SB1040 - 531R

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

Section 1. Heading change

The article heading of title 15, chapter 13, article 11, Arizona Revised Statutes, is changed from "Mathematics, Science and Special Education Teacher Student Loan Program" to "Arizona teacher student loan program".

Sec. 2. Section 15-1781, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1781. Definitions

In this article, unless the context otherwise requires:

1. "Commission" means the commission for postsecondary education.

2. "Low‑income school" means a public school in this state at which sixty percent or more of the students are eligible for free or reduced price lunches under the national school lunch and child nutrition acts (42 United States code sections 1751 through 1785).

2. 3. "Qualified applicant" or "qualified student" means an Arizona resident who is a citizen or legal resident of the United States or who is otherwise lawfully present in the United States, who attends a qualifying postsecondary institution and, if attending a university under the jurisdiction of the Arizona board of regents, who qualifies for in‑state tuition pursuant to section 15-1802.

3. 4. "Qualifying postsecondary institution" means a regionally or nationally accredited public or private postsecondary educational institution in this state.

5. "Rural school" means a public school in this state that is located in a county with a population of less than three hundred thousand persons. END_STATUTE

Sec. 3. Section 15-1782, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1782. Arizona teacher student loan program; requirements; report

A. The Arizona teacher student loan program is established within the commission for postsecondary education to support the recruitment of teachers in public schools in this state. The commission may grant loans from the mathematics, science and special education Arizona teacher student loan fund established by section 15‑1784 to defray the costs of tuition, instructional materials and mandatory fees of the education of students who are pursuing either a teaching degree or a teaching certificate through an alternative teacher CERTIFICATION program at a qualifying postsecondary institution and who are deemed qualified by the commission to receive these loans. A student who is in an alternative teacher certification program after obtaining a bachelor's degree is not disqualified from eligibility for a loan issued pursuant to this article. Loans shall be granted on such terms and conditions as may be imposed by the commission and shall be distributed on a first come, first served first-come, first-served basis.

B. The commission shall grant loans to qualified applicants who agree to provide instruction in the area of mathematics, science or special education in a public school in this state or in elementary education in a public school that is located in a geographic area in this state that is experiencing a shortage of teachers, as determined by the state board of education. The board shall allocate no more than twenty‑five per cent of the annual amount appropriated for loans to applicants who agree to provide instruction in elementary education to provide instruction in a public school in this state that is a low‑income school, a rural school or a school that is located on an indian reservation. the commission shall allocate at least forty percent of the annual amount appropriated for loans issued pursuant to this article to applicants who agree to provide instruction in a public school that is a low‑income school, a rural school or a school that is located on an indian reservation.

C. The loans granted by the commission shall be used to cover the costs of tuition and mandatory fees for each loan recipient and may also defray the cost of instructional materials, but shall not exceed seven thousand dollars each year, excluding all grants, scholarships and tuition benefits such as military, tribal and employee grants, scholarships and benefits.

D. The commission shall adopt policies for screening qualified applicants based on ability and financial need, including requiring all applicants to complete a free application for federal student federal aid.

E. The commission shall grant loans on the terms and conditions the commission imposes. The commission shall establish procedures for the timely repayment of loans plus interest at a rate determined by the commission. The commission is responsible for the collection of loan repayments.

F. The commission may partner with qualifying postsecondary institutions to administer these loans. The commission shall provide initial public notice of the availability of the loans and collect the application forms directly from each qualified applicant. The commission shall forward a request for verification of attendance, satisfactory academic progress, financial need and enrollment in a qualified program to the institution.

G. On or before December 1 of each year, the commission shall submit an approved report to the governor, the speaker of the house of representatives, the president of the senate and the joint legislative budget committee. The commission shall provide a copy of this report to the secretary of state. The report shall include the number of applicants, the number of loan recipients, the qualifying postsecondary institution each loan recipient attends, the name of the school at which each loan recipient is employed, the number of good cause repayment exceptions granted by the commission, the reason for each good cause exception granted and teacher retention data. The commission shall collect and maintain data on the retention of mathematics, science and special education teachers who received loans pursuant to this article. The commission shall collect this data for at least five years after each loan recipient completes the recipient's service commitment. END_STATUTE

Sec. 4. Section 15-1783, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1783. Arizona teacher student loans; interest; obligations; repayment; authority of attorney general

A. Each applicant who is approved for a loan by the commission may be granted a loan for a period of up to five years.

B. The commission, on behalf of this state, shall enter into a written contract with the qualified student. The contract shall set forth the methods and terms of repayment by the loan recipient to this state and shall be on terms and conditions and in a form provided by the commission. The contract shall provide for the following:

1. The loan recipient shall begin the service commitment providing instruction in the area of mathematics, science or special education in a public school in this state or instruction in elementary education in a public school that is located in a geographic area in this state that is experiencing a shortage of teachers, as determined by the state board of education, a public school in this state that is a low‑income school, a rural school or a school that is located on an indian reservation within one calendar year after attaining a bachelor's degree completing a teaching degree or an alternative teacher certification program at a qualifying postsecondary institution. The service commitment shall be full‑time as determined by the commission and requires one year of service for each year of loan support plus one additional year of service.

