SB1467 - 532R

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

Section 1. Section 15-2401, Arizona Revised Statutes, as amended by Laws 2016, chapter 112, section 1 and chapter 353, section 1, is amended to read:

START_STATUTE15-2401. Definitions

In this chapter, unless the context otherwise requires:

1. "Annual education plan" means an initial individualized evaluation and subsequent annual reviews that are developed for a qualified student who meets the criteria specified in paragraph 7, subdivision (a), item (i), (ii) or (iii) of this section to determine ongoing annual eligibility through the school year in which the qualified student reaches twenty‑two years of age and whether the student may be eligible pursuant to section 36‑2981 and should be referred for eligibility determination.

2. "Curriculum" means a complete course of study for content areas or grade levels, including any supplemental materials required by the curriculum, approved by the department.

3. "Department" means the department of education.

4. "Eligible postsecondary institution" means a community college as defined in section 15‑1401, a university under the jurisdiction of the Arizona board of regents or an accredited private postsecondary institution.

5. "Parent" means a resident of this state who is the parent or legal guardian of a qualified student.

6. "Qualified school" means a nongovernmental primary or secondary school or a preschool for pupils with disabilities that is located in this state and that does not discriminate on the basis of race, color or national origin.

7. "Qualified student" means a resident of this state who:

(a) Is any of the following:

(i) Identified as having a disability under section 504 of the rehabilitation act of 1973 (29 United States Code section 794).

(ii) Identified by a school district or by an independent third party pursuant to section 15‑2403, subsection I as a child with a disability as defined in section 15‑731 or 15‑761.

(iii) A child with a disability who is eligible to receive services from a school district under section 15‑763.

(iv) Attending a school or school district that has been assigned a letter grade of D or F pursuant to section 15‑241 or who is currently eligible to attend kindergarten and who resides within the attendance boundary of a school that has been assigned a letter grade of D or F pursuant to section 15‑241.

(v) A previous recipient of a scholarship issued pursuant to section 15‑891 or this section, unless the qualified student's parent has been removed from eligibility in the program for failure to comply pursuant to section 15‑2403, subsection C.

(vi) A child of a parent who is a member of the armed forces of the United States and who is on active duty or was killed in the line of duty. A child who meets the requirements of this item is not subject to subdivision (b) of this paragraph.

(vii) A child who is a ward of the juvenile court and who is residing with a prospective permanent placement pursuant to section 8‑862 and the case plan is adoption or permanent guardianship.

(viii) A child who was a ward of the juvenile court and who achieved permanency through adoption or permanent guardianship.

(ix) A child who is the sibling of a current or previous empowerment scholarship account recipient or of an eligible qualified student who accepts the terms of and enrolls in the empowerment scholarship program.

(x) A child who resides within the boundaries of an Indian reservation in this state as determined by the department of education or a tribal government.

(xi) A child of a parent who is legally blind pursuant to section 41‑1973, subsection C or deaf or hard of hearing pursuant to section 36‑1941.

(b) And, except as provided in subdivision (a), item (vi) of this paragraph, who meets any of the following requirements:

(i) Attended a governmental primary or secondary school as a full‑time student as defined in section 15‑901 for at least the first one hundred days of the prior fiscal year and who transferred from a governmental primary or secondary school under a contract to participate in an empowerment scholarship account. First, second and third grade students who are enrolled in Arizona online instruction must receive four hundred hours of logged instruction to be eligible pursuant to this item. Fourth, fifth and sixth grade students who are enrolled in Arizona online instruction must receive five hundred hours of logged instruction to be eligible pursuant to this item. Seventh and eighth grade students who are enrolled in Arizona online instruction must receive five hundred fifty hours of logged instruction to be eligible pursuant to this item. High school students who are enrolled in Arizona online instruction must receive five hundred hours of logged instruction to be eligible pursuant to this item.

(ii) Previously participated in the empowerment scholarship account program.

(iii) Received a scholarship under section 43‑1504 or 43‑1505 and who continues to attend a qualified school if the student attended a governmental primary or secondary school as a full‑time student as defined in section 15‑901 for at least ninety days of the prior fiscal year or one full semester prior to attending a qualified school.

(iv) Was eligible for an Arizona scholarship for pupils with disabilities and received monies from a school tuition organization pursuant to section 43‑1505 or received an Arizona scholarship for pupils with disabilities but did not receive monies from a school tuition organization pursuant to section 43‑1505 and who continues to attend a qualified school if the student attended a governmental primary or secondary school as a full‑time student as defined in section 15‑901 for at least ninety days of the prior fiscal year or one full semester prior to attending a qualified school.

