the employee's salary or employment classification.

2. With respect to an educational program, results in one or more of the following:

(a) Suspension or termination of the program.

(b) Transfer or reassignment of the program to a less favorable department.

(d) Significant reduction or termination of funding for the program.

M. Charter schools shall secure insurance for liability and property loss.� The governing body of a charter school that is sponsored by the state board of education or the state board for charter schools may enter into an intergovernmental agreement or otherwise contract to participate in an insurance program offered by a risk retention pool established pursuant to section 11‑952.01 or 41‑621.01 or the charter school may secure its own insurance coverage. The pool may charge the requesting charter school reasonable fees for any services it performs in connection with the insurance program.

N. Charter schools do not have the authority to acquire property by eminent domain.

O. A sponsor, including members, officers and employees of the sponsor, is immune from personal liability for all acts done and actions taken in good faith within the scope of its authority.

P. Charter school sponsors and this state are not liable for the debts or financial obligations of a charter school or persons who operate charter schools.

Q. The sponsor of a charter school shall establish procedures to conduct administrative hearings on determination by the sponsor that grounds exist to revoke a charter.� Procedures for administrative hearings shall be similar to procedures prescribed for adjudicative proceedings in title 41, chapter 6, article 10.� Except as provided in section 41‑1092.08, subsection H, final decisions of the state board of education and the state board for charter schools from hearings conducted pursuant to this subsection are subject to judicial review pursuant to title 12, chapter 7, article 6.

R. The sponsoring entity of a charter school shall have oversight and administrative responsibility for the charter schools that it sponsors. In implementing its oversight and administrative responsibilities, the sponsor shall ground its actions in evidence of the charter holder's performance in accordance with the performance framework adopted by the sponsor. The performance framework shall be publicly available, shall be placed on the sponsoring entity's website and shall include:

1. The academic performance expectations of the charter school and the measurement of sufficient progress toward the academic performance expectations.

2. The operational expectations of the charter school, including adherence to all applicable laws and obligations of the charter contract.

3. Intervention and improvement policies.

S. Charter schools may pledge, assign or encumber their assets to be used as collateral for loans or extensions of credit.

T. All property accumulated by a charter school shall remain the property of the charter school.

U. Charter schools may not locate a school on property that is less than one‑fourth mile from agricultural land regulated pursuant to section 3‑365, except that the owner of the agricultural land may agree to comply with the buffer zone requirements of section 3‑365.� If the owner agrees in writing to comply with the buffer zone requirements and records the agreement in the office of the county recorder as a restrictive covenant running with the title to the land, the charter school may locate a school within the affected buffer zone.� The agreement may include any stipulations regarding the charter school, including conditions for future expansion of the school and changes in the operational status of the school that will result in a breach of the agreement.

V. A transfer of a charter to another sponsor, a transfer of a charter school site to another sponsor or a transfer of a charter school site to a different charter shall be completed before the beginning of the fiscal year that the transfer is scheduled to become effective.� An entity that sponsors charter schools may accept a transferring school after the beginning of the fiscal year if the transfer is approved by the superintendent of public instruction. The superintendent of public instruction shall have the discretion to consider each transfer during the fiscal year on a case by case basis. If a charter school is sponsored by a school district that is determined to be out of compliance with this title, the uniform system of financial records or any other state or federal law, the charter school may transfer to another sponsoring entity at any time during the fiscal year.� A charter holder seeking to transfer sponsors shall comply with the current charter terms regarding assignment of the charter. A charter holder transferring sponsors shall notify the current sponsor that the transfer has been approved by the new sponsor.

W. Notwithstanding subsection V of this section, a charter holder on an improvement plan must notify parents or guardians of registered students of the intent to transfer the charter and the timing of the proposed transfer. On the approved transfer, the new sponsor shall enforce the improvement plan but may modify the plan based on performance.

X. Notwithstanding subsection Y of this section, the state board for charter schools shall charge a processing fee to any charter school that amends its contract to participate in Arizona online instruction pursuant to section 15‑808.� The charter Arizona online instruction processing fund is established consisting of fees collected and administered by the state board for charter schools.� The state board for charter schools shall use monies in the fund only for the processing of contract amendments for charter schools participating in Arizona online instruction. Monies in the fund are continuously appropriated.

Y. The sponsoring entity may not charge any fees to a charter school that it sponsors unless the sponsor has provided services to the charter school and the fees represent the full value of those services provided by the sponsor.� On request, the value of the services provided by the sponsor to the charter school shall be demonstrated to the department of education.

Z. Charter schools may enter into an intergovernmental agreement with a presiding judge of the juvenile court to implement a law related education program as defined in section 15‑154.� The presiding judge of the juvenile court may assign juvenile probation officers to participate in a law related education program in any charter school in the county.� The cost of juvenile probation officers who participate in the program implemented pursuant to this subsection shall be funded by the charter school.

AA. The sponsor of a charter school shall modify previously approved curriculum requirements for a charter school that wishes to participate in the board examination system prescribed in chapter 7, article 6 of this title.

BB. If a charter school decides not to participate in the board examination system prescribed in chapter 7, article 6 of this title, pupils enrolled at that charter school may earn a Grand Canyon diploma by obtaining a passing score on the same board examinations.

CC. Notwithstanding subsection Y of this section, a sponsor of charter schools may charge a new charter application processing fee to any applicant. The application fee shall fully cover the cost of application review and any needed technical assistance.� Authorizers may approve policies that allow a portion of the fee to be returned to the applicant whose charter is approved.

DD. A charter school may choose to provide a preschool program for children with disabilities pursuant to section 15‑771. END_STATUTE

Sec. 3. Section 15-211, Arizona Revised Statutes, is amended to read:

START_STATUTE15-211. K-3 reading program; receipt and use of monies; additional funding; program termination

A. The state board of education, in collaboration with the department of education, shall establish a K‑3 reading program to improve the reading proficiency of pupils in kindergarten programs and grades one, two and three in the public schools of this state.

B. On or before October 1, 2012, each school district and charter school shall submit to the state board of education a plan for improving the reading proficiency of its pupils in kindergarten programs and grades one, two and three. The plan shall include baseline data on the reading proficiency of its pupils in kindergarten programs and grades one, two and three and a budget for spending monies from both the K‑3 support level weight and the K‑3 reading support level weight established in section 15‑943.� Beginning in fiscal year 2013‑2014 and each fiscal year thereafter, each school district and charter school shall submit to the state board of education on or before October 1 an updated K‑3 reading program plan that includes data on program expenditures and results.

C. School districts and charter schools shall use monies generated by the K‑3 reading support level weight established in section 15‑943 only on reading programs for pupils in kindergarten programs and grades one, two and three with particular emphasis on pupils in kindergarten programs and grades one and two.

D. Each school district and charter school that is assigned a letter grade of C, D or F pursuant to section 15‑241, subsection H or that has more than ten per cent of its pupils in grade three reading far below the third grade level according to the reading portion of the Arizona instrument to measure standards test, or a successor test, shall receive monies generated by the K‑3 reading support level weight established in section 15‑943 only after the K‑3 reading program plan of the school district or charter school has been approved by the state board of education.

E. The department of education shall solicit gifts, grants and donations from any lawful public or private source in order to provide additional funding for the K‑3 reading program.

