A.R.S. tit. 41 ch. 56 — Arizona Revised Statutes Title 41 Chapter 56 — School Capital Finance

41-5701. Definitions In this chapter, unless the context otherwise requires: 1. "Board" means the school facilities oversight board. 2. "Division" means the division of school facilities within the department of administration. 41-5701.01. Division of school facilities A. The division of school facilities is established within the department of administration. B. The director of the department of administration shall appoint the director of the division. 41-5701.02. School facilities oversight board; members; conflict of interest; violation; classification; change orders; notification A. The school facilities oversight board is established within the division consisting of the following members who are appointed by the governor pursuant to section 38-211 in such a manner as to provide for approximate geographic balance and approximate balance between public and private members: 1. One member who represents a statewide organization of taxpayers. 2. One member who is a registered professional architect. 3. One member with knowledge and experience in school facilities management in a public school system. 4. One member who is a registered professional engineer. 5. Two members who are owners or officers of a private construction company, who have knowledge of and experience in constructing large commercial or government buildings and whose businesses do not include school construction. 6. One person who represents the business community. B. In addition to the members appointed pursuant to subsection A of this section: 1. The superintendent of public instruction or the superintendent's designee shall serve as an advisory nonvoting member of the school facilities oversight board. 2. The director of the department of administration or the director's designee shall serve as an advisory nonvoting member of the school facilities oversight board. C. Members of the school facilities oversight board serve four-year terms. The school facilities oversight board shall meet as often as the members deem necessary. A majority of the members constitutes a quorum for the transaction of business. D. The unexcused absence of a member for more than three consecutive meetings is justification for removal by a majority vote of the board. If the member is removed, notice shall be given of the removal pursuant to section 38-292. E. The governor shall fill a vacancy by appointment of a qualified person as provided in subsection A of this section. F. Members of the board who are employed by government entities are not eligible to receive compensation. Members of the board who are not employed by government entities are entitled to payment of $150 for each meeting attended, prorated for partial days spent for each meeting, up to $2,500 each year. All members are eligible for reimbursement of expenses pursuant to title 38, chapter 4, article 2. These expenses and the payment of compensation are payable to a member from monies appropriated to the board from the new school facilities fund. G. Members and employees of the school facilities oversight board are subject to title 38, chapter 3, article 8. H. In addition to the requirements prescribed in subsection G of this section, employees of the school facilities oversight board may not have a direct or indirect financial interest in any property purchased, facility constructed or contract financed with monies made available by the board or any other public monies. A person who knowingly violates this subsection is guilty of a class 1 misdemeanor. I. The division shall establish policies and procedures relating to building renewal grant change orders that include the following: 1. The division shall approve or reject a change order within two business days. 2. If a school district approves work referenced in a change order before the division approves the change order, the school district is responsible for the cost and construction of the project. J. The division shall establish policies and procedures to ensure that it notifies school districts in a uniform manner and at least annually of the services and funding that are available from the board and the division for facility construction, renovation and repair projects. The division shall update and post this information on its website on or before July 1 of each year. K. The division shall establish and maintain a list of the persons who are responsible for facilities management at each school district in this state. A school district shall promptly notify the division of any change to persons who are responsible for facilities management at that school district. The division shall update and post this information on its website on or before July 1 of each year. L. Members of the school facilities oversight board may not solicit, accept or provide gifts that are prohibited by state law. 41-5702. Powers and duties; staffing; reporting requirements A. The division shall: 1. Assess school facilities and equipment deficiencies and approve the distribution of grants as appropriate. 2. Maintain a database of school facilities to allow for the administration of the new school facilities formula and the building renewal grant fund. The facilities listed in the database must include all buildings that are owned by school districts. The division shall ensure that the database is updated on at least an annual basis. Each school district shall report to the division not later than September 1 of each year information as required by the division to administer the building renewal grant fund and by the school facilities oversight board to compute new school facilities formula distributions, including the nature and cost of major repairs, renovations or physical improvements to or replacement of building systems or equipment that were made in the previous year and that were paid for either with local monies or monies provided from the building renewal grant fund. Each school district shall report any school or school buildings that have been closed, that are vacant or partially used pursuant to section 15-119 and that have been leased to another entity or that operate as a charter school. The division shall develop guidelines and definitions for the reporting prescribed in this paragraph and may review or audit the information, or both, to confirm the information submitted by a school district. Notwithstanding any other provision of this chapter, if a school district converts space that is listed in the database maintained pursuant to this paragraph to space that will be used for administrative purposes, the school district is responsible for any costs associated with converting, maintaining and replacing that space. If a building is significantly upgraded or remodeled, the division shall adjust the age of that school facility in the database as follows: (a) Determine the building capacity value as follows: (i) Multiply the student capacity of the building by the per pupil square foot capacity established by section 41-5741. (ii) Multiply the product determined in item (i) of this subdivision by the cost per square foot established by section 41-5741. (b) Divide the cost of the renovation by the building capacity value determined in subdivision (a) of this paragraph. (c) Multiply the quotient determined in subdivision (b) of this paragraph by the currently listed age of the building in the database. (d) Subtract the product determined in subdivision (c) of this paragraph from the currently listed age of the building in the database, rounded to the nearest whole number. If the result is a negative number, use zero. 3. Inspect, contract with a third party to inspect or certify school district self-inspections of school buildings at least once every five years to ensure compliance with the building adequacy standards prescribed in section 41-5711, the accuracy of the reporting of vacant and partially used buildings pursuant to this subsection and routine preventive maintenance guidelines as prescribed in this section with respect to constructing new buildings and maintaining existing buildings. The division shall randomly select twenty school districts every thirty months and provide for them to be inspected pursuant to this paragraph. 