| House of Representatives HB 2417 | |||||||||||
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schools; intervention; financial mismanagement Sponsor: Representative Anderson | |||||||||||
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HB 2417 establishes rules and regulations allowing the State Board of Education (SBE) to declare a receivership and to appoint a receiver to take control of a school district that is insolvent or has been grossly mismanaged.
Current Status HB 2417 was amended in the Committee on K-12 Education by adding an emergency clause. Provisions Requires the SBE to review allegations of a school district being insolvent or grossly mismanaged and allows for a district to respond to the allegations at a public hearing. Establishes the criteria to determine if a school district is insolvent. A school district is not insolvent if the circumstances are a result of a failure by the State to make a payment on time. Allows the SBE to place a school district under receivership and appoint a receiver to take control of a school district if it has been demonstrated by a preponderance of evidence that the school district is insolvent or has been grossly mismanaged. Requires the SBE to adopt rules establishing a list of qualified receivers. Establishes the authorities, duties and powers of an appointed receiver, to be effective on the date of appointment by the SBE. Requires an appointed receiver to investigate and analyze the financial affairs of the school district and submit a report of the findings to the SBE within 120 days of the appointment. Requires an appointed receiver to submit a financial improvement plan and budget detailing how the school district will eliminate gross mismanagement and achieve financial solvency to the SBE within 180 days of being appointed. Requires the SBE to determine the salaries, and the school district to pay the salaries and benefits, of an appointed receiver and any employees or officers appointed by the receiver. Allows the SBE to remove a school district from receivership and dismiss a receiver and any employees or officers the receiver may have appointed thirty days after the Auditor General declares the school district is financially solvent, the Auditor General certifies the school district’s records are in compliance with generally accepted accounting principles, the receiver certifies that the school district is no longer engaged in gross mismanagement and the SBE has determined that the school district is able to pay its debts as they become due. Requires an appointed receiver to submit an annual progress report to the SBE and requires the SBE to review the progress of a receivership every six months. If the SBE determines a receiver is not making sufficient progress they may remove the current receiver and appoint a new receiver. Allows the SBE to dismiss an appointed receiver for cause or on the written request of the state board. Establishes the duty of the school district to indemnify a receiver and any employee or officer appointed by the receiver if they acted in good faith and reasonably believed they were acting within the best interest of the school district and they had no reasonable cause to believe their conduct was unlawful. Prohibits any employee or officer from entering into a financial contract on behalf of the school district in an amount greater than the receiver’s authorized financial plan and budget for the school district. Prohibits the declaration of a receivership from creating a private cause of action against the school district, its officers, directors, board members or employees. Prohibits the control of a school district by a receiver from interfering with the election or reelection of school district governing board members. Prohibits a receivership from interfering with a school districts ability to declare bankruptcy under federal law. Requires the SBE to monitor and give technical assistance to a school district for two years after a receivership has ended. Defines the terms delinquent debt, gross mismanagement, notice, receiver, receivership and superintendent. Amendments HB 2417 was amended in the Committee on K-12 Education by adding an emergency clause. 47th Legislature First Regular Session 3 February 2, 2005 | |||||||||||
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The Arizona House of Representatives Originally passed February 2, 2005 | |||||||||||
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