(vi) Has not previously attended a governmental primary or secondary school but is currently eligible to enroll in a program for preschool children with disabilities in this state.

8. "Treasurer" means the office of the state treasurer. END_STATUTE

Sec. 2. Section 15-2401, Arizona Revised Statutes, as amended by Laws 2017, chapter 139, section 1, is amended to read:

START_STATUTE15-2401. Definitions; conditional enactment

a. In this chapter, unless the context otherwise requires:

1. "Curriculum" means a complete course of study for content areas or grade levels, including any supplemental materials required by the curriculum approved by the department.

2. "Department" means the department of education.

3. "Eligible postsecondary institution" means a community college as defined in section 15‑1401, a university under the jurisdiction of the Arizona board of regents or an accredited private postsecondary institution.

4. "Low‑income student" means a child who is or was a ward of the juvenile court pursuant to paragraph 7, subdivision (a), item (viii) or (ix) of this section or a child who is a dependent of a family whose federal adjusted gross income as reflected on the last state income tax return that was required to be filed does not exceed two hundred fifty percent of the federal poverty guidelines for that same year.

5. "Parent" means a resident of this state who is the parent or legal guardian of a qualified student.

7. "Qualified student" means a resident of this state who:

(a) Is any of the following:

(i) Identified as having a disability under section 504 of the rehabilitation act of 1973 (29 United States Code section 794).

(ii) Identified by a school district or by an independent third party pursuant to section 15‑2403, subsection I as a child with a disability as defined in section 15‑731 or 15‑761.

(iii) A child with a disability who is eligible to receive services from a school district under section 15‑763.

(iv) Attending a school or school district that has been assigned a letter grade of D or F pursuant to section 15‑241.

(v) A child who is currently eligible to attend kindergarten and who resides within the attendance boundary of a school or school district that has been assigned a letter grade of D or F pursuant to section 15‑241.

(vi) A previous recipient of a scholarship issued pursuant to section 15‑891 or this section, unless the qualified student's parent has been removed from eligibility in the program for failure to comply pursuant to section 15‑2403, subsection C.

(vii) A child of a parent who is a member of the armed forces of the United States and who is on active duty or was killed in the line of duty. A child who meets the requirements of this item is not subject to subdivision (b) of this paragraph.

(viii) A child who is a ward of the juvenile court and who is residing with a prospective permanent placement pursuant to section 8‑862 and the case plan is adoption or permanent guardianship.

(ix) A child who was a ward of the juvenile court and who achieved permanency through adoption or permanent guardianship.

(x) A child who is the sibling of a current or previous empowerment scholarship account recipient or of an eligible qualified student who accepts the terms of and enrolls in an empowerment scholarship account.

(xi) A child who resides within the boundaries of an Indian reservation in this state as determined by the department of education or a tribal government.

(xii) A child of a parent who is legally blind or is deaf or hard of hearing as defined in section 36‑1941.

(xiii) Beginning in the 2017‑2018 school year, a child who currently attends or is eligible to attend a public school in a kindergarten program or any of grades one, six and nine.

(xiv) Beginning in the 2018‑2019 school year, a child who currently attends or is eligible to attend a public school in a kindergarten program or any of grades one, two, six, seven, nine and ten.

(xv) Beginning in the 2019‑2020 school year, a child who currently attends or is eligible to attend a public school in a kindergarten program or any of grades one through three and grades six through eleven.

(xvi) Beginning in the 2020‑2021 school year, a child who currently attends or is eligible to attend a public school in a kindergarten program or any of grades one through twelve.

(b) And, except as provided in subdivision (a), item (vii) of this paragraph, who meets any of the following requirements:

(i) Attended a governmental primary or secondary school as a full‑time student as defined in section 15‑901 for at least one hundred days of the prior fiscal year and who transferred from a governmental primary or secondary school under a contract to participate in an empowerment scholarship account. First, second and third grade students who are enrolled in Arizona online instruction must receive four hundred hours of logged instruction to be eligible pursuant to this item. Fourth, fifth and sixth grade students who are enrolled in Arizona online instruction must receive five hundred hours of logged instruction to be eligible pursuant to this item. Seventh and eighth grade students who are enrolled in Arizona online instruction must receive five hundred fifty hours of logged instruction to be eligible pursuant to this item. High school students who are enrolled in Arizona online instruction must receive five hundred hours of logged instruction to be eligible pursuant to this item. The department may request a local education agency to provide documentation or confirmation of the student attendance required by this item, and the school shall comply with the department's request within ten days.