4. Develop prototypical elementary and high school designs. The division shall review the design differences between the schools with the highest academic productivity scores and the schools with the lowest academic productivity scores. The division shall also review the results of a valid and reliable survey of parent quality rating in the highest performing schools and the lowest performing schools in this state. The survey of parent quality rating shall be administered by the department of education. The division shall consider the design elements of the schools with the highest academic productivity scores and parent quality ratings in the development of elementary and high school designs. The division shall develop separate school designs for elementary, middle and high schools with varying pupil capacities. 5. Develop application forms, reporting forms and procedures to carry out the requirements of this article, including developing and implementing policies and procedures to: (a) Ensure that the division and the school facilities oversight board, as applicable, notify school districts in a uniform manner of the services and funding available for school districts from the board or the division for facility construction, renovation and repair projects. The policies and procedures shall require the division and the board to provide at least one annual communication to school districts in a manner prescribed by the division and shall require each school district to develop and maintain a list of persons who are responsible for facilities management at that school district. (b) Establish a project eligibility assessment for all projects submitted for building renewal grant funding or emergency deficiencies correction funding, including establishing standardized criteria for project eligibility. Before the division formally approves a project, the staff of the division may review the costs and scope of the proposed project with persons and entities that have submitted bids on the project. (c) Ensure that the division and the school facilities oversight board maintain standardized documentation of all projects submitted to the board and the division for consideration to receive services or a financial award from the board or the division. The board and the division shall maintain standardized documentation of any project awarded monies by the board or the division, including records of payments to school districts in a manner prescribed by the division. The standardized documentation shall include the following as part of the eligibility determination criteria: (i) Whether the problem that the proposed project intends to address caused the building or facility to fall below the minimum school facility adequacy guidelines prescribed in section 41-5711. (ii) Whether the school district performed the routine preventive maintenance required by section 41-5731 on the building or facility. (d) Require a school district to submit contact information for each proposed project, including the name, email address and telephone number of persons who are responsible for facilities management at the school district. (e) Require a school district to provide justification for each proposed project, including all of the following: (i) The school district's use or planned use of the facility. (ii) A detailed description of the problem and the school district's recommended solution. (iii) Any completed professional study regarding the proposed project. (iv) Any citation or report from government entities. (v) The estimated cost of the proposed project, with documentation. (vi) The project category. (vii) A description of any local funding that will be used for the proposed project. (viii) Documentation on associated insurance coverage, if applicable. (f) Require that an initial application not be considered complete until all necessary information is submitted. (g) Allow a school district to submit an incomplete application and request technical assistance from the staff of the board if the school district is unable to provide sufficient information in the initial application. (h) If applicable, require that a complete application be received by the board at least fifteen business days before the next regularly scheduled board meeting in order for the application to be considered at that meeting. An incomplete application may be considered at that meeting if both the staff of the board and the superintendent of the school district deem the project critical. (i) Allow the staff of the board or the division, as applicable, to notify a school district in writing before review by the board or division that the proposed project does not meet eligibility criteria prescribed in this chapter. The written notification shall include documentation to support the determination that the proposed project does not meet the eligibility criteria prescribed in this chapter. The school district may directly appeal the determination of ineligibility to the director of the division. The school district may directly appeal the director's determination of ineligibility to the board. (j) Prohibit the staff of the board or division from requesting that a school district withdraw a project application from review by the board or division if the initial review determines that the proposed project may be ineligible for monies pursuant to this chapter. 6. Electronically submit an annual report on or before December 15 to the speaker of the house of representatives, the president of the senate, the superintendent of public instruction, the secretary of state and the governor that includes the following information: (a) A detailed description of the amount of monies distributed by the division under this chapter in the previous fiscal year. (b) A list of each capital project that received monies from the division under this chapter during the previous fiscal year, a brief description of each project that was funded and a summary of the division's reasons for distributing monies for the project. (c) A summary of the findings and conclusions of the building maintenance inspections conducted pursuant to this article during the previous fiscal year. (d) A summary of the findings of common design elements and characteristics of the highest performing schools and the lowest performing schools based on academic productivity, including the results of the parent quality rating survey. For the purposes of this subdivision, "academic productivity" means academic year advancement per calendar year as measured with student-level data using the statewide nationally standardized norm-referenced achievement test. 7. On or before December 1 of each year, report electronically to the joint committee on capital review the amounts necessary to fulfill the requirements of section 41-5721 for the following three fiscal years. In developing the amounts necessary for this report, the division shall use the most recent average daily membership data available. On request from the division, the department of education shall make available the most recent average daily membership data for use in calculating the amounts necessary to fulfill the requirements of section 41-5721 for the following three fiscal years. The division shall provide copies of the report to the president of the senate, the speaker of the house of representatives and the governor. 