HB2530 - 511R

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

Section 1. Section 15-2402, Arizona Revised Statutes, is amended to read:

START_STATUTE15-2402. Arizona empowerment scholarship accounts; funds

A. Arizona empowerment scholarship accounts are established to provide options for the education of students in this state.

B. To enroll a qualified student for an empowerment scholarship account, the parent of the qualified student must sign an agreement to do all of the following:

1. Provide an education for the qualified student in at least the subjects of reading, grammar, mathematics, social studies and science.

2. Not enroll the qualified student in a school district or charter school and release the school district from all obligations to educate the qualified student. This paragraph does not relieve the school district or charter school that the qualified student previously attended from the obligation to conduct an evaluation pursuant to section 15‑766.

3. Not accept a scholarship from a school tuition organization pursuant to title 43 concurrently with an empowerment scholarship account for the qualified student in the same year a parent signs the agreement pursuant to this section.

4. Use the money deposited in the qualified student's Arizona empowerment scholarship account only for the following expenses of the qualified student:

(a) Tuition or fees at a qualified school.

(b) Textbooks required by a qualified school.

(c) Educational therapies or services for the qualified student from a licensed or accredited practitioner or provider, including licensed or accredited paraprofessionals or educational aides.

(d) Tutoring services provided by a tutor accredited by a state, regional or national accrediting organization.

(e) Curriculum.

(f) Tuition or fees for a nonpublic online learning program.

(g) Fees for a nationally standardized norm-referenced achievement test, advanced placement examinations or any exams related to college or university admission.

(h) Contributions to a qualified tuition program established pursuant to 26 United States Code section 529 for the benefit of the qualified student.

(i) Tuition or fees at an eligible postsecondary institution.

(j) Textbooks required by an eligible postsecondary institution.

(k) Fees for management of the empowerment scholarship account by firms selected by the treasurer.

(l) Services provided by a public school, including individual classes and extracurricular programs.

5. Not file an affidavit of intent to homeschool pursuant to section 15‑802, subsection B, paragraph 2 or 3.

6. Not use monies deposited in the qualified student's account for any of the following:

(a) Computer hardware or other technological devices.

(b) Transportation of the pupil.

C. In exchange for the parent's agreement pursuant to subsection B of this section, the department shall transfer from the monies that would otherwise be allocated to a recipient's prior school district to the treasurer for deposit into an Arizona empowerment scholarship account an amount that is equivalent to ninety per cent of the base support level prescribed in section 15‑943 for that particular student. The department may retain up to five per cent of the base support level prescribed in section 15‑943 for each student with an empowerment scholarship account for deposit in the department of education empowerment scholarship account fund established in subsection D of this section, out of which the department shall transfer one per cent of the base support level prescribed in section 15‑943 for each student with an empowerment scholarship account to the state treasurer for deposit in the state treasurer empowerment scholarship account fund established in subsection E of this section.

D. The department of education empowerment scholarship account fund is established consisting of monies retained by the department pursuant to subsection C of this section. The department shall administer the fund. Monies in the fund are subject to legislative appropriation. Monies in the fund shall be used for the department's costs in administering empowerment scholarship accounts under this chapter. Monies in the fund are exempt from the provisions of section 35‑190 relating to lapsing of appropriations. If the number of empowerment scholarship accounts significantly increases after fiscal year 2012‑2013, the department may request an increase in the amount appropriated to the fund in any subsequent fiscal year in the budget estimate submitted pursuant to section 35‑113.

E. The state treasurer empowerment scholarship account fund is established consisting of monies transferred by the department to the state treasurer pursuant to subsection C of this section. The state treasurer shall administer the fund. Monies in the fund shall be used for the state treasurer's costs in administering the empowerment scholarship accounts under this chapter. If the number of empowerment scholarship accounts significantly increases after fiscal year 2013‑2014, the state treasurer may request an increase in the amount appropriated to the fund in any subsequent fiscal year in the budget estimate submitted pursuant to section 35‑113. Monies in the fund are subject to legislative appropriation. Monies in the fund are exempt from the provisions of section 35‑190 relating to lapsing of appropriations.

F. A parent must renew the qualified student's empowerment scholarship account on an annual basis and annually have the student take a nationally standardized norm‑referenced achievement test, an advanced placement examination or any examination related to college or university admissions. The department of education shall make available to empowerment scholarship account recipients a list of achievement tests that satisfy the requirements of this subsection. The department shall annually report on its website the graduation rate of students who are enrolled in empowerment scholarship accounts. Students with an individualized education program shall not be included in the testing requirements or graduation rates prescribed by this subsection unless the disability is classified as a developmental delay, emotional disability, mild intellectual disability, specific learning disability, speech/language impairment or other health impairment, as those terms are defined in section 15‑761. Notwithstanding any changes to the student's multidisciplinary evaluation team plan, a student who has previously qualified for an empowerment scholarship account shall remain eligible to apply for renewal until the student finishes high school.

G. A signed agreement under this section constitutes school attendance required by section 15‑802.

H. A qualified school or a provider of services purchased pursuant to subsection B, paragraph 4 of this section may not share, refund or rebate any Arizona empowerment scholarship account monies with the parent or qualified student in any manner.

I. On the qualified student's graduation from a postsecondary institution or after any period of four consecutive years after high school graduation in which the student is not enrolled in an eligible postsecondary institution, the qualified student's Arizona empowerment scholarship account shall be closed and any remaining funds shall be returned to the state.

J. Monies received pursuant to this article do not constitute taxable income to the parent of the qualified student. END_STATUTE

Sec. 2. Section 15-2403, Arizona Revised Statutes, is amended to read:

START_STATUTE15-2403. Empowerment scholarship accounts; administration; audit; rules

A. The treasurer may contract with private financial management firms to manage Arizona empowerment scholarship accounts with the supervision of the treasurer.

B. The department shall conduct or contract for annual audits of a random sample of empowerment scholarship accounts to ensure compliance with section 15‑2402, subsection B, paragraph 4. The department may also conduct or contract for audits of empowerment scholarship accounts as needed to ensure compliance with section 15‑2402, subsection B, paragraph 4.

C. The department shall conduct or contract for an annual survey to measure the satisfaction of parents of students who are enrolled in an empowerment scholarship account.

C. D. The department may remove any parent or qualified student from eligibility for an Arizona empowerment scholarship account and shall notify the treasurer. A parent may appeal the department's decision pursuant to title 41, chapter 6, article 10.

D. E. The department may refer cases of substantial misuse of monies to the attorney general for investigation if the department obtains evidence of fraudulent use of an account.

E. F. The department shall make quarterly transfers of the amount calculated pursuant to section 15‑2402, subsection C to the treasurer for deposit into the empowerment scholarship account of each qualified student.

F. G. The department shall determine a period that is between July 1 and May 1 of each year during which it will accept applications for the following fiscal year. On or before May 30 of each year, the department shall furnish to the joint legislative budget committee an estimate of the amount required to fund empowerment scholarship accounts for the following fiscal year. The department shall include in its budget request for the following fiscal year the amount estimated in section 15‑2402, subsection C for each qualified student.

G. H. The department may adopt rules and policies necessary for the administration of empowerment scholarship accounts. END_STATUTE