F. The program established by this section ends on July 1, 2022 pursuant to section 41‑3102. END_STATUTE

Sec. 4. Section 15-241, Arizona Revised Statutes, is amended to read:

START_STATUTE15-241. School and school district accountability; failing schools tutoring fund; classification label for school districts and charter school operators

A. The department of education shall compile an annual achievement profile for each public school and school district.

B. Each school and school district shall submit to the department any data that is required and requested and that is necessary to compile the achievement profile.� A school or school district that fails to submit the information that is necessary is not eligible to receive monies from the classroom site fund established by section 15‑977.

C. The department shall establish a baseline achievement profile for each school and school district.� The baseline achievement profile shall be used to determine a standard measurement of acceptable academic progress for each school and school district and a school and school district classification pursuant to subsection H of this section. Any disclosure of educational records compiled by the department of education pursuant to this section shall comply with the family educational rights and privacy act of 1974 (20 United States Code section 1232g).

D. The achievement profile for schools and school districts that offer instruction in kindergarten programs and grades one through eight, or any combination of those programs or grades, shall include the following school academic performance indicators:

1. The Arizona measure of academic progress. The department shall compute the extent of academic progress made by the pupils in each school and school district during the course of each year.

2. The Arizona instrument to measure standards test.� The department shall compute the percentage of pupils who meet or exceed the standard on the Arizona instrument to measure standards test, as prescribed by the state board of education. The superintendent of public instruction and the department may calculate academic gain on the Arizona instrument to measure standards test according to each of the school classifications prescribed in subsection G of this section on a statewide basis, for each school district in this state and for each school by determining the average scale scores for students in the current academic year as compared to the average scale scores for the previous academic year for the same students.

3. The results of English language learners tests administered pursuant to section 15‑756, subsection B, section 15‑756.05 and section 15‑756.06.

E. The achievement profile for schools and school districts that offer instruction in grades nine through twelve, or any combination of those grades, shall include the following school academic performance indicators:

1. The Arizona measure of academic progress. The department shall compute the extent of academic progress made by the pupils at each school.

2. The Arizona instrument to measure standards test. The department shall compute the percentage of pupils pursuant to subsection G of this section who meet or exceed the standard on the Arizona instrument to measure standards test, as prescribed by the state board of education. The superintendent of public instruction and the department may calculate academic gain on the Arizona instrument to measure standards test according to each of the school classifications prescribed in subsection G of this section on a statewide basis, for each school district in this state and for each school by determining the average scale scores for students in the current academic year as compared to the average scale scores for the previous academic year for the same students.

3. The annual dropout rate.

4. The annual graduation rate.

5. The results of English language learners tests administered pursuant to section 15‑756, subsection B, section 15‑756.05 and section 15‑756.06.

F. Schools and school districts that offer instruction in all or a combination of the grades specified in subsections D and E of this section shall include a single achievement profile for that school and school district that includes the school academic performance indicators specified in subsections D and E of this section.

G. Subject to final adoption by the state board of education, the department shall determine the criteria for each school and school district classification using a research based methodology. The methodology shall include the performance of pupils at all achievement levels, account for pupil mobility, account for the distribution of pupil achievement at each school and school district and include longitudinal indicators of academic performance. Fifty per cent of the school and school district classification determination shall consist of academic performance measurements.� Fifty per cent of the academic performance measurement shall consist of a measurement of academic gain for all pupils enrolled at the school or school district and fifty per cent of the academic performance measurements shall consist of a measurement of the twenty-five per cent of pupils with the lowest academic performance measurement enrolled at the school or school district. For the purposes of this subsection, "research based methodology" means the systematic and objective application of statistical and quantitative research principles to determine a standard measurement of acceptable academic progress for each school and school district.

H. Except as provided in subsection EE of this section, the achievement profile shall be used to determine a school and school district classification that uses a letter grade system as follows:

1. A school or school district assigned a letter grade of A shall demonstrate an excellent level of performance.

2. A school or school district assigned a letter grade of B shall demonstrate an above average level of performance.

3. A school or school district assigned a letter grade of C shall demonstrate an average level of performance.

4. A school or school district assigned a letter grade of D shall demonstrate a below average level of performance.

5. A school or school district assigned a letter grade of F shall demonstrate a failing level of performance.� The state board of education may also assign a school a letter grade of F if the state board of education determines that the school is among the "persistently lowest-achieving schools" in the state under the federal school accountability requirements pursuant to section 1003(g) of the elementary and secondary education act (20 United States Code section 6303).

I. The classification for each school and the criteria used to determine classification pursuant to subsection G of this section shall be included on the school report card prescribed in section 15‑746.

J. Subject to final adoption by the state board of education, the department of education shall develop a parallel achievement profile for accommodation schools, alternative schools as defined by the state board of education and extremely small schools as defined by the state board of education for the purposes of this section.

K. If a school is assigned a letter grade of D, within ninety days after receiving notice of the designation, the governing board shall develop an improvement plan for the school, submit a copy of the plan to the superintendent of public instruction and the county educational service agency and supervise the implementation of the plan. The plan shall include necessary components as identified by the state board of education. Within thirty days after submitting the improvement plan to the superintendent of public instruction and the county educational service agency, the governing board shall hold a special public meeting in each school that has been assigned a letter grade of D and shall present the respective improvement plans that have been developed for each school. The school district governing board, within thirty days of receiving notice of the designation, shall provide written notification of the classification to each residence within the attendance area of the school. The notice shall explain the improvement plan process and provide information regarding the public meeting required by this subsection.

L. A school that has not submitted an improvement plan pursuant to subsection K of this section is not eligible to receive monies from the classroom site fund established by section 15‑977 for every day that a plan has not been received by the superintendent of public instruction within the time specified in subsection K of this section plus an additional ninety days. The state board of education shall require the superintendent of the school district to testify before the board and explain the reasons that an improvement plan for that school has not been submitted.

M. If a charter school is assigned a letter grade of D, within thirty days the school shall notify the parents of the students attending the school of the classification. The notice shall explain the improvement plan process and provide information regarding the public meeting required by this subsection. Within ninety days of receiving the classification, the charter holder shall present an improvement plan to the charter sponsor at a public meeting and submit a copy of the plan to the superintendent of public instruction. The improvement plan shall include necessary components as identified by the state board of education. For every day that an improvement plan is not received by the superintendent of public instruction and the county educational service agency, the school is not eligible to receive monies from the classroom site fund established by section 15‑977 for every day that a plan has not been received by the superintendent of public instruction within the time specified in subsection K of this section plus an additional ninety days. The charter holder shall appear before the sponsoring board and explain why the improvement plan has not been submitted.

N. The department of education shall establish an appeals process, to be approved by the state board of education, for a school to appeal data used to determine the achievement profile of the school.� The criteria established shall be based on mitigating factors and may include a visit to the school site by the department of education.

O. If a school is assigned a letter grade of D for a third consecutive year, the department of education shall visit the school site to confirm the classification data and to review the implementation of the school's improvement plan.� The school shall be assigned a letter grade of F unless an alternate letter grade is assigned after an appeal pursuant to subsection N of this section.� A school that is assigned a letter grade of D for less than three consecutive years may also be assigned a letter grade of F if the state board of education determines that there is no reasonable likelihood that the school will achieve an average level of performance within the next two years.

P. The school district governing board, within thirty days of receiving notice of the school being assigned a letter grade of F, shall provide written notification of the classification to each residence in the attendance area of the school. The notice shall explain the improvement plan process and provide information regarding the public meeting required by subsection S of this section.