8. On or before June 15 of each year, electronically submit detailed information regarding demographic assumptions and a proposed construction schedule for individual projects approved in the current fiscal year and expected project approvals for the upcoming fiscal year to the joint committee on capital review for its review. A copy of the report shall also be submitted electronically to the governor's office of strategic planning and budgeting. The joint legislative budget committee staff, the governor's office of strategic planning and budgeting staff and the division staff shall agree on the format of the report. 9. Every two years, provide school districts with information on improving and maintaining the indoor environmental quality in school buildings. 10. Adopt rules regarding the validation of adjacent ways projects pursuant to paragraph 11 of this subsection. 11. Validate proposed adjacent ways projects that are submitted by school districts as prescribed in section 15-995 pursuant to rules adopted by the division under paragraph 10 of this subsection. 12. Submit a monthly report to the school facilities oversight board that details each adjacent ways project validated pursuant to paragraph 11 of this subsection. 13. Brief the joint committee on capital review at least once each year regarding the use of monies from all of the following: (a) The emergency deficiencies correction fund established by section 41-5721. (b) The building renewal grant fund established by section 41-5731. (c) The new school facilities fund established by section 41-5741. B. The school facilities oversight board or the division may contract for the following services in compliance with the procurement practices prescribed in chapter 23 of this title: 1. Private services. 2. Construction project management services. 3. Assessments for school buildings to determine if the buildings have outlived their useful life pursuant to section 41-5741, subsection G or have been condemned. 4. Services related to land acquisition and development of a school site. C. The school facilities oversight board shall: 1. Review and approve student population projections submitted by school districts to determine to what extent school districts are entitled to monies to construct new facilities pursuant to section 41-5741. The board shall make a final determination within five months after receiving an application from a school district for monies from the new school facilities fund. 2. Certify that plans for new school facilities meet the building adequacy standards prescribed in section 41-5711. 3. Review and approve or reject requests submitted by school districts to take actions pursuant to section 15-341, subsection G. 4. On or before December 15 of each year, electronically submit a report to the speaker of the house of representatives, the president of the senate, the superintendent of public instruction, the secretary of state and the governor that includes the following information: (a) A detailed description of the amount of monies the board distributed under this chapter in the previous fiscal year. (b) A list of each capital project that received monies from the board under this chapter during the previous fiscal year, a brief description of each project that was funded and a summary of the board's reasons for distributing monies for the project. (c) A summary of the findings and conclusions of the building maintenance inspections conducted pursuant to this article during the previous fiscal year. 5. On or before December 1 of each year, electronically report to the joint committee on capital review the amounts necessary to fulfill the requirements of section 41-5741 for the following three fiscal years. In developing the amounts necessary for this report, the board shall use the most recent average daily membership data available. On request from the board, the department of education shall make available the most recent average daily membership data for use in calculating the amounts necessary to fulfill the requirements of section 41-5741 for the following three fiscal years. The board shall provide copies of the report to the president of the senate, the speaker of the house of representatives and the governor. 6. Adopt minimum school facility adequacy guidelines to provide the minimum quality and quantity of school buildings and the facilities and equipment necessary and appropriate to enable pupils to achieve the educational goals of the Arizona state schools for the deaf and the blind. The board shall establish minimum school facility adequacy guidelines applicable to the Arizona state schools for the deaf and the blind. 7. On or before June 15 of each year, electronically submit to the joint committee on capital review for its review detailed information regarding demographic assumptions, a proposed construction schedule and new school construction cost estimates for individual projects approved in the current fiscal year and expected project approvals for the upcoming fiscal year. A copy of the report shall also be submitted electronically to the governor's office of strategic planning and budgeting. The joint legislative budget committee staff, the governor's office of strategic planning and budgeting staff and the board staff shall agree on the format of the report. 8. On or before December 31 of each year, report to the joint legislative budget committee on all class B bond approvals by school districts in that year. Each school district shall report to the board on or before December 1 of each year information required by the board for the report prescribed in this paragraph. 9. Determine whether any interest disclosed pursuant to subsection D, paragraph 13 of this section is a substantial interest as defined in section 38-502 and maintain a record of all substantial interests that are identified pursuant to this paragraph. D. The director of the division shall serve as the director of the school facilities oversight board. The director may hire and fire necessary staff subject to chapter 4, article 4 of this title and as approved by the legislature in the budget. The staff of the school facilities oversight board is exempt from chapter 4, articles 5 and 6 of this title. The director: 1. Shall analyze applications for monies submitted to the board and to the division by school districts. 2. Shall assist the board and the division in developing forms and procedures for distributing and reviewing applications and distributing monies to school districts. 3. May review or audit, or both, the expenditure of monies by a school district for deficiencies corrections and new school facilities. 