SB1198 - 551R

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

Section 1. Section 41-1376, Arizona Revised Statutes, is amended to read:

START_STATUTE41-1376. Powers and duties

A. The ombudsman‑citizens aide shall:

1. Investigate the administrative acts of agencies pursuant to section 41‑1377, subsections A and B except as provided in section 41‑1377, subsections C, D and E. The ombudsman‑citizens aide shall investigate the administrative acts of an agency without regard to the finality of the administrative act.

2. Annually before January 1 prepare a written report to the governor, the legislature and the public that contains a summary of the ombudsman‑citizens aide's activities during the previous fiscal year. The ombudsman‑citizens aide shall present this report annually before the legislative council and distribute copies of the report to the director of the governor's office of strategic planning and budgeting, the chairperson of the joint legislative budget committee and the cochairpersons of the administrative rules oversight committee. This report shall include:

(a) The ombudsman‑citizens aide's mission statement.

(b) The number of matters that were within each of the categories specified in section 41‑1379, subsection B.

(d) Selected case studies that illustrate the ombudsman‑citizens aide's work and reasons for complaints.

(e) Ombudsman‑citizens aide's contact statistics.

(f) A description of the public awareness and outreach activities conducted by the ombudsman‑citizens aide.

(g) Ombudsman‑citizens aide's staff.

3. Before conducting the first investigation, adopt rules that ensure that confidential information that is gathered will not be disclosed.

4. Appoint a deputy ombudsman and prescribe the duties of employees or, subject to appropriation, contract for the services of independent contractors necessary to administer the duties of the office of ombudsman‑citizens aide. All staff serves at the pleasure of the ombudsman‑citizens aide, and they are exempt from chapter 4, articles 5 and 6 of this title. All staff shall be is subject to the conflict of interest provisions of title 38, chapter 3, article 8.

5. Before conducting the first investigation, adopt rules that establish procedures for receiving and processing complaints, including guidelines to ensure each complainant has exhausted all reasonable alternatives within the agency, conducting investigations, incorporating agency responses into recommendations and reporting findings.

6. Notify the chief executive or administrative officer of the agency in writing of the intention to investigate unless notification would unduly hinder the investigation or make the investigation ineffectual.

7. Appoint an assistant to help the ombudsman‑citizens aide investigate complaints relating to the department of child safety. The assistant shall have expertise in the department of child safety procedures and laws. Notwithstanding any law to the contrary, the ombudsman‑citizens aide and the assistant have access to the department of child safety records and to any automated case management system used by the department of child safety.

8. Appoint an assistant to help the ombudsman‑citizens aide investigate complaints relating to student loan borrowers in this state.

B. After the conclusion of an investigation and notice to the head of the agency pursuant to section 41‑1379, the ombudsman‑citizens aide may present the ombudsman‑citizens aide's opinion and recommendations to the governor, the legislature, the office of the appropriate prosecutor or the public, or any combination of these persons. The ombudsman‑citizens aide shall include in the opinion the reply of the agency, including those issues that were resolved as a result of the ombudsman‑citizens aide's preliminary opinion or recommendation. END_STATUTE

Sec. 2. Title 41, chapter 8, article 5, Arizona Revised Statutes, is amended by adding section 41-1376.02, to read:

START_STATUTE41-1376.02. Student loan assistant ombudsman‑citizens aide; duties; definitions

A. The student loan assistant ombudsman‑citizens aide, in consultation with the ombudsman‑citizens aide, shall:

1. Receive, review and attempt to resolve complaints from student loan borrowers, including attempting to resolve complaints in collaboration with institutions of higher education, student loan servicers and other participants in student loan lending.

2. Compile and analyze data on student loan borrower complaints as described in paragraph 1 of this subsection.

3. Assist student loan borrowers to understand their rights and responsibilities under the terms of student education loans, including income-based repayment options.

4. Provide information to the public, agencies, legislators and others regarding the problems and concerns of student loan borrowers and make recommendations for resolving those problems and concerns.

5. Analyze and monitor the development and implementation of federal, state and local laws, regulations and policies relating to student loan borrowers and recommend any changes the student loan assistant ombudsman‑citizens aide deems necessary.

6. Review the complete student education loan history for any student loan borrower who provides written consent for review.

7. Disseminate information concerning the availability of the student loan assistant ombudsman‑citizens aide to assist student loan borrowers and potential student loan borrowers, including institutions of higher education, student loan servicers and other participants in student education loan lending, with any student loan servicing concerns.

8. Take other actions that are necessary to fulfill the duties of the student loan assistant ombudsman‑citizens aide as set forth in this section.

B. Within two hundred days after the effective date of this section, the student loan assistant ombudsman‑citizens aide, in consultation with the ombudsman‑citizens aide and subject to available appropriations, shall establish and maintain a student loan borrower education course that includes educational presentations and materials regarding student education loans. The course shall include key loan terms, documentation requirements, monthly payment obligations, income‑based repayment options, loan forgiveness and disclosure requirements.

C. On or before January 1, 2022 and annually thereafter, the ombudsman‑citizens aide shall submit a report to the governor, the president of the senate and the speaker of the house of representatives and shall post a copy of the report on the ombudsman‑citizens aide's website. The report shall include the following:

1. The implementation of this section.

2. The overall effectiveness of the student loan assistant ombudsman‑citizens aide.

3. Additional steps that need to be taken for the department of education to gain regulatory control over the licensing and enforcement of student loan servicers.

D. For the purposes of this section:

1. "Servicing" means:

(a) Receiving scheduled periodic payments from a student loan borrower pursuant to the terms of a student education loan.

(b) Applying the payments of principal and interest and other payments with respect to the amounts received from a student loan borrower, as may be required pursuant to the terms of a student education loan.

2. "Student education loan" means any loan primarily for personal use to finance education or other school-related expenses.

3. "Student loan borrower" means a resident of this state who has received or WHO HAS agreed to pay a student education loan or a person who shares responsibility with the resident for repaying the student education loan.

4. "Student loan servicer" means a person, wherever located, that is responsible for servicing student education loans. END_STATUTE

Sec. 3. Appropriation; ombudsman‑citizens aide; exemption

A. The sum of $120,000 and one FTE position are appropriated from the state general fund in fiscal year 2021-2022 to the ombudsman-citizens aide for the purposes provided in this act.

B. The appropriation made in subsection A of this section is exempt from the provisions of section 35‑190, Arizona Revised Statutes, relating to lapsing of appropriations.