Assigned to ED FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
FACT SHEET FOR S.B. 1374
full-time equivalent student; expenditure limitation
Purpose
Redefines full-time equivalent student for the calculation of a community college district's
(CCD's) expenditure limitation (expenditure limit) beginning in FY 2023. Modifies the amounts
withheld from the state aid of a CCD that exceeds the expenditure limit in FYs 2023 and 2024.
Background
Statute directs the Legislature to determine a CCD's state aid and expenditure limit each
fiscal year according to prescribed formulas and adjustments based on the CCDs full-time student
equivalent (FTSE) count. The FTSE calculation method depends on if the FTSE count will be used
for the state aid calculation or the expenditure limit calculation (A.R.S. Title 15, Chapter 12,
Article 4). If a CCD exceeds the expenditure limit, the State Treasurer must withhold statutorily
prescribed amounts from the CCD's state aid allocation (A.R.S. § 41-1279.07).
The FTSE used to determine a CCD's expenditure limit is equal to the sum of: 1) the total
of basic actual, additional short-term and open entry, open exit and skill center full-time equivalent
students, calculated as prescribed and multiplied by 0.3; and 2) the number of full-time equivalent
students enrolled in ADE-approved career and technical education courses. Full-time equivalent
student means student enrollment for 15 community college semester credit units per semester
(A.R.S. §§ 15-1401 and 15-1466.01).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation.
Provisions
1. Redefines, retroactive to July 1, 2022, full-time equivalent student as student enrollment for 12
community college semester credit units per semester for the purposes of determining the
FTSE for the CCD expenditure limitation.
2. Requires, retroactive to July 1, 2021, the state aid for FYs 2023 and 2024 to be withheld in the
following amounts from a CCD that exceeds its expenditure limit:
a) $5,000, if the excess expenditures are less than five percent;
b) $15,000, if the excess expenditures are at least 5 percent and under 10 percent of the limit;
c) $20,000, if the excess expenditures are at least 10 percent and under 12 percent of the limit;
and
d) an amount equal to the lesser of one-third of the allocation or five times the excess
expenditures, if excess expenditures are at least 12 percent of the limit.
3. Applies the modified FTSE definition to fiscal years beginning FY 2023. FACT SHEET
S.B. 1374
Page 2
4. Makes technical changes.
5. Becomes effective on the general effective date, with retroactive provisions as noted.
Prepared by Senate Research
January 28, 2022
LB/slp