4. Shall assist the board and the division in preparing the board's and division's annual reports. 5. Shall research and provide reports on issues of general interest to the board and the division. 6. May aid school districts in developing reasonable and cost-effective school designs in order to avoid statewide duplicated efforts and unwarranted expenditures in the area of school design. 7. May assist school districts in facilitating the development of multijurisdictional facilities. 8. Shall assist the board and the division in any other appropriate matter or method as directed by the division and the members of the board. 9. Shall establish procedures to ensure compliance with the notice and hearing requirements prescribed in section 15-905. The notice and hearing procedures adopted by the board shall include the requirement, with respect to the board's consideration of any application filed after July 1, 2001 or after December 31 of the year in which the property becomes territory in the vicinity of a military airport or ancillary military facility as defined in section 28-8461 for monies to fund the construction of new school facilities proposed to be located in territory in the vicinity of a military airport or ancillary military facility, that the military airport receive notification of the application by first class mail at least thirty days before any hearing concerning the application. 10. Shall expedite any request for monies in which the school district governing board submits an application that shows an immediate need for a new school facility. 11. Shall determine administrative completeness within one month after receiving an application from a school district for monies from the new school facilities fund. 12. Shall provide technical support to school districts as requested by school districts in connection with constructing new school facilities and maintaining existing school facilities and may contract directly with construction project managers pursuant to subsection B of this section. This paragraph does not restrict a school district from contracting with a construction project manager using district or state resources. 13. Shall require each employee of the school facilities oversight board to disclose in writing to the board at least once per year any interest that the employee has in any contract, sale, purchase, service or other transaction of the board or division or of a school district. E. When appropriate, the board and the division shall review and use the statewide school facilities inventory and needs assessment conducted by the joint committee on capital review and issued in July 1995. F. The school facilities oversight board shall contract with one or more private building inspectors to complete an initial assessment of school facilities and equipment and shall inspect each school building in this state at least once every five years to ensure compliance with section 41-5711. A copy of the inspection report, together with any recommendations for building maintenance, shall be provided to the school facilities oversight board and the governing board of the school district. G. The division or the board, as applicable, may consider appropriate combinations of facilities or uses in assessing and curing deficiencies pursuant to subsection A, paragraph 1 of this section and in certifying plans for new school facilities pursuant to subsection C, paragraph 2 of this section. H. The board shall not award any monies to fund new facilities that are financed by class A bonds that are issued by the school district. I. The board or the division shall not distribute monies to a school district for replacing or repairing facilities if the costs associated with the replacement or repair are covered by insurance or a performance or payment bond. J. The division may contract for construction services and materials that are necessary to correct existing deficiencies in school district facilities. The division may procure the construction services necessary pursuant to this subsection by any method, including construction-manager-at-risk, design-build, design-bid-build or job-order-contracting as provided by chapter 23 of this title. The construction planning and services performed pursuant to this subsection are exempt from section 41-791.01. K. The division may enter into agreements with school districts to allow division staff and contractors access to school property for the purposes of performing the construction services necessary pursuant to subsection J of this section. L. Each school district shall develop routine preventive maintenance guidelines for its facilities. The guidelines shall include plumbing systems, electrical systems, heating, ventilation and air conditioning systems, special equipment and other systems and for roofing systems shall recommend visual inspections performed by district staff for signs of structural stress and weakness. The guidelines shall be submitted to the division for review and approval. If on inspection by the division it is determined that a school district facility was inadequately maintained pursuant to the school district's routine preventive maintenance guidelines, the school district shall return the building to compliance with the school district's routine preventive maintenance guidelines. M. The division may temporarily transfer monies, or, if applicable, the board may direct the division to transfer monies, between the emergency deficiencies correction fund established by section 41-5721 and the new school facilities fund established by section 41-5741 if all of the following conditions are met: 1. The transfer is necessary to avoid a temporary shortfall in the fund into which the monies are transferred. 2. The transferred monies are restored to the fund where the monies originated as soon as practicable after the temporary shortfall in the other fund has been addressed. 3. The board and the division report to the joint committee on capital review the amount of and the reason for any monies transferred. N. After notifying each school district, and if a written objection from the school district is not received by the board or the division within thirty days after the notification, the board or the division may access public utility company records of power, water, natural gas, telephone and broadband usage to assemble consistent and accurate data on utility consumption at school facilities to determine the effectiveness of facility design, operation and maintenance measures intended to reduce energy and water consumption and costs. Any public utility that provides service to a school district in this state shall provide the data requested by the board or the division pursuant to this subsection. O. The division or the board shall not require a common school district that provides instruction to pupils in grade nine to obtain approval from the division or the board to reconfigure its school facilities. A common school district that provides instruction to pupils in grade nine is not entitled to additional monies from the division or the board for facilities to educate pupils in grade nine. P. A school district may appeal the denial of a request for monies pursuant to this chapter or any other appealable agency action by the division or the board pursuant to chapter 6, article 10 of this title. For the purposes of this subsection, "appealable agency action" has the same meaning prescribed in section 41-1092. 