Q. The superintendent of public instruction in collaboration with the county educational service agency, based on need, shall assign a solutions team to a school assigned a letter grade of D, a school assigned a letter grade of F or any other school pursuant to a mutual agreement between the department of education and the school composed of master teachers, fiscal analysts and curriculum assessment experts who are certified by the state board of education as Arizona academic standards technicians. The department of education or the county educational service agency may hire or contract with administrators, principals and teachers who have demonstrated experience with the characteristics and situations in a school assigned a letter grade of D or F and may use these personnel as part of the solutions team. The department of education shall work with staff at the school to assist in curricula alignment and shall instruct teachers on how to increase pupil academic progress, considering the school's achievement profile. The solutions team shall consider the existing improvement plan to assess the need for changes to curriculum, professional development and resource allocation and shall present a statement of its findings to the school administrator and district superintendent. Within forty‑five days after the presentation of the solutions team's statement of findings, the school district governing board, in cooperation with each school within the school district that is assigned a letter grade of D and its assigned solutions team representative, shall develop and submit to the department of education and the county educational service agency an action plan that details the manner in which the school district will assist the school as the school incorporates the findings of the solutions team into the improvement plan.� The department of education shall review the action plan and shall either accept the action plan or return the action plan to the school district for modification. If the school district does not submit an approved action plan within forty‑five days, the state board of education may direct the superintendent of public instruction to withhold up to ten per cent of state monies that the school district would otherwise be entitled to receive each month until the plan is submitted to the department of education and the county educational service agency, at which time those monies shall be returned to the school district.

R. The parent or the guardian of the pupil may apply to the department of education, in a manner determined by the department of education, for a certificate of supplemental instruction from the failing schools tutoring fund established by this section.� Pupils attending a school assigned a letter grade of D or F or a pupil who has failed to pass one or more portions of the Arizona instrument to measure standards test in grades eight through twelve in order to graduate from high school may select an alternative tutoring program in academic standards from a provider that is certified by the state board of education.� To qualify, the provider must state in writing a level of academic improvement for the pupil that includes a timeline for improvement that is agreed to by the parent or guardian of the pupil. The state board of education shall annually review academic performance levels for providers certified pursuant to this subsection and may remove a provider at a public hearing from an approved list of providers if that provider fails to meet its stated level of academic improvement. The state board of education shall determine the application guidelines and the maximum value for each certificate of supplemental instruction. The state board of education shall annually complete a market survey in order to determine the maximum value for each certificate of supplemental instruction. This subsection shall not be construed to require the state to provide additional monies beyond the monies provided pursuant to section 42‑5029, subsection E, paragraph 7.

S. Within sixty days of receiving notification of a school being assigned a letter grade of F, the school district governing board shall evaluate needed changes to the existing improvement plan for the school, consider recommendations from the solutions team, submit a copy of the plan to the superintendent of public instruction and the county educational service agency and supervise the implementation of the plan. Within thirty days after submitting the improvement plan to the superintendent of public instruction, the governing board shall hold a public meeting in each school that has been assigned a letter grade of F and shall present the respective improvement plans that have been developed for each school.

T. A school that has not submitted an improvement plan pursuant to subsection S of this section is not eligible to receive monies from the classroom site fund established by section 15‑977 for every day that a plan has not been received by the superintendent of public instruction within the time specified in subsection S of this section plus an additional ninety days.� The state board of education shall require the superintendent of the school district to testify before the board and explain the reasons that an improvement plan for that school has not been submitted.

U. If a charter school is assigned a letter grade of F, the department of education shall immediately notify the charter school's sponsor. The charter school's sponsor shall either take action to restore the charter school to acceptable performance or revoke the charter school's charter.� Within thirty days the school shall notify the parents of the students attending the school of the classification and of any pending public meetings to review the issue.

V. A school that has been assigned a letter grade of F shall be evaluated by the department of education to determine if the school failed to properly implement its school improvement plan, align the curriculum with academic standards, provide teacher training, prioritize the budget or implement other proven strategies to improve academic performance.� After visiting the school site pursuant to subsection O of this section, the department of education shall submit to the state board of education a recommendation to proceed pursuant to subsections Q, R and S of this section or that the school be subject to a public hearing to determine if the school failed to properly implement its improvement plan and the reasons for the department's recommendation.

W. If the department does recommend a public hearing, the state board of education shall meet and may provide by a majority vote at the public hearing for the continued operation of the school as allowed by this subsection. The state board of education shall determine whether governmental, nonprofit and private organizations may submit applications to the state board to fully or partially manage the school.� The state board's determination shall include:

1. If and to what extent the local governing board may participate in the operation of the school including personnel matters.

2. If and to what extent the state board of education shall participate in the operation of the school.

3. Resource allocation pursuant to subsection Y of this section.

4. Provisions for the development and submittal of a school improvement plan to be presented in a public meeting at the school.

5. A suggested time frame for the alternative operation of the school.

X. The state board shall periodically review the status of a school that is operated by an organization other than the school district governing board to determine whether the operation of the school should be returned to the school district governing board. Before the state board makes a determination, the state board or its designee shall meet with the school district governing board or its designee to determine the time frame, operational considerations and the appropriate continuation of existing improvements that are necessary to assure a smooth transition of authority from the other organization back to the school district governing board.

Y. If an alternative operation plan is provided pursuant to subsection W of this section, the state board of education shall pay for the operation of the school and shall adjust the school district's district additional assistance pursuant to section 15‑961, base support level pursuant to section 15‑943, monies distributed from the classroom site fund established by section 15‑977 and transportation support level pursuant to section 15‑945 to accurately reflect any reduction in district services that are no longer provided to that school by the district. The state board of education may modify the school district's revenue control limit, the district support level and the general budget limit calculated pursuant to section 15‑947 by an amount that corresponds to this reduction in services.� The state board of education shall retain the portion of state aid that would otherwise be due the school district for the school and shall distribute that portion of state aid directly to the organization that contracts with the state board of education to operate the school.

Z. If the state board of education determines that a charter school failed to properly implement its improvement plan, the sponsor of the charter school shall revoke the charter school's charter.

AA. If there are more than two schools in a district and more than one‑half, or in any case more than five, of the schools in the district are assigned a letter grade of F for more than two consecutive years, in the next election of members of the governing board the election ballot shall contain the following statement immediately above the listing of governing board candidates:

Within the last five years, (number of schools) schools in the ________ school district have been assigned a letter grade of F or designated as "schools failing to meet academic standards" by the superintendent of public instruction.

BB. At least twice each year the department of education shall publish in a newspaper of general circulation in each county of this state a list of schools that are assigned a letter grade of F.

CC. The failing schools tutoring fund is established consisting of monies collected pursuant to section 42‑5029, subsection E as designated for this purpose.� The department of education shall administer the fund. The department of education may use monies from the fund to purchase materials designed to assist students to meet the Arizona academic standards and to achieve a passing score on the Arizona instrument to measure standards test in order to graduate from high school.

DD. The department of education may develop a classification label for school districts and charter school operators. If the department of education develops a classification label for school districts and charter school operators, the classification label may be developed from the following components:

1. Measures of academic progress.

2. Pupil assessment data.

3. The attendance rates and graduation rates of pupils who are educated in that charter school operator's charter schools or in that school district's schools.

4. The percentage of the parents of pupils enrolled in that charter school operator's charter schools or in that school district's schools that categorizes the quality of their child's education as excellent on a parental rating of school quality.

EE. The state board of education shall determine appropriate modifications to the criteria used to calculate achievement profiles for schools that participate in the board examination system prescribed in chapter 7, article 6 of this title.

FF. The state board of education shall adopt guidelines to include supplementary training in reading instruction for teachers who provide instruction to pupils in a kindergarten program or grade one, two or three in an improvement plan pursuant to subsection K of this section.

