HB2662 - 561R

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

Section 1. Section 15-743, Arizona Revised Statutes, is amended to read:

START_STATUTE15-743. Test results; annual report; five-year cumulative summary

A. The state board of education shall provide annual reports for every school and school district, and the state as a whole and the Arizona empowerment scholarship account program. The state board shall annually submit these reports to school districts, the legislature and the county school superintendents and shall make them available to the public. The state board shall publish and distribute the reports by September 1 and shall also provide a cumulative summary of the reports every five years. The annual reports and cumulative summary results shall include:

1. Average and range scores on the statewide assessment adopted pursuant to section 15-741.

2. Standardized test scores by subject area according to percentiles and stanines for the school, school district, county, state and nation and either:

(a) For pupils who are enrolled in a school district, by the school and school district.

(b) For pupils who are enrolled in the Arizona empowerment scholarship account program, by eligibility category and school type.

3. Achievement-related nontest indicator data collected in the survey of teachers, principals and superintendents as required by section 15-741, including information related to dropout rates by ethnicity for each grade level and graduation rates and postsecondary employment and education by ethnicity. In reporting such data, the state board shall not violate the provisions of the family educational rights and privacy act (P.L. 93-380), as amended, or disclose personally identifiable information.

4. The numbers of pupils who have completed the academic standards at grades three, eight and twelve.

B. Test results on individual pupils shall not be made available to the public by name or individually identifiable reference.

C. The state board shall provide a copy of the results from the tests prescribed in section 15-741, subsection A for each school district to that school district. Results may not be released to the public until ten days after the reports are provided to each school district.

D. The state board shall provide each school district participating in the testing program with a copy of each pupil's standardized norm-referenced test scores in reading, language arts and mathematics, and the associated grade equivalents, percentiles and stanines for the school, school district, county, state and nation and the Arizona empowerment scholarship account program, a report of pupil progress on an ongoing and annual basis, showing the trends in gain or loss in pupil achievement over time in reading, language arts and mathematics for all years in which pupils are enrolled in the school district for an entire school year and for which this information is available and a report of the pupil progress for pupils not enrolled in a district for an entire school year. The state board shall also provide each school district with each pupil's statewide assessment scores and the statewide assessment scores for the school, school district, county and state and the Arizona empowerment scholarship account program.

E. The school district shall provide a parent or guardian of each pupil participating in the standardized norm-referenced testing part of the program with a copy of the pupil's scores in reading, language arts and mathematics, and the percentiles and stanines. The school district shall provide a parent or guardian of each pupil with a copy of the pupil's scores on the statewide assessment and the associated scores for the school, school district, county and state and the Arizona empowerment scholarship account program. The school district shall make available to the public through the reports those scores for each school in the school district and for the school district, county, state and nation and the Arizona empowerment scholarship account program. The department of education shall provide or make available all reports required pursuant to this subsection for pupils who are enrolled in the Arizona empowerment scholarship account program, except that the report made available to the public shall be disaggregated by eligibility category and school type.

F. Any testing window established and executed by the department of education or the state board for the administration of the statewide assessment adopted pursuant to section 15-741 may not be longer than four consecutive school weeks and shall ensure that local education agencies receive test scores and assessment data from the third grade reading portion of the statewide assessment on or before May 15 of each academic year and that the scores and assessment data from all other portions of the statewide assessment adopted pursuant to section 15-741 are received by local education agencies on or before May 25 of each academic year. The department of education or the state board may not prohibit the superintendent or the staff of a local education agency from sharing statewide assessment data with the local education agency's district governing board or governing body or otherwise impede the sharing of statewide assessment data.

G. Notwithstanding subsection F of this section and sections 15-741 and 15-742, the department of education, subject to review and approval by the state board, may adjust the testing window for the statewide assessment adopted pursuant to section 15-741 in academic years that the state board is revising current proficiency levels or is establishing new proficiency levels for the statewide assessment adopted pursuant to section 15-741. END_STATUTE

Sec. 2. 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 Arizona empowerment scholarship account, the parent of the qualified student must sign an agreement to do all of the following:

1. Use a portion of the Arizona empowerment scholarship account monies allocated annually to provide an education for the qualified student in at least the subjects of reading, grammar, mathematics, social studies and science, unless the Arizona empowerment scholarship account is allocated monies according to a transfer schedule other than quarterly transfers pursuant to section 15-2403, subsection G.

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:

(a) 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.

(b) Require a the qualified student to withdraw from a the school district or charter school before enrolling for an Arizona empowerment scholarship account if the qualified student withdraws from the school district or charter school before receiving any monies in the qualified student's Arizona empowerment scholarship account.

(c) Prevent a the qualified student from applying in advance for an Arizona empowerment scholarship account to be funded beginning the following school year.

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

4. Use monies 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) If the qualified student meets any of the criteria specified in section 15-2401, paragraph 7, subdivision (a), item (i), (ii) or (iii) as determined by a school district or by an independent third party pursuant to section 15-2403, subsection J, the qualified student may use the following additional services:

(i) Educational therapies from a licensed or accredited practitioner or provider, including and up to any amount not covered by insurance if the expense is partially paid by a health insurance policy for the qualified student.

(ii) A licensed or accredited paraprofessional or educational aide.

(iii) Tuition for vocational and life skills education approved by the department.

(iv) Associated goods and services that include educational and psychological evaluations, assistive technology rentals and braille translation goods and services approved by the department.