41-5703. School facilities oversight board lease-to-own; fund; expiration A. In order to fulfill the requirements of section 41-5741, the board may acquire school facilities for the use of one or more school districts by entering into one or more lease-to-own transactions in accordance with this section. For the purposes of this section, providing school facilities includes land acquisition, related infrastructure, fixtures, furnishings, equipment and costs of the lease-to-own transaction. The board may provide monies to provide school facilities in part pursuant to section 41-5741 and in part through a lease-to-own transaction. B. A lease-to-own transaction may provide for: 1. The ground lease of the land for the facilities to a private entity for the term of the lease-to-own transaction or for a term of up to one and one-half times the term of the lease-to-own transaction, subject to earlier termination on completion of performance of the lease-to-own agreement. The ground lessor may either be the school district or the board, whichever holds title to the land. 2. The lease of the completed school facilities by a private entity to the board for an extended term of years pursuant to a lease-to-own agreement. 3. The sublease of the completed school facilities by the board to the school district during the term of the lease-to-own agreement. The sublease shall provide for the use, maintenance and operation of the school facilities by the school district and for the transfer of ownership of the school facilities to the school district on completion of performance of the lease-to-own agreement. 4. The option for the board's purchase of the school facilities and transfer of ownership of the school facilities to the school district before the expiration of the lease-to-own agreement. 5. The services of trustees, financial advisors, paying agents, transfer agents, underwriters, lawyers and other professional service providers, credit enhancements or liquidity facilities and all other services considered necessary by the board in connection with the lease-to-own transaction, and related agreements and arrangements including arrangements for the creation and sale of certificates of participation evidencing proportionate interests in the lease payments to be made by the board pursuant to the lease-to-own agreement. C. The sublease of the school facilities to the school district is subject to this section and to the provisions of the lease-to-own agreement. Neither a ground lease by the school district as lessor nor a sublease of the school facilities to the school district is required to be authorized by a vote of the school district electors. A ground lease is not subject to any limitations or requirements applicable to leases or lease-purchase agreements pursuant to section 15-342 or any other section of title 15 or this chapter. D. Any school facility that is constructed through a lease-to-own agreement shall meet the minimum building adequacy standards set forth in section 41-5711. E. School districts may use local monies to exceed the minimum adequacy standards and to build athletic fields and any other capital project for leased-to-own facilities. F. The board shall include any square footage of new school facilities constructed through lease-to-own agreements in the computations prescribed in section 41-5711. G. The lease-to-own fund is established consisting of monies appropriated by the legislature. The board shall administer the fund and distribute monies in the fund to make payments pursuant to lease-to-own agreements entered into by the board pursuant to this section, to make payments to or for the benefit of school districts pursuant to local lease-to-own agreements entered into by school districts pursuant to section 41-5704 and to pay costs considered necessary by the board in connection with lease-to-own transactions and local lease-to-own transactions. Payments by the board pursuant to a lease-to-own agreement or local lease-to-own agreement shall be made only from the lease-to-own fund. On notice from the board, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the lease-to-own fund. H. A lease-to-own agreement entered into by the board pursuant to this section shall provide that: 1. At the completion of the lease-to-own agreement, ownership of the school facilities and land associated with the lease-to-own agreement shall be transferred to the school district as specified in the agreement. 2. The obligation of the board to make any payment under the lease-to-own agreement is a current expense, payable exclusively from appropriated monies, and is not a general obligation indebtedness of this state or the board. The obligation of a school district to make expenditures under a sublease pursuant to subsection B, paragraph 3 of this section is a current expense, payable exclusively from budgeted monies, and is not a general obligation indebtedness of the school district. 3. If the legislature fails to appropriate monies or the board fails to allocate such monies for any periodic payment or renewal term of the lease-to-own agreement, the lease-to-own agreement terminates at the end of the current term and this state and the board are relieved of any subsequent obligation under the agreement and the school district is relieved of any subsequent obligation under the sublease. 4. The lease-to-own agreement shall be reviewed and approved by the attorney general before the agreement may take effect. 5. Before the agreement takes effect and after review by the attorney general, the project or projects related to the agreement shall be submitted for review by the joint committee on capital review. I. The board may covenant to use its best efforts to budget, obtain, allocate and maintain sufficient appropriated monies to make payments under a lease-to-own agreement, but the lease-to-own agreement shall acknowledge that appropriating state monies is a legislative act and is beyond the control of the board or of any other party to the lease-to-own agreement. J. The land and the school facilities on the land are exempt from taxation during the term of the lease-to-own agreement and during construction and subsequent occupancy by the school district pursuant to the sublease. K. The powers prescribed in this section are in addition to the powers conferred by any other law. Without reference to any other provision of title 15, this chapter or any other law, this section is authority for the completion of the purposes prescribed in this section for the board to provide school facilities for use by school districts through lease-to-own transactions pursuant to this section without regard to the procedure required by any other law. Except as otherwise provided in this section, the provisions of title 15 and this chapter that relate to the matters contained in this section are superseded because this section is the exclusive law on these matters. L. The board shall not enter into lease-to-own transactions, including any refinancings or refundings, pursuant to this section from and after May 15, 2006. 