GG. In addition to any other corrective procedures prescribed in this section and section 15‑241.01, a school that has been assigned a letter grade of D or F for two consecutive years shall implement a science, technology, engineering and mathematics intervention strategy under the supervision of the state board of education.

HH. In addition to any other corrective procedures prescribed in this section a school district that has been assigned a letter grade of D or F for two consecutive years shall implement a parent involvement strategy.� The parent involvement strategy shall be included in the school improvement plan for each applicable school within the district, as prescribed in subsection K of this section.

II. The department of education shall publish criteria for a school or school district's exit status from a previous assignment of a letter grade of F in accordance with this section.� The criteria shall prescribe the actions and results necessary to be deemed to have complied with this section regarding school improvement, including the proper implementation of a school improvement plan pursuant to subsection V of this section.� These criteria shall be provided to a school or school district if it is assigned a letter grade of F pursuant to this section. END_STATUTE

Sec. 5. Section 15-701, Arizona Revised Statutes, is amended to read:

START_STATUTE15-701. Common schools; promotions; competency requirements; certificate; supervision of eighth grades by superintendent of high school district; high school admissions; academic credit

A. The state board of education shall:

1. Prescribe a minimum course of study, as defined in section 15‑101, and incorporating the academic standards adopted by the state board of education, to be taught in the common schools.

2. Prescribe competency requirements for the promotion of pupils from the eighth grade and competency requirements for the promotion of pupils from the third grade incorporating the academic standards in at least the areas of reading, writing, mathematics, science and social studies.� Notwithstanding section 15‑521, paragraph 3 4, the competency requirements for the promotion of pupils from the third grade shall include the following:

(a) A requirement that a pupil not be promoted from the third grade if the pupil obtains a score on the reading portion of the Arizona instrument to measure standards test, or a successor test, that demonstrates that the pupil's reading falls far below the third grade level.�

(b) A mechanism to allow a school district governing board or the governing body of a charter school to promote a pupil from the third grade who obtains a score on the reading portion of the Arizona instrument to measure standards test, or a successor test, that demonstrates that the pupil's reading falls far below the third grade level for any of the following:

(i) A good cause exemption if the pupil is an English learner or a limited English proficient student as defined in section 15‑751 and has had fewer than two years of English language instruction.

(ii) A pupil who is a child with a disability as defined in section 15‑761 if the pupil's individualized education program team and the pupil's parent or guardian agrees agree that promotion is appropriate based on the pupil's individualized education program.

(c) Intervention and remedial strategies developed by the state board of education for pupils who are not promoted from the third grade.� A school district governing board or the governing body of a charter school shall offer at least one of the intervention and remedial strategies developed by the state board of education.� The parent or guardian of a pupil who is not promoted from the third grade and the pupil's teacher and principal may choose the most appropriate intervention and remedial strategies that will be provided to that pupil.� The intervention and remedial strategies developed by the state board of education shall include:

(i) A requirement that the pupil be assigned to a different teacher for reading instruction.

(ii) Summer school reading instruction.

(iii) In the next academic year, intensive reading instruction that occurs before, during or after the regular school day, or any combination of before, during and after the regular school day.

(iv) Online reading instruction.

3. Provide for universal screening of pupils in preschool programs, kindergarten programs and grades one through three that is designed to identify pupils who have reading deficiencies pursuant to section 15‑704.

4. Develop intervention and remedial strategies pursuant to paragraph 2, subdivision (c) of this subsection for pupils in kindergarten programs and grades one through three who are identified as having reading deficiencies pursuant to section 15‑704.

5. Distribute guidelines for the school districts to follow in prescribing criteria for the promotion of pupils from grade to grade in the common schools. These guidelines shall include recommended procedures for ensuring that the cultural background of a pupil is taken into consideration when criteria for promotion are being applied.

B. Beginning in the 2010‑2011 school year, School districts and charter schools shall provide annual written notification to parents of pupils in kindergarten programs and first, second and third grades that a pupil who obtains a score on the reading portion of the Arizona instrument to measure standards test, or a successor test, that demonstrates the pupil is reading far below the third grade level will not be promoted from the third grade. If the school has determined that the pupil is substantially deficient in reading before the end of grade three, the school district or charter school shall provide to the parent of that pupil a separate written notification of the reading deficiency that includes the following information:

1. A description of the current reading services provided to the pupil.

2. A description of the available supplemental instructional services and supporting programs that are designed to remediate reading deficiencies. Each school district or charter school shall offer at least one intervention strategy and at least one remedial strategy for pupils with reading deficiencies. The notification shall list the intervention and remedial strategies offered and shall instruct the parent or guardian to choose the strategy that will be implemented for that child.

3. Parental strategies to assist the pupil to attain reading proficiency.

4. A statement that the pupil will not be promoted from the third grade if the pupil obtains a score on the reading portion of the Arizona instrument to measure standards test, or a successor test, that demonstrates the pupil is reading far below the third grade level, unless the pupil is exempt from mandatory retention in grade three or the pupil qualifies for an exemption pursuant to subsection A of this section.

5. A description of the school district or charter school policies on midyear promotion to a higher grade.

C. Pursuant to the guidelines that the state board of education distributes, the governing board of a school district shall:

1. Prescribe curricula that include the academic standards in the required subject areas pursuant to subsection A, paragraph 1 of this section.

2. Prescribe criteria for the promotion of pupils from grade to grade in the common schools in the school district. These criteria shall include accomplishment of the academic standards in at least reading, writing, mathematics, science and social studies, as determined by district assessment. Other criteria may include additional measures of academic achievement and attendance.

D. The governing board of a school district or the governing body of a charter school may prescribe the course of study and competency requirements for promotion that are in addition to or higher than the course of study and competency requirements the state board prescribes, except that the school district governing board or the charter school governing body may opt out of any competency requirement or assessment adopted by the state board of education.� A school district governing board that opts out pursuant to this subsection shall adopt academic standards or assessments, or both, that are approved or have been previously approved by the state board of education.� A charter school governing body that opts out pursuant to this subsection shall adopt academic standards or assessments, or both, that are approved by the sponsor of the charter school.� The department of education or the sponsor of a charter school, as appropriate, shall approve the standards or assessments adopted by the school district or charter school if the standards or assessments meet or exceed the standards adopted by the state board of education for use during or after the 1998‑1999 school year.� The department shall develop mechanisms to compare the academic performance of pupils who are enrolled in school districts and charter schools that opt out pursuant to this subsection with the academic performance of pupils who are enrolled in school districts and charter schools that do not opt out pursuant to this subsection.� The sponsor of a charter school that opts out pursuant to this subsection shall use the comparison mechanisms developed by the department pursuant to this subsection to determine whether the standards or assessments, or both, that are adopted by the charter school it sponsors are appropriate.� School districts and charter schools that opt out pursuant to this subsection:

1. Are not subject to any financial penalty.

2. Shall administer an annual assessment to measure the extent to which pupils have met the adopted academic standards.

E. A teacher shall determine whether to promote or retain a pupil in grade in a common school as provided in section 15‑521, paragraph 3 4 on the basis of the prescribed criteria. The governing board, if it reviews the decision of a teacher to promote or retain a pupil in grade in a common school as provided in section 15‑342, paragraph 11, shall base its decision on the prescribed criteria.

F. A governing board may provide and issue certificates of promotion to pupils whom it promotes from the eighth grade of a common school.� Such certificates shall be signed by the principal or superintendent of schools.� Where there is no principal or superintendent of schools, the certificates shall be signed by the teacher of an eighth grade. The certificates shall admit the holders to any high school in the state.