(d) Tutoring or teaching services provided by an individual or facility accredited by a state, regional or national accrediting organization.

(e) Curricula and supplementary materials.

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

(g) Fees for a nationally standardized norm-referenced achievement test, an advanced placement examination or any exams related to college or university admission, including fees assessed by a school district or charter school for any costs incurred by the school district or charter school for providing to the qualified student the assessment required by paragraph 7 of this subsection. This subdivision does not require a school district or charter school to provide the assessment required by paragraph 7 of this subsection to a qualified student.

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

(i) Textbooks required by an eligible postsecondary institution.

(j) Fees to manage the Arizona empowerment scholarship account.

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

(l) Insurance or surety bond payments.

(m) Uniforms purchased from or through a qualified school.

(n) If the qualified student meets the criteria specified in section 15-2401, paragraph 7, subdivision (a), item (i), (ii) or (iii) and if the qualified student is in the second year prior to the final year of a contract executed pursuant to this article, costs associated with an annual education plan conducted by an independent evaluation team. The department shall prescribe minimum qualifications for independent evaluation teams pursuant to this subdivision and factors that teams must use to determine whether the qualified student shall be eligible to continue to receive monies pursuant to this article through the school year in which the qualified student reaches twenty-two years of age. An independent evaluation team that provides an annual education plan pursuant to this subdivision shall submit a written report that summarizes the results of the evaluation to the parent of the qualified student and to the department on or before July 31. The written report submitted by the independent evaluation team is valid for one year. If the department determines that the qualified student meets the eligibility criteria prescribed in the annual education plan, the qualified student is eligible to continue to receive monies pursuant to this article until the qualified student reaches twenty-two years of age, subject to annual review. A parent may appeal the department's decision pursuant to title 41, chapter 6, article 10. As an addendum to a qualified student's final-year contract, the department shall provide the following written information to the parent of the qualified student:

(i) That the qualified student will not be eligible to continue to receive monies pursuant to this article unless the results of an annual education plan conducted pursuant to this subdivision demonstrate that the qualified student meets the eligibility criteria prescribed in the annual education plan.

(ii) That the parent is entitled to obtain an annual education plan pursuant to this subdivision to determine whether the qualified student meets the eligibility criteria prescribed in the annual education plan.

(iii) A list of independent evaluation teams that meet the minimum qualifications prescribed by the department pursuant to this subdivision.

(o) Public transportation services in this state, including a commuter pass for the qualified student, or transportation network services as defined in section 28-9551 between the qualified student's residence and a qualified school in which the qualified student is enrolled.

(p) Computer hardware and technological devices primarily used for an educational purpose. For the purposes of this subdivision, "computer hardware and technological devices":

(i) Includes calculators, personal computers, laptops, tablet devices, microscopes, telescopes and printers.

(ii) Does not include entertainment and other primarily noneducational devices, including televisions, telephones, video game consoles and accessories, and home theatre and audio equipment.

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, except as otherwise allowed under paragraph 4, subdivision (c) or (p) of this subsection.

(b) Transportation of the pupil, except for transportation services described in paragraph 4, subdivision (o) of this subsection.

7. Notwithstanding any other law, beginning in the 2023-2024 school year and each year thereafter, have the qualified student, if in any of grades three through twelve, take either a nationally standardized norm-referenced achievement test or the statewide assessment adopted pursuant to section 15-741 and report the assessment results to the Department of education. This paragraph does not apply to:

(a) A qualified student who is identified as having a disability under section 504 of the rehabilitation act of 1973 (P.L. 93-112; 87 Stat. 355; 29 United States Code section 794).

(b) A qualified student who is identified by a school district or independent third party pursuant to section 15-2403, subsection J as a child with a disability as defined in section 15-731 or 15-761.

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, or if the child is currently eligible to attend a preschool program for children with disabilities, a kindergarten program or any of grades one through twelve, the monies that the department determines would otherwise be allocated to a recipient's expected school district of attendance, to the treasurer for deposit into an Arizona empowerment scholarship account an amount that is equivalent to ninety percent of the sum of the base support level and additional assistance prescribed in sections 15-185 and 15-943 for that particular student if that student were attending a charter school.

D. The department of education empowerment scholarship account fund is established consisting of monies appropriated by the legislature. 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 Arizona 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 Arizona empowerment scholarship accounts significantly increases after fiscal year 2020-2021, 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. The department shall list monies in the fund as a separate line item in its budget estimate.

E. The state treasurer empowerment scholarship account fund is established consisting of monies appropriated by the legislature. The state treasurer shall administer the fund. Monies in the fund shall be used for the state treasurer's costs in administering the Arizona empowerment scholarship accounts under this chapter. If the number of Arizona empowerment scholarship accounts significantly increases after fiscal year 2020-2021, 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. The state treasurer shall list monies in the fund as a separate line item in its budget estimate.

F. A parent must renew the qualified student's Arizona empowerment scholarship account on an annual basis.

G. Notwithstanding any changes to the student's multidisciplinary evaluation team plan, a student who has previously qualified for an Arizona empowerment scholarship account remains eligible to apply for renewal until the student finishes high school.

H. If a parent does not renew the qualified student's Arizona empowerment scholarship account for a period of three academic years, the department shall notify the parent that the qualified student's account will be closed in sixty calendar days. The notification must