41-5704. Local lease-to-own by school districts; expiration A. In order to fulfill the requirements of section 41-5741, with the approval of the board, a school district may acquire school facilities by entering into a local lease-to-own transaction in accordance with this section. For purposes of this section, providing school facilities includes land acquisition, related infrastructure, fixtures, furnishings, equipment and costs of the local lease-to-own transaction. The board may provide monies to provide school facilities in part pursuant to section 41-5741 and in part through payments to or for the benefit of a school district for a local lease-to-own transaction. B. A local lease-to-own transaction may provide for: 1. The ground lease of the land for the facilities to a private entity for the term of the local lease-to-own transaction or for a term of up to one and one-half times the term of the local lease-to-own transaction, subject to earlier termination on completion of performance of the local lease-to-own agreement. The ground lessor may either be the school district or the board, whichever holds title to the land. 2. The lease of the completed school facilities by a private entity to the school district for an extended term of years pursuant to a local lease-to-own agreement. The local lease-to-own agreement shall provide for the use, maintenance and operation of the school facilities by the school district and for the transfer of ownership of the school facilities to the school district on completion of performance of the local lease-to-own agreement. 3. The option for the school district's purchase of the school facilities and transfer of ownership of the school facilities to the school district before the expiration of the local lease-to-own agreement. 4. The services of trustees, financial advisors, paying agents, transfer agents, underwriters, lawyers and other professional service providers, credit enhancements or liquidity facilities and all other services considered necessary by the school district or the board in connection with the local lease-to-own transaction, and related agreements and arrangements including arrangements for the creation and sale of certificates of participation evidencing proportionate interests in the lease payments to be made by the school district pursuant to the local lease-to-own agreement. C. Neither a ground lease by the school district as lessor nor a local lease-to-own agreement is required to be authorized by a vote of the school district electors. A ground lease is not subject to any limitations or requirements applicable to leases or lease-purchase agreements pursuant to section 15-342 or any other section of title 15 or this chapter. D. The board may make payments to or for the benefit of the school district from the lease-to-own fund established by section 41-5703 for the payment of amounts payable under the local lease-to-own agreement. E. Any school facility that is constructed through a lease-to-own agreement shall meet the minimum building adequacy standards set forth in section 41-5711. F. School districts may use local monies to exceed the minimum adequacy standards and to build athletic fields and any other capital project for leased-to-own facilities. G. The board shall include any square footage of new school facilities constructed through lease-to-own agreements in the computations prescribed in section 41-5711. H. A local lease-to-own agreement entered into by a school district pursuant to this section shall provide that: 1. At the completion of the lease-to-own agreement, ownership of the school facilities and land associated with the lease-to-own agreement shall be transferred to the school district as specified in the agreement. 2. The obligation of the school district to make any payment or expenditure under the local lease-to-own agreement is a current expense, payable exclusively from properly budgeted monies, and is not a general obligation indebtedness of this state, the board or the school district, and that any payment by the board to or for the benefit of the school district from the lease-to-own fund established by section 41-5703 for payments of amounts payable under the local lease-to-own agreement is a current expense, payable exclusively from appropriated monies, and is not a general obligation indebtedness of this state or the board. 3. If the school district fails to properly budget for payments under the local lease-to-own agreement or if the legislature fails to appropriate monies or the board fails to allocate monies for periodic payment to or for the benefit of the school district for payments under the local lease-to-own agreement, the local lease-to-own agreement terminates at the end of the current term and the school district, the board and this state are relieved of any subsequent obligation under the local lease-to-own agreement. 4. The local lease-to-own agreement shall be reviewed and approved by the attorney general before the agreement may take effect. 5. Before the agreement takes effect and after review by the attorney general, the project or projects related to the agreement shall be submitted for review by the joint committee on capital review. I. The school district may covenant to use its best efforts to budget, obtain, allocate and maintain sufficient monies to make payments under a local lease-to-own agreement, but the local lease-to-own agreement shall acknowledge that budgeting school district monies is a governmental act of the school district governing board that may not be contracted away. The school facilities oversight board is not required to covenant to budget, obtain, allocate or maintain sufficient monies in the lease-to-own fund to make payments to or for the benefit of a school district for payments under a local lease-to-own agreement. J. The land and the school facilities on the land are exempt from taxation during the term of the local lease-to-own agreement and during construction and subsequent occupancy by the school district pursuant to the local lease-to-own agreement. K. The powers prescribed in this section are in addition to the powers conferred by any other law. Without reference to any other provision of title 15 or this chapter or any other law, this section is authority for the completion of the purposes prescribed in this section for school districts to provide school facilities through local lease-to-own transactions pursuant to this section without regard to the procedure required by any other law. Except as otherwise provided in this section, the provisions of title 15 or this chapter that relate to the matters contained in this section are superseded because this section is the exclusive law on these matters. L. School districts shall not enter into lease-to-own transactions, including any refinancings or refundings, pursuant to this section from and after May 15, 2006. 41-5705. Lease-to-own amount; expiration A. In order to fulfill the requirements of section 41-5741, the board may enter into lease-to-own transactions for up to a maximum of $200,000,000 in any fiscal year. B. The board shall not enter into lease-to-own transactions, including any refinancings or refundings, pursuant to this section from and after May 15, 2006. 