G. A governing board may request certificates of promotion from the county school superintendent. If a governing board requests these certificates from the county school superintendent, the county school superintendent shall furnish and sign the certificates.

H. Within any high school district or union high school district, the superintendent of the high school district shall supervise the work of the eighth grade of all schools employing no superintendent or principal.

I. A school district shall not deny a pupil who is between the ages of sixteen and twenty‑one years admission to a high school because the pupil does not hold an eighth grade certificate. Governing boards shall establish procedures for determining the admissibility of pupils who are under sixteen years of age and who do not hold eighth grade certificates.

J. The state board of education shall adopt rules to allow common school pupils who can demonstrate competency in a particular academic course or subject to obtain academic credit for the course or subject without enrolling in the course or subject. END_STATUTE

Sec. 6. Section 15-701.01, Arizona Revised Statutes, is amended to read:

START_STATUTE15-701.01. High schools; graduation; competency requirements; community college or university courses; transfer from private schools; academic credit

A. The state board of education shall:

1. Prescribe a minimum course of study, as defined in section 15‑101, and incorporating the academic standards adopted by the state board of education, for the graduation of pupils from high school.

2. Prescribe competency requirements for the graduation of pupils from high school incorporating the academic standards in at least the areas of reading, writing, mathematics, science and social studies.� The academic standards prescribed by the state board of education in social studies shall include personal finance. This paragraph does not allow the state board of education to establish a required separate personal finance course for the purpose of the graduation of pupils from high school.

3. Develop and adopt competency tests pursuant to section 15‑741. English language learners who are subject to article 3.1 of this chapter are subject to the assessments prescribed in section 15‑741.

B. The governing board of a school district shall:

1. Prescribe curricula that include the academic standards in the required subject areas pursuant to subsection A, paragraph 1 of this section.

2. Prescribe criteria for the graduation of pupils from the high schools in the school district.� These criteria shall include accomplishment of the academic standards in at least reading, writing, mathematics, science and social studies, as determined by district assessment.� Other criteria may include additional measures of academic achievement and attendance.

C. The governing board may prescribe the course of study and competency requirements for the graduation of pupils from high school that are in addition to or higher than the course of study and competency requirements that the state board prescribes.

D. The governing board of a school district or the governing body of a charter school may prescribe competency requirements for the passage of pupils in courses that are required for graduation from high school, except that the school district GOVERNING board or the charter school governing body may opt out of any competency requirement or assessment adopted by the state board of education.� A school district governing board that opts out pursuant to this subsection Shall adopt academic standards or assessments, or both, that are approved or have been previously approved by the state board of education.� A charter school governing body that opts out pursuant to this subsection shall adopt ACADEMIC standards or assessments, or both, that are approved by the sponsor of the charter school.� The department of education or the sponsor of a charter school, as appropriate, shall approve the standards or assessments adopted by the school district or charter school if the standards or assessments meet or exceed the standards adopted by the state board of education for use during or after the 1998‑1999 school year.� The department shall develop mechanisms to compare the academic performance of pupils who are enrolled in school districts and charter schools that opt out pursuant to this subsection with the academic performance of pupils who are enrolled in school districts and charter schools that do not opt out pursuant to this subsection.� The sponsor of a charter school that opts out pursuant to this subsection shall use the comparison mechanisms developed by the department pursuant to this subsection to determine whether the standards or assessments, or both, that are adopted by the charter school it sponsors are appropriate.� School districts and charter schools that opt out pursuant to this subsection:

1. Are not subject to any financial penalty.

2. shall administer an annual assessment to measure the extent to which pupils have met the adopted academic standards.

E. A teacher shall determine whether to pass or fail a pupil in a course in high school as provided in section 15‑521, paragraph 4 on the basis of the competency requirements, if any have been prescribed. The governing board, if it reviews the decision of a teacher to pass or fail a pupil in a course in high school as provided in section 15‑342, paragraph 11, shall base its decision on the competency requirements, if any have been prescribed.

F. Graduation requirements established by the governing board may be met by a pupil who passes courses in the required or elective subjects at a community college or university, if the course is at a higher level than the course taught in the high school attended by the pupil or, if the course is not taught in the high school, the level of the course is equal to or higher than the level of a high school course. The governing board shall determine if the subject matter of the community college or university course is appropriate to the specific requirement the pupil intends it to fulfill and if the level of the community college or university course is less than, equal to or higher than a high school course, and the governing board shall award one‑half of a carnegie unit for each three semester hours of credit the pupil earns in an appropriate community college or university course. If a pupil is not satisfied with the decision of the governing board regarding the amount of credit granted or the subjects for which credit is granted, the pupil may request that the state board of education review the decision of the governing board, and the state board shall make the final determination of the amount of credit to be given the pupil and for which subjects. The governing board shall not limit the number of credits that is required for high school graduation and that may be met by taking community college or university courses.� For the purposes of this subsection:

1. "Community college" means an educational institution that is operated by a community college district as defined in section 15‑1401 or a postsecondary educational institution under the jurisdiction of an Indian tribe recognized by the United States department of the interior.

2. "University" means a university under the jurisdiction of the Arizona board of regents.

G. A pupil who transfers from a private school shall be provided with a list that indicates those credits that have been accepted and denied by the school district. A pupil may request to take an examination in each particular course in which credit has been denied.� The school district shall accept the credit for each particular course in which the pupil takes an examination and receives a passing score on a test designed and evaluated by a teacher in the school district who teaches the subject matter on which the examination is based.� In addition to the above requirements, the governing board of a school district may prescribe requirements for the acceptance of the credits of pupils who transfer from a private school.

H. If a pupil who was previously enrolled in a charter school or school district enrolls in a school district in this state, the school district shall accept credits earned by the pupil in courses or instructional programs at the charter school or school district.� The governing board of a school district may adopt a policy concerning the application of transfer credits for the purpose of determining whether a credit earned by a pupil who was previously enrolled in a school district or charter school will be assigned as an elective or core credit.

I. A pupil who transfers from a charter school or school district shall be provided with a list that indicates which credits have been accepted as an elective credit and which credits have been accepted as a core credit by the school district. Within ten school days after receiving the list, a pupil may request to take an examination in each particular course in which core credit has been denied.� The school district shall accept the credit as a core credit for each particular course in which the pupil takes an examination and receives a passing score on a test designed and evaluated by a teacher in the school district who teaches the subject matter on which the examination is based.

J. The state board of education shall adopt rules to allow high school pupils who can demonstrate competency in a particular academic course or subject to obtain academic credit for the course or subject without enrolling in the course or subject.

K. Pupils who earn a Grand Canyon diploma pursuant to article 6 of this chapter are exempt from the graduation requirements prescribed in this section. Pupils who earn a Grand Canyon diploma are entitled to all the rights and privileges of persons who graduate with a high school diploma issued pursuant to this section, including access to postsecondary scholarships and other forms of student financial aid and access to all forms of postsecondary education.� Notwithstanding any other law, a pupil who is eligible for a Grand Canyon diploma may elect to remain in high school through grade twelve and shall not be prevented from enrolling at a high school after the pupil becomes eligible for a Grand Canyon diploma. A pupil who is eligible for a Grand Canyon diploma and who elects not to pursue one of the options prescribed in section 15‑792.03 may only be readmitted to that high school or another high school in this state pursuant to policies adopted by the school district of readmission. END_STATUTE

Sec. 7. Section 15-704, Arizona Revised Statutes, is amended to read:

START_STATUTE15-704. Reading proficiency; definitions

A. Each school district or charter school that provides instruction in kindergarten programs and grades one through three shall select and administer screening, ongoing diagnostic and classroom based instructional reading assessments, including a motivational assessment, as defined by the state board of education, to monitor student progress.� Each school shall use the diagnostic information to plan appropriate and effective intervention.