(ii) Previously participated in an empowerment scholarship account.

(v) Has not previously attended a governmental primary or secondary school but is currently eligible to enroll in a kindergarten program in a school district or charter school in this state or attended a program for preschool children with disabilities. For the purposes of this item, a child is eligible to enroll in a kindergarten program if the child is at least four but under seven years of age.

(vi) Has not previously attended a governmental primary or secondary school but is currently eligible to enroll in a program for preschool children with disabilities in this state.

8. "Treasurer" means the office of the state treasurer.

B. This section is effective only if Laws 2017, chapter 139, the subject of referendum petition R-02-2018, is approved by a vote of the people at the November 2018 general election or fails to be referred to the voters at the November 2018 general election. END_STATUTE

Sec. 3. Section 43-1503, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1503. Operational requirements for school tuition organizations

A. A certified school tuition organization must be established to receive contributions from taxpayers for the purposes of income tax credits under sections 43‑1183 and 43‑1184 and insurance premium tax credits under sections 20‑224.06 and 20‑224.07 and to pay educational scholarships or tuition grants to allow students to attend any qualified school of their parents' or custodians' choice.

B. To be eligible for certification and retain certification, the school tuition organization:

1. Must allocate at least ninety percent of its annual revenue from contributions made for the purposes of sections 20‑224.06, 20‑224.07, 43‑1183 and 43‑1184 for educational scholarships or tuition grants.

2. Shall not limit the availability of educational scholarships or tuition grants to only students of one school.

3. Must allow the department of revenue to verify that the educational scholarships and tuition grants that are issued are awarded to students who attend a qualified school.

4. Must not knowingly collude with any other school tuition organization to circumvent the limits of section 43‑1504, subsection C.

5. Must not award educational scholarships or tuition grants to students who are simultaneously enrolled in a district school or charter school and a qualified school.

6. May not require an applicant or the family of an applicant to provide a good or service that benefits the school tuition organization in exchange for awarding the applicant an educational scholarship or tuition grant.

6. 7. Shall include on the organization's website, if one exists, the percentage and total dollar amount of educational scholarships and tuition grants awarded during the previous fiscal year to:

(a) Students whose family income meets the economic eligibility requirements established under the national school lunch and child nutrition acts (42 United States Code sections 1751 through 1785) for free or reduced‑price lunches.

(b) Students whose family income exceeds the threshold prescribed by subdivision (a) of this paragraph but does not exceed one hundred eighty‑five percent of the economic eligibility requirements established under the national school lunch and child nutrition acts (42 United States Code sections 1751 through 1785) for free or reduced‑price lunches. END_STATUTE

Sec. 4. Section 43-1504, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1504. Special provisions; corporate donations for low‑income scholarships; rules

A. A school tuition organization that receives contributions from a corporation for the purposes of section 20‑224.06 or 43‑1183 must use at least ninety per cent percent of those contributions to provide educational scholarships or tuition grants only to children whose family income does not exceed one hundred eighty-five per cent percent of the income limit required to qualify a child for reduced price reduced‑price lunches under the national school lunch and child nutrition acts (42 United States Code sections 1751 through 1785) and to whom any of the following applies:

1. Attended a governmental primary or secondary school as a full‑time student students as defined in section 15‑901 or attended a preschool program that offers services to students with disabilities at a governmental school for at least ninety days of the prior fiscal year or one full semester and transferred from a governmental school to a qualified school.

2. Enroll in a qualified school in a kindergarten program or a preschool program that offers services to students with disabilities.

3. Is are the dependent of a member of the armed forces of the United States who is stationed in this state pursuant to military orders.

4. Are homeschooled before enrolling in a qualified school.

5. Moved to this state from out of this state before enrolling in a qualified school.

6. Attend a qualified school for at least ninety days and receive monies pursuant to title 15, chapter 19, article 1.

4. 7. Received an educational scholarship or tuition grant under paragraph 1, 2 or 3 through 6 of this subsection or chapter 16, article 1 of this title if the children continue to attend a qualified school in a subsequent year.

B. A child is eligible to receive an educational scholarship or tuition grant under subsection A of this section if the child meets the criteria to receive a reduced price reduced‑price lunch but does not actually claim that benefit.