41-5711. Minimum school facility adequacy requirements; definition A. The board, as determined and prescribed in this chapter, shall provide funding to school districts for new construction as the number of pupils in the district fills the existing school facilities and requires more pupil space. B. School buildings in a school district are adequate if all of the following requirements are met: 1. The buildings contain sufficient and appropriate space and equipment that comply with the minimum school facility adequacy guidelines established pursuant to subsection F of this section. The state shall not fund facilities for elective courses that require the school district facilities to exceed minimum school facility adequacy requirements. The board shall determine whether a school building meets the requirements of this paragraph by analyzing the total square footage that is available for each pupil in conjunction with the need for specialized spaces and equipment. 2. The buildings are in compliance with federal, state and local building and fire codes and laws that apply to the particular building, except that a school with an aggregate area of less than five thousand square feet is subject to permitting and inspection by a local fire marshal and is only subject to regulation or inspection by the office of the state fire marshal if the county, city or town in which the school is located does not employ a local fire marshal. An existing school building is not required to comply with current requirements for new buildings unless this compliance is specifically mandated by law or by the building or fire code of the jurisdiction where the building is located. 3. The building systems, including roofs, plumbing, telephone systems, electrical systems, heating systems and cooling systems, are in working order and are capable of being properly maintained. 4. The buildings are structurally sound. C. The standards that shall be used by the board to determine whether a school building meets the minimum adequate gross square footage requirements are as follows: 1. For a school district that provides instruction to pupils in programs for preschool children with disabilities, kindergarten programs and grades one through six, eighty square feet per pupil in programs for preschool children with disabilities, kindergarten programs and grades one through six. 2. For a school district that provides instruction to up to eight hundred pupils in grades seven and eight, eighty-four square feet per pupil in grades seven and eight. 3. For a school district that provides instruction to more than eight hundred pupils in grades seven and eight, eighty square feet per pupil in grades seven and eight or sixty-seven thousand two hundred square feet, whichever is more. 4. For a school district that provides instruction to up to four hundred pupils in grades nine through twelve, one hundred twenty-five square feet per pupil in grades nine through twelve. 5. For a school district that provides instruction to more than four hundred and up to one thousand pupils in grades nine through twelve, one hundred twenty square feet per pupil in grades nine through twelve or fifty thousand square feet, whichever is more. 6. For a school district that provides instruction to more than one thousand and up to one thousand eight hundred pupils in grades nine through twelve, one hundred twelve square feet per pupil in grades nine through twelve or one hundred twenty thousand square feet, whichever is more. 7. For a school district that provides instruction to more than one thousand eight hundred pupils in grades nine through twelve, ninety-four square feet per pupil in grades nine through twelve or two hundred one thousand six hundred square feet, whichever is more. D. The board may modify the square footage requirements prescribed in subsection C of this section or modify the amount of monies awarded to cure the square footage deficiency pursuant to this section for particular school districts based on extraordinary circumstances for any of the following considerations: 1. The number of pupils served by the school district. 2. Geographic factors. 3. Grade configurations other than those prescribed in subsection C of this section. E. In measuring the square footage per pupil requirements of subsection C of this section, the board shall: 1. Use the projected one hundredth day average daily membership for the current school year. 2. For each school, use the lesser of either: (a) Total gross square footage. (b) Student capacity multiplied by the appropriate square footage per pupil prescribed by subsection C of this section. 3. Consider the total space available in all schools in use in the school district, except that the board shall allow an exclusion of the square footage for certain schools and the pupils within the schools' boundaries if the school district demonstrates to the board's satisfaction unusual or excessive busing of pupils or unusual attendance boundary changes between schools. 4. Compute the gross square footage of all buildings by measuring from exterior wall to exterior wall. Square footage used solely for district administration, storage of vehicles and other nonacademic purposes shall be excluded from the net square footage. 5. Include all portable and modular buildings. 6. Include in the net square footage new construction funded wholly or partially by the board based on the square footage funded by the board. If the new construction is to exceed the square footage funded by the board, the excess square footage shall not be included in the net square footage if any of the following applies: (a) The excess square footage was constructed before July 1, 2002 or funded by a class B bond, impact aid revenue bond or capital outlay override approved by the voters after August 1, 1998 and before June 30, 2002 or funded from unrestricted capital outlay expended before June 30, 2002. (b) The excess square footage of new school facilities does not exceed twenty-five percent of the minimum square footage requirements pursuant to subsection C of this section. (c) The excess square footage of expansions to school facilities does not exceed twenty-five percent of the minimum square footage requirements pursuant to subsection C of this section. 7. Exclude square footage built under a developer agreement according to section 15-342, paragraph 33 until the board provides funding for the square footage under section 41-5741, subsection O. 8. Include square footage that a school district has leased to another entity. F. The board shall adopt rules establishing minimum school facility adequacy guidelines. The guidelines shall provide the minimum quality and quantity of school buildings and facilities and equipment necessary and appropriate to enable pupils to achieve the academic standards pursuant to section 15-203, subsection A, paragraphs 12 and 13 and sections 15-701 and 15-701.01. At a minimum, the board shall address all of the following in developing these guidelines: 1. School sites. 2. Classrooms. 3. Libraries and media centers, or both. 4. Cafeterias. 5. Auditoriums, multipurpose rooms or other multiuse space. 6. Technology. 7. Transportation. 8. Facilities for science, arts and physical education. 9. Other facilities and equipment that are necessary and appropriate to achieve the academic standards prescribed pursuant to section 15-203, subsection A, paragraphs 12 and 13 and sections 15-701 and 15-701.01. 