B. Each school district or charter school that provides instruction for pupils in kindergarten programs and grades one through three shall conduct a curriculum evaluation and adopt a scientifically based reading curriculum that includes the essential components of reading instruction.� All school districts and charter schools that offer instruction in kindergarten programs and grades one through three shall provide ongoing teacher training based on scientifically based reading research.

C. Each school district or charter school that provides instruction in kindergarten programs and grades one through three shall devote reasonable amounts of time to explicit instruction and independent reading in grades one through three.

D. A pupil in grade three who does not meet or exceed the reading standards measured by the Arizona instrument to measure standards test administered pursuant to section 15‑741 shall be provided intensive reading instruction as defined by the state board of education until the pupil meets these standards.

E. The governing board of each school district and the governing body of each charter school shall determine the percentage of pupils at each school in grade three who do not meet the reading standards prescribed by the state board of education and measured by the Arizona instrument to measure standards test administered pursuant to section 15‑741.� If more than twenty per cent of students in grade three at either the individual school level or at the school district level do not meet the standards, the governing board or governing body shall conduct a review of its reading program that includes curriculum and professional development in light of current, scientifically based reading research.

F. Based on the review required in subsection E of this section, the governing board or governing body and the school principal of each school that does not meet the reading standards, in conjunction with school council members, if applicable, shall develop methods of best practices for teaching reading based on essential components of reading instruction and supported by scientifically based reading research.� These methods shall be adopted at a public meeting and shall be implemented the following academic year.

G. Subsections E and F of this section shall be coordinated with efforts to develop and implement an improvement plan if required pursuant to section 15‑241.

H. For the purposes of this section:

1. "Essential components of reading instruction" means explicit and systematic instruction in the following:

(a) Phonemic awareness.

(b) Phonics.

(d) Reading fluency.

(e) Reading comprehension.

2. "Reading" means a complex system of deriving meaning from print that requires all of the following:

(a) The skills and knowledge to understand how phonemes or speech sounds are connected to print.

(b) The ability to decode unfamiliar words.

(d) Sufficient background information and vocabulary to foster reading comprehension.

(e) The development of appropriate active strategies to construct meaning from print.

(f) The development and maintenance of a motivation to read.

3. "Scientifically based reading research" means research that meets all of the following:

(a) Applies rigorous, systematic and objective procedures to obtain valid knowledge relevant to reading development, reading instruction and reading difficulties.

(b) Employs systematic empirical methods that draw on observation or experiment.

(c) Involves rigorous data analyses that are adequate to test the stated hypotheses and justify the general conclusions drawn.

(d) Relies on measurements or observational methods that provide valid data across evaluators and observers and across multiple measurements and observations.

(e) Has been accepted by a peer reviewed journal or approved by a panel of independent experts through a comparably rigorous, objective and scientific review.

(f) Contains all of the elements of the essential components of reading instruction. END_STATUTE

Sec. 8. Section 15-720.01, Arizona Revised Statutes, is amended to read:

START_STATUTE15-720.01. Mathematics or science achievement grant program; criteria; report; fund; program termination

A. The mathematics or science achievement grant program is established in the state board of education and shall be administered by the state board of education.� The purpose of the program is to promote improved pupil achievement in mathematics or science by providing supplemental funding for innovative mathematics or science programs.

B. The state board of education shall develop application procedures, selection criteria and minimum performance standards. The state board of education shall award mathematics or science achievement grants to school districts and charter schools that demonstrate through specific performance measures and supporting data that the proposed programs provide new and innovative ways to increase pupils' mathematics or science skills. School districts and charter schools may contract with a service provider. The state board of education shall give priority to school districts and charter schools that have low mathematics or science achievement scores as measured by the Arizona instrument to measure standards test prescribed in section 15‑741.

C. On or before December 15, the state board of education shall submit an annual report concerning each grant recipient's mathematics or science achievement program to the governor, the president of the senate, the speaker of the house of representatives and the joint legislative budget committee. The state board of education shall provide a copy of the report to the secretary of state and the director of the Arizona state library, archives and public records and the joint legislative budget committee.� The state board shall include an evaluation of the effectiveness of the program and a comparison of the annual academic achievement of pupils in the grant recipient's mathematics or science achievement program to pupils in comparable schools that are not in the mathematics or science achievement program.

D. The mathematics or science achievement program fund is established consisting of monies appropriated for this purpose. The state board of education shall administer the fund.� Monies in the fund are exempt from the provisions of section 35‑190 relating to lapsing of appropriations. The state board of education may retain up to five per cent of the monies appropriated to the state board for the purposes of this section for costs associated with administering the mathematics or science achievement grant program.

E. The program established by this section ends on July 1, 2017 pursuant to section 41‑3102. END_STATUTE

Sec. 9. Section 15-741, Arizona Revised Statutes, is amended to read:

START_STATUTE15-741. Assessment of pupils

A. The state board of education shall:

1. Adopt rules for purposes of this article pursuant to title 41, chapter 6.

2. Adopt and implement an Arizona instrument to measure standards test to measure pupil achievement of the state board adopted academic standards in reading, writing and mathematics in at least four grades designated by the board.� The governing board of a school district or the governing body of a charter school may opt out, pursuant to sections 15‑701 and 15‑701.01, of any instrument to measure standards test adopted by the state board of education. The state board shall determine the manner of implementation.� The state board may administer assessments of the academic standards in social studies and science, except that a pupil shall not be required to meet or exceed the social studies or science standards measured by the Arizona instrument to measure standards test.

3. Ensure that the tests prescribed in this section are uniform comparable by developing mechanisms to compare the academic performance of pupils who are enrolled in school districts and charter schools throughout the state.

4. Ensure that the tests prescribed in this section are able to be scored in an objective manner and that the tests are not intended to advocate any sectarian, partisan or denominational viewpoint.

5. Include within its budget all costs pertaining to the tests prescribed in this article. If sufficient monies are appropriated, the state board may provide achievement test services to school districts that request assistance in testing pupils in grades additional to those required by this section.

6. Survey teachers, principals and superintendents on achievement related nontest indicators, including information on graduation rates by ethnicity and dropout rates by ethnicity for each grade level.� Before the survey, the state board of education shall approve at a public meeting the nontest indicators on which data will be collected.� In conducting the survey and collecting data, the state board of education shall not violate the provisions of the family educational rights and privacy act (P.L. 93‑380), as amended, nor disclose personally identifiable information.

7. Establish a fair and consistent method and standard by which test scores from schools in a district may be evaluated taking into consideration demographic data. The board shall establish intervention strategies to assist schools with scores below the acceptable standard. The board shall annually review district and school scores and shall offer assistance to school districts in analyzing data and implementing intervention strategies. The board shall use the adopted test and methods of data evaluation for a period of at least ten years.

8. Participate in other assessments that provide national comparisons as needed.

B. The achievement tests adopted by the state board as provided in subsection A of this section shall be given at least annually. Nontest indicator data and other information shall be collected at the same time as the collection of achievement test data.