C. In 2006, a school tuition organization shall not issue an educational scholarship or a tuition grant for the purposes of section 20‑224.06 or 43‑1183 in an amount that exceeds four thousand two hundred dollars for students in a disabled preschool or kindergarten program, in a preschool program that offers services to students with disabilities or in grades one through eight or five thousand five hundred dollars for students in grades nine through twelve. In each year after 2006 through 2018, the limitation amount for a scholarship or a grant under this subsection shall be increased by one hundred dollars. beginning in 2019, the limitation amount for a scholarship or a grant under this subsection from the previous year shall be annually increased by the greater of either:

1. The percentage of the annual increase, if any in the metropolitan Phoenix consumer price index published by the United States department of labor, bureau of Labor statistics.

2. Two percent.

D. Notwithstanding subsection C of this section, beginning in 2019, a school tuition organization may issue an educational scholarship or a tuition grant for the purposes of section 20‑224.06 or 43‑1183 in an amount that does not exceed the full cost of tuition for the student to attend the qualified school if the student's family income does not exceed the income limit required to qualify a child for reduced‑price lunches under the national school lunch and child nutrition acts (42 United States Code sections 1751 through 1785).

D. E. A school tuition organization shall require that student beneficiaries use the educational scholarships or tuition grants on a full‑time basis. If a child leaves the school before completing an entire school year, the school shall refund a prorated amount of the educational scholarship or tuition grant to the school tuition organization that issued the scholarship or grant. The school tuition organization shall allocate any refunds it receives under this subsection for educational scholarships or tuition grants.

E. F. Students who receive an educational scholarship or tuition grant under this section shall be allowed to may attend any qualified school of their parents' choice.

G. Students who are eligible to receive an educational scholarship or tuition grant pursuant to subsection A, paragraph 6 of this section may not accept an educational scholarship or tuition grant from a school tuition organization concurrently with an Arizona empowerment scholarship account for the student during the same time the student is actively enrolled in an empowerment scholarship account under title 15, chapter 19, article 1. The school tuition organization may request the qualified school to confirm that the student is in compliance with this subsection.

F. H. The department of revenue, with the cooperation of the department of insurance, shall adopt rules and publish and prescribe forms and procedures necessary for the administration of this section.END_STATUTE

Sec. 5. Section 43-1505, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1505. Special provisions; corporate donations for displaced students and students with disabilities; definition

A. A school tuition organization that receives contributions for the purposes of section 20‑224.07 or 43‑1184 must use at least ninety per cent percent of those contributions to provide educational scholarships or tuition grants to qualified students.

B. The amount of an educational scholarship or a tuition grant that is issued by a school tuition organization under this section shall not exceed the cost of tuition for the qualified student to attend the qualified school or ninety per cent of the amount of state aid that otherwise would be computed for the student as provided in title 15, chapter 9, article 5, whichever is less. On request from a school tuition organization, the department of education shall provide to the school tuition organization in a timely manner the amount computed for the student under this subsection that represents the ninety per cent limitation prescribed in this subsection.

C. A school tuition organization shall require that student beneficiaries use the educational scholarships or tuition grants on a full‑time basis. If a child leaves the school before completing an entire school year, the school shall refund a prorated amount of the educational scholarship or tuition grant to the school tuition organization that issued the scholarship or grant. The school tuition organization shall allocate any refunds it receives under this subsection for educational scholarships or tuition grants.

D. Qualified students who receive an educational scholarship or tuition grant under this section shall be allowed to may attend any qualified school of their custodians' choice.

E. A qualified student may not accept an educational scholarship or tuition grant from a school tuition organization pursuant to this section concurrently with an Arizona empowerment scholarship account for the qualified student during the same time the qualified student is actively enrolled in an empowerment scholarship account under title 15, chapter 19, article 1. The school tuition organization may request the qualified school to confirm that the qualified student is in compliance with this subsection.

E. F. For the purposes of this section, "qualified student" means a student, including a student who previously qualified for an educational scholarship or tuition grant under this section and continues to attend a qualified school, or a student who Attends a qualified school for at least ninety days and who receives monies pursuant to title 15, chapter 19, article 1, who has been either:

1. Placed in foster care pursuant to title 8, chapter 4 at any time before the student graduates from high school or obtains a general equivalency diploma.

2. Identified as having a disability under section 504 of the rehabilitation act (29 United States Code section 794) or identified at any time by a school district as a child with a disability as defined in section 15‑761 or a child with a disability who is eligible to receive services from a school district under section 15‑763.END_STATUTE