10. Appropriate combinations of facilities or uses listed in this section. G. The board may convene subcommittees as needed on specific issues, including school facility safety standards. Notwithstanding any other law, a school district that receives grant monies from the building renewal grant fund established by section 41-5731 or monies from the new school facilities fund established by section 41-5741 shall consider school facility safety standards when completing approved projects or constructing new school facilities with monies received from those funds. H. The board shall consider the facilities and equipment of the schools with the highest academic productivity scores, as prescribed in section 41-5702, subsection A, paragraph 6, subdivision (d), and the highest parent quality ratings in the establishment of the guidelines. I. The board may consider appropriate combinations of facilities or uses in assessing and curing existing deficiencies pursuant to section 41-5702, subsection A, paragraph 1 and in certifying plans for new school facilities pursuant to section 41-5702, subsection C, paragraph 2. J. If the board makes any changes to the minimum adequacy requirements prescribed in this section, the board shall provide a fiscal impact statement of the effect of the proposed changes to the joint committee on capital review for review. K. For the purposes of this section, "student capacity" means the capacity adjusted to include any additions to or deletions of space, including modular or portable buildings at the school. The board shall determine the student capacity for each school in conjunction with each school district, recognizing each school's allocation of space as of July 1, 1998, to achieve the academic standards prescribed pursuant to section 15-203, subsection A, paragraphs 12 and 13 and sections 15-701 and 15-701.01. 41-5721. Emergency deficiencies correction fund; definition A. The emergency deficiencies correction fund is established consisting of monies transferred from the new school facilities fund established by section 41-5741. The division shall administer the emergency deficiencies correction fund and distribute monies in accordance with the rules of the division to school districts for emergency purposes. The division shall not transfer monies from the new school facilities fund if the division, in conjunction with the school facilities oversight board, determines that the transfer will affect, interfere with, disrupt or reduce any capital projects that the board has approved pursuant to section 41-5741. The division shall transfer to the emergency deficiencies correction fund the amount necessary each fiscal year to fulfill the requirements of this section. Within thirty days after transferring monies to the emergency deficiencies correction fund, the division shall report to the director of the joint legislative budget committee and the director of the governor's office of strategic planning and budgeting the amount and source of the transfer. Monies in the emergency deficiencies correction fund are continuously appropriated and are exempt from the provisions of section 35-190 relating to lapsing of appropriations. B. If the division determines that there are insufficient monies in the emergency deficiencies correction fund to correct an emergency, the school district may correct the emergency pursuant to section 15-907. C. If a school district has an emergency, the school district shall apply to the division for funding for the emergency. The school district's application shall disclose any insurance or building renewal monies available to the school district to pay for the emergency. Before applying to the division for funding for the emergency, the school district governing board shall issue an emergency declaration or resolution to be eligible for monies from the emergency deficiencies correction fund. D. The division staff shall acknowledge receipt of the school district's application for emergency deficiencies funding in writing within five business days after receiving the application. The division staff shall include in the written acknowledgement of receipt to the school district any investigative, study or informational requirements from the school district, along with an estimated timeline to complete the requirements, necessary for the division staff to make a decision regarding funding. E. The board shall review all policies and procedures that the division develops to administer this section. F. For the purposes of this section, "emergency": 1. Means a serious need for materials, services or construction or expenses that exceeds the school district's adopted budget for the current fiscal year and that seriously threatens the functioning of the school district, the preservation or protection of property or public health, welfare or safety. 2. Includes all of the following: (a) A situation that threatens life services such as adequate water supply, energy and wastewater. (b) A situation in which a school district is under orders from an authority having jurisdiction for an unsafe environment such as the department of environmental quality, the occupational safety and health administration or the state fire marshal. (c) The school district receives a professional and certified assessment showing that one or more facilities or systems are structurally unsafe and directly impact the functions of the school district with no alternative option available. 41-5731. Building renewal grant fund; rules; annual report; definitions A. The building renewal grant fund is established consisting of monies appropriated to the fund by the legislature. The division shall administer the fund and distribute monies to school districts for the purpose of maintaining the adequacy of existing school facilities. Monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations. B. The division shall distribute monies from the building renewal grant fund based on grant requests from school districts to fund primary building renewal projects. Project requests shall be prioritized by the division, with priority given to school districts that have provided routine preventive maintenance on the facility. A school district must submit a preventive maintenance plan to the division to be eligible to receive monies from the building renewal grant fund. The division shall approve only projects that will be completed within twelve months, unless similar projects on average take longer to complete. A grant issued under this section expires twelve months after the grant request is approved unless the division issues an extension, except that if the division approves a project and determines that similar projects on average take longer than twelve months to complete, the division shall extend the grant expiration date based on the average amount of time that similar projects take to complete. The division shall establish a process by which a school district may request an extension under this subsection. On expiration of a grant, a school district shall return any building renewal grant fund monies that the school district has not spent to the division for deposit in the building renewal grant fund. The division may spend monies from the fund for assessments to determine whether a grant from the fund is warranted under this section. C. School districts that receive monies from the building renewal grant fund shall use these monies on projects for buildings or any part of a building in the division's database for any of the following: 1. Major renovations and repairs to a building that is used for student instruction or other academic purposes. 2. Upgrading systems and areas that will maintain or extend the useful life of the building. 3. Infrastructure costs.