C. Local school district governing boards shall:

1. Administer the tests prescribed in subsection A of this section.

2. Survey teachers, principals and superintendents on achievement related nontest indicator data as required by the state board, including information related to district graduation and dropout rates.� In conducting the survey and collecting data, the governing board shall not violate the provisions of the family educational rights and privacy act (P.L. 93‑380), as amended, nor disclose personally identifiable information.

D. Any additional assessments for high school pupils that are adopted by the state board of education after November 24, 2009 shall be designed to measure college and career readiness of pupils.

E. A test for penmanship shall not be required pursuant to this article. END_STATUTE

Sec. 10. Section 15-743, Arizona Revised Statutes, is amended to read:

START_STATUTE15-743. Test results; annual report

A. The state board of education shall provide annual reports for every school and district and the state as a whole. The state board shall annually submit these reports to school districts, the legislature and the county school superintendents and shall make them available to the public. The state board shall publish and distribute the reports by September 1 and shall also provide a cumulative summary of the reports every five years. The annual reports and cumulative summary results shall include:

1. Average and range scores on the Arizona instrument to measure standards test.

2. Standardized test scores by subject area according to percentiles and stanines for the school, school district, county, state and nation.

3. Achievement related nontest indicator data collected in the survey of teachers, principals and superintendents as required by section 15‑741, including information related to dropout rates by ethnicity for each grade level and graduation rates and postsecondary employment and education by ethnicity.� In reporting such data, the state board of education shall not violate the provisions of the family educational rights and privacy act (P.L. 93‑380), as amended, nor disclose personally identifiable information.

4. The numbers of pupils who have completed the academic standards at grades three, eight and twelve.

B. Test results on individual pupils shall not be made available to the public by name or individually identifiable reference.

C. The state board shall provide a copy of the results from the tests prescribed in section 15‑741, subsection A for each school district to that school district.� No results may be released to the public until ten days after the reports are provided to each school district.

D. The state board shall provide each school district participating in the testing program with a copy of each pupil's standardized norm‑referenced test scores in reading, language arts and mathematics, and the associated grade equivalents, percentiles and stanines for the school, school district, county, state and nation, a report of pupil progress on an ongoing and annual basis, showing the trends in gain or loss in pupil achievement over time in reading, language arts and mathematics for all years in which pupils are enrolled in the school district for an entire school year and for which this information is available and a report of the pupil progress for pupils not enrolled in a district for an entire school year. The state board shall also provide each school district with each pupil's Arizona instrument to measure standards test scores and the Arizona instrument to measure standards test scores for the school, district, county and state.

E. The school district shall provide a parent or guardian of each pupil participating in the standardized norm‑referenced testing part of the program with a copy of the pupil's score in reading, language arts and mathematics, and the percentiles and stanines.� The school district shall provide a parent or guardian of each pupil with a copy of the pupil's scores on the Arizona instrument to measure standards test and the associated scores for the school, district, county and state.� The school district shall make available to the public through the reports those scores for each school in the district and for the school district, county, state and nation.

F. Each pupil's Arizona instrument to measure standards test results for grade twelve shall be recorded on the pupil's high school transcript.� The state board of education shall prescribe the format for recording Arizona instrument to measure standards test results on high school transcripts. END_STATUTE

Sec. 11. Section 15-746, Arizona Revised Statutes, is amended to read:

START_STATUTE15-746. School report cards

A. Each school shall distribute an annual report card that contains at least the following information:

1. A description of the school's regular, magnet and special instructional programs.

2. A description of the current academic goals of the school.

3. A summary of the results achieved by pupils enrolled at the school during the prior three school years as measured by the Arizona instrument to measure standards test and the nationally standardized norm‑referenced achievement test as designated by the state board and as reported in the annual report prescribed by section 15‑743, a summary of the pupil progress on an ongoing and annual basis, showing the trends in gain or loss in pupil achievement over time in reading, language arts and mathematics for all years in which pupils are enrolled in the school district for an entire school year and for which this information is available and a summary of the pupil progress for pupils not enrolled in a district for an entire school year.

4. The school's current expenditures per pupil for classroom supplies, classroom instruction excluding classroom supplies, administration, support services‑students, and all other support services and operations. The current expenditures per pupil by school shall include allocation of the district‑wide expenditures to each school, as provided by the district. The report shall include a comparison of the school to the state amount for a similar type of district as calculated in section 15‑255.� The method of calculating these per pupil amounts and the allocation of expenditures shall be as prescribed in the uniform system of financial records.

5. The attendance rate of pupils enrolled at the school as reflected in the school's average daily membership as defined in section 15‑901.

6. The total number of incidents that occurred on the school grounds, at school bus stops, on school buses and at school‑sponsored events and that required the contact of a local, county, tribal, state or federal law enforcement officer pursuant to section 13‑3411, subsection F, section 13‑3620, section 15‑341, subsection A, paragraph� 31 or section 15‑515.� The total number of incidents reported shall only include reports that law enforcement officers report to the school are supported by probable cause.� For the purposes of this paragraph, a certified peace officer who serves as a school resource officer is a law enforcement officer. A school may provide clarifying information if the school has a school resource officer on campus.

7. The percentage of pupils who have either graduated to the next grade level or graduated from high school.

8. A description of the social services available at the school site.

9. The school calendar, including the length of the school day and hours of operations.

10. The total number of pupils enrolled at the school during the previous school year.

11. The transportation services available.

12. Beginning in the 2000‑2001 school year and until July 1, 2006, the reading instruction programs used by the school for kindergarten programs and grades one, two and three, pursuant to section 15‑704. The report card shall include a district comparison of test scores among the different programs of reading instruction and shall identify the program of reading instruction used in each classroom.

13. A description of the responsibilities of parents of children enrolled at the school.

14. A description of the responsibilities of the school to the parents of the children enrolled at the school, including dates the report cards are delivered to the home.

15. A description of the composition and duties of the school council as prescribed in section 15‑351 if such a school council exists.

16. For the most recent year available, the average current expenditure per pupil for administrative functions compared to the predicted average current expenditure per pupil for administrative functions according to an analysis of administrative cost data by the joint legislative budget committee staff.

17. If the school provides instruction to pupils in kindergarten programs and grades one through three, the ratio of pupils to teachers in each classroom where instruction is provided in kindergarten programs and grades one through three.

18. The average class size per grade level for all grade levels, kindergarten programs and grades one through eight.� For the purposes of this paragraph, "average class size" means the weighted average of each class.

B. The department of education shall develop a standardized report card format that meets the requirements of subsection A of this section. The department shall modify the standardized report card as necessary on an annual basis. The department shall distribute to each school in this state a copy of the standardized report card that includes the required test scores for each school. Additional copies of the standardized report card shall be available on request.

C. After each school has completed the report card distributed to it by the department of education, the school, in addition to distributing the report card as prescribed in subsection A of this section, shall send a copy of the report card to the department.� The department shall prepare an annual report that contains the report card from each school in this state.

D. The school shall distribute report cards to parents of pupils enrolled at the school, no later than the last day of school of each fiscal year, and shall present a summary of the contents of the report cards at an annual public meeting held at the school.� The school shall give notice at least two weeks before the public meeting that clearly states the purposes, time and place of the meeting. END_STATUTE

Sec. 12. Section 15-763, Arizona Revised Statutes, is amended to read:

START_STATUTE15-763. Plan for providing special education; definition

A. All school districts and charter schools shall develop policies and procedures for providing special education to all children with disabilities within the district or charter school.� All children with disabilities shall receive special education programming commensurate with their abilities and needs.� Each child shall be ensured access to the general curriculum and an opportunity to meet the state's academic standards.� Pupils who receive special education shall not be required to achieve passing scores on the Arizona instrument to measure standards test in order to graduate from high school unless the pupil is learning at a level appropriate for the pupil's grade level in a specific academic area and unless a passing score on the Arizona instrument to measure standards test is specifically required in a specific academic area by the pupil's individualized education program as mutually agreed on by the pupil's parents and the pupil's individualized education program team or the pupil, if the pupil is at least eighteen years of age. The pupil's individualized education program shall include any necessary testing accommodations. Special education services shall be provided at no cost to the parents of children with disabilities.