2. If the loan recipient engages in postgraduate studies without a lapse of more than one calendar year following the completion of the loan recipient's bachelor's teaching degree or alternative teacher certification program at a qualifying postsecondary institution, the loan recipient shall begin the service commitment required under paragraph 1 of this subsection within one calendar year after completing postgraduate studies.

3. If the loan recipient is inducted into military service, or for any other cause beyond the loan recipient's control deemed sufficient by the commission is unable to begin the service commitment required under paragraph 1 of this subsection within one calendar year after completing a bachelor's teaching degree and, an alternative teacher certification program or any graduate studies, the loan recipient shall begin the service commitment required under paragraph 1 of this subsection within one calendar year after completing the required military service or the termination of any other cause.

4. If the loan recipient fulfills the service commitment required under paragraph 1 of this subsection in a public school in this state or while completing military service resulting from induction, the loan recipient's indebtedness to this state may be discharged in one of the following ways:

(a) One year of full‑time service required under paragraph 1 of this subsection for each year of loan support plus one additional year of service.

(b) Repayment to this state of the total loan amount for each year of support with interest at the rate prescribed in subsection C of this section.

5. If the loan recipient fails to complete the required course of study teaching degree or alternative teacher certification program, if the course of study teaching degree or alternative teacher certification program is interrupted by one academic year or more for a cause or causes not resulting from induction into military service or any other cause beyond the loan recipient's control deemed sufficient by the commission or if the loan recipient fails to fully discharge the service commitment required under paragraph 1 of this subsection, except for delays resulting from an excusable cause as prescribed in this section, the amount of the loan not repaid or fully discharged shall be due and payable with interest at the rate prescribed in subsection C of this section. The commission may extend the time of payment over a period not exceeding fifteen years and shall not require payment of interest during the existence of any excusable cause as prescribed in this section.

6. If the loan recipient does not begin the service commitment required under paragraph 1 of this subsection within the time prescribed in this section but paid an agreed part of the loan, the commission may allow the loan recipient to discharge the balance of the obligation by subsequent teaching in this state.

7. If the loan recipient dies during the period of the loan recipient's education or practice as a teacher, the loan recipient's obligation to this state under this article ceases.

8. The loan recipient may choose at any time to provide a different category of service commitment prescribed in paragraph 1 of this subsection without violating the contract, unless the contract requires the loan recipient to provide instruction in the area of mathematics or science.

9. If the loan recipient begins the service commitment required under paragraph 1 of this subsection in a geographic area in this state that is experiencing a shortage of teachers, as determined by the state board of education, but the state board of education low‑income school or a rural school in this state and the commission subsequently determines that geographic area is no longer experiencing a shortage of teachers the school no longer qualifies as low‑income or rural, the loan recipient may discharge the balance of the obligation by completing the service commitment in the geographic area public school where the loan recipient began the service commitment.

C. The loan recipient shall repay the full amount borrowed at an interest rate of at least seven per cent percent.

D. On receipt of supporting documentation, the commission for good cause shown may defer the loan recipient's service commitment or repayment obligation or may enter into repayment arrangements with the loan recipient or allow service that is equivalent to full-time service if the commission determines that this action is justified after a review of the individual's circumstances. At the discretion of the commission, the commission may allow service by teaching in another area of recognized need in this state that is not specified in the qualified student's contract, but only following prior written approval by the commission.

E. The attorney general may commence whatever actions are necessary to enforce the contract and achieve repayment of loans provided by the commission pursuant to this article. END_STATUTE

Sec. 5. Section 15-1784, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1784. Arizona teacher student loan fund

A. The mathematics, science and special education Arizona teacher student loan fund is established. All monies appropriated to carry out the purposes of sections 15‑1782 and 15‑1783 shall be deposited in the fund, and all payments of principal and interest that are received by the commission shall be deposited, pursuant to sections 35‑146 and 35‑147, in the fund.

B. Monies in the fund are continuously appropriated for use by the commission. The commission may retain up to ten per cent percent of the amount deposited each fiscal year in the fund for the purposes of administering the loan program established by this article and may use the interest deposited in the fund to cover the administrative costs of the loan repayment responsibilities established by this article.