B. The state board of education shall adopt guidelines to define a parent's or guardian's role or a pupil's role, if the pupil is at least eighteen years of age, in the development of a pupil's section 504 plan as defined in section 15-731, including testing and testing accommodations.

C. For the purposes of determining the services to pupils served by private schools under existing federal law, the state shall consider the term to include homeschooled pupils.

D. If federal monies are provided to a school district or a charter school for special education services to homeschooled or private schooled pupils, the school district or charter school shall provide the services to both the homeschooled pupils and the private schooled pupils in the same manner.

E. For the purposes of this section, "special education" has the same meaning prescribed in section 15‑1201. END_STATUTE

Sec. 13. Section 15-792.02, Arizona Revised Statutes, is amended to read:

START_STATUTE15-792.02. Board examination system; private contractor; duties

A. The state board of education shall select and enter into a five‑year agreement with a private organization to operate and administer the board examination system prescribed in this article.

B. The private organization selected by the state board of education shall:

1. Identify, select and collaborate with a national organization that is devoted to issues concerning education and the economy and that is selected by the state board of education to provide technical services to develop and maintain an interstate system of approved board examination systems.

2. Provide data and other information to a national organization that is devoted to issues concerning education and the economy and that is selected by the state board of education to provide technical services the national organization deems necessary to set appropriate performance standards for the students in this state.� The department of education shall provide data and other information to the private organization.

3. Conduct technical studies required by the state board of education to compare the scores on approved board examinations by the students in this state to scores on the Arizona instrument to measure standards test and other measures deemed necessary to ensure the efficacy of the approved board examinations.� The private organization may contract with other entities that are selected by the state board of education for the purpose of conducting technical studies.

4. In cooperation with the superintendent of public instruction and the state board of education, solicit monies from all lawful private and public sources, including federal monies, to offset the costs of instruction provided to students under this article.

5. Exercise general supervision over the implementation of the approved board examination systems in this state for the duration of the five-year contract. These examination systems shall meet the following criteria:

(a) Appear on a list of approved board examination systems selected by the interstate compact.

(b) Be periodically evaluated to ensure alignment with internationally benchmarked standards selected by an interstate compact on board examination systems.

(c) Have common passing scores that are prescribed by an interstate compact on board examination systems and that are set to the level of skills and knowledge needed to succeed in college‑level courses offered by community colleges in this state that count toward a degree or certificate without taking remedial or developmental coursework.� The private organization, on approval of the state board of education and with input from representatives from school districts, charter schools, community colleges and universities in this state, shall designate two individuals to represent this state in an interstate compact on board examination systems to prescribe the common passing scores prescribed in this subdivision.

6. Prepare an annual report for the state board of education, which shall forward it to the legislature and the governor, on the progress made toward the goals established in this article and provide copies to the secretary of state.� Participating schools and the department of education shall provide data to the private organization as needed in order to complete the annual report.

7. Identify, select and represent this state on the national governing body of an interstate compact on board examination systems, as approved by the state board of education, to enable states to collaborate in the following areas:

(a) The selection of board examination systems for use in those states.

(b) Providing technical assistance required to implement the board examination systems effectively in those states for the use of those examinations.

(c) Entering into contracts with board examination system providers or with a national organization that is devoted to issues concerning education and the economy to develop new or improved board examination systems.

8. Select this state's representatives in an interstate compact on board examination systems in accordance with policies prescribed by that interstate compact.

C. The state board of education shall adopt rules to carry out the purposes of this section and shall select college and career ready examinations that are available to pupils in grade eight, including those pupils who intend to participate in the board examinations system in high school.� The examinations shall be selected to provide data to pupils, their families and schools regarding the pupil's level of preparation for entry into a college and career ready pathway in high school.

D. Pursuant to rules adopted by the state board of education, the department of education shall develop a system to track the academic progress of pupils who participate in the board examination system.

E. All actions taken pursuant to this section shall comply with the family educational rights and privacy act of 1974 (P.L. 93-380), as amended. END_STATUTE

Sec. 14. Section 15-977, Arizona Revised Statutes, is amended to read:

START_STATUTE15-977. 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.� Beginning in school year 2014‑2015, individual teacher performance as measured by the teacher's performance classification pursuant to section 15‑203, subsection A, paragraph 38 shall be a component of the school district's portion of the forty per cent allocation for teacher compensation based on performance and employment related expenses.

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. Individual teacher performance as measured by the teacher's performance classification pursuant to section 15‑203, subsection A, paragraph 38.� Beginning in school year 2014‑2015, the individual teacher performance component shall account for thirty-three per cent of the forty per cent allocation for teacher compensation based on performance and employment related expenses.

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

4. Other measures of academic progress.

5. Dropout or graduation rates.

6. Attendance rates.

7. Ratings of school quality by parents.

8. Ratings of school quality by students.

9. The input of teachers and administrators.

10. 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.

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

12. Regular evaluation for effectiveness, which shall comply by fiscal year 2014‑2015 with section 15‑203, subsection A, paragraph 38.

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.

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 Instrument to Measure standards test 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 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.� This state shall not 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 Instrument to Measure standards test 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. 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. 1. "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.

2. "Instrument to Measure Standards test intervention" means summer programs, after school programs, before school programs or tutoring programs that are specifically designed to ensure that pupils meet academic standards as measured by the instrument to measure standards test prescribed by section 15‑741. END_STATUTE

Sec. 15. Section 15-1805.01, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1805.01. Admissions; enrollments; community colleges

A. Admissions to the community colleges in this state may be granted to any person who meets any one of the following criteria:

1. Is a graduate of a high school that is accredited by a regional accrediting association as defined by the United States office of education or approved by a state board of education or other appropriate state educational agency.

2. Has a high school certificate of equivalency.

3. Is at least eighteen years of age and demonstrates evidence of potential success in the community college.

4. Is a transfer student in good standing from another college or university.

B. Each community college district shall adopt policies regarding the admission of students under eighteen years of age that include, at a minimum, student completion of course prerequisites and the following requirements:

1. Admission to the community colleges in this state shall be granted to any student who is under eighteen years of age and who achieves one of the following:

(a) A composite score of 93 or more on the preliminary scholastic aptitude test.

(b) A composite score of 930 or more on the scholastic aptitude test.

(d) A passing score on the relevant portions of the Arizona instrument to measure standards test.

(e) The completion of a college placement test designated by the community college district that indicates the student is at the appropriate college level for the course.

(f) Is a graduate of a private or public high school or has a high school certificate of equivalency.

2. A community college may limit the number of semester hours in which the student may enroll to not more than six credit hours.

C. Homeschooled students are exempt from subsection B of this section.

D. Students who enroll in vocational courses may be admitted on an individual basis with the approval of college officials if the student meets the established requirements of the courses for which the student enrolls and the college officials determine that the student's admission is in the best interest of the student. END_STATUTE

Sec. 16. Conforming legislation

The legislative council staff shall prepare proposed legislation conforming the Arizona Revised Statutes to the provisions of this act for consideration in the fifty-second legislature, first regular session.