C. On notice from the commission, 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 fund. END_STATUTE

Sec. 6. Section 15-1785, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1785. Program termination

The program established by this article ends on July 1, 2017 2025 pursuant to section 41‑3102. END_STATUTE

Sec. 7. Section 15-1851, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1851. Commission for postsecondary education; purpose; report; members; terms; powers and duties; compensation; quorum; immunity; definition

A. The commission for postsecondary education is established and shall administer the applicable programs identified under section 1203 of the higher education act amendments of 1998 (P.L. 105‑244), including the leveraging educational assistance partnership program, the federal family education loan program and the Paul Douglas teacher scholarships program, and shall supervise the state guarantee agency under the higher education act amendments of 1998.

B. In addition to the responsibilities prescribed in subsection A of this section, the commission shall:

1. Provide a forum to public and private postsecondary education institutions for discussion of issues of mutual interest, including the following:

(a) The postsecondary needs of unserved and underserved individuals in this state.

(b) The resources of public and private institutions, organizations and agencies that are located in this state and that are capable of providing postsecondary education opportunities.

(d) Cooperative comprehensive instructional and capital planning.

2. Provide reports pursuant to this subsection on discussions of issues of mutual interest.

3. Coordinate and promote collaborative studies on issues of mutual interest to public and private postsecondary education institutions.

4. Compile and disseminate information to the public regarding postsecondary education opportunities in this state.

5. Prepare an annual report that summarizes the results of the commission's activities prescribed in this section and section 15‑1852. The annual report shall be submitted to the speaker of the house of representatives, the president of the senate, the governor and the Arizona state library, archives and public records by December 28.

6. Administer the mathematics, science and special education Arizona teacher student loan program established by chapter 13, article 11 of this title.

C. The commission consists of the executive director of the Arizona board of regents, the executive director of the state board for private postsecondary education and the following additional members who shall be are appointed by the governor pursuant to section 38‑211:

1. Two members who hold senior executive or managerial positions in a university under the jurisdiction of the Arizona board of regents.

2. Two members who hold senior executive or managerial positions in a community college district, one representing a community college district in a county with a population of five hundred thousand persons or more and one representing a community college district in a county with a population of less than five hundred thousand persons.

3. Two members who hold senior executive or managerial positions in private postsecondary institutions of higher education that are licensed under title 32, chapter 30, that are located in this state, that offer bachelor bachelor's or higher degrees and that are accredited by a regional accreditation agency approved by the United States department of education.

4. Two members who hold senior executive or managerial positions in private postsecondary institutions of higher education that are licensed under title 32, chapter 30, that are located in this state, that offer vocational education programs and that are accredited by a national accreditation agency approved by the United States department of education.

5. One member who holds a senior executive or managerial position in a private cosmetology school that is licensed under title 32, chapter 5, that is located in this state, that offers cosmetology programs approved by the board of cosmetology and that is accredited by a national accreditation agency approved by the United States department of education.

6. One member who holds a senior executive or managerial position in an institution that is licensed under title 32, chapter 23 or under 14 Code of Federal Regulations part 147, that offers vocational education programs at the postsecondary level, that is located in this state and that is not an institution that is qualified under any other category.

7. One member who has held a senior executive or managerial level position in commerce or industry in this state for at least three years before the member's appointment and who is not qualified to serve under any other category.

8. Two members who hold senior executive or managerial positions in the high school education system in this state.

9. One member who is an owner, operator or administrator of a charter school in this state.

D. Members of the commission appointed pursuant to subsection C, paragraphs 1 through 9 of this section shall serve four year four-year terms. Appointed members of the commission shall be residents of this state. Appointed members of the commission at all times during their terms shall continue to be eligible for appointment under the category that they were appointed to represent. Terms of appointed members of the commission begin on the third Monday in January. No appointed member of the commission may serve more than two consecutive terms.

E. The executive director of the Arizona board of regents and the executive director of the state board for private postsecondary education serve as members of the commission during their respective terms of office and are not eligible to vote with respect to the commission's review of any postsecondary institution.

F. Members appointed pursuant to subsection C, paragraphs 1 through 9 of this section are eligible to receive compensation pursuant to section 38‑611 for each day spent in the performance of commission duties and may be reimbursed for expenses properly incurred in connection with the attendance at meetings or hearings of the commission.

G. The governor shall appoint a chairman from among the members of the commission who shall serve a one year one-year term that begins on the third Monday in January.

H. A majority of the members of the commission constitute a quorum for the transaction of commission business. The vote of a majority of the quorum constitutes authority for the commission to act.

I. Members of the commission are immune from personal liability with respect to all actions that are taken in good faith and within the scope of the commission's authority.

J. For the purposes of this section, "community college district" means a community college district that is established pursuant to sections 15‑1402 and 15‑1403 or section 15‑1402.01 and that is a political subdivision of this state. END_STATUTE

Sec. 8. Emergency

This act is an emergency measure that is necessary to preserve the public peace, health or safety and is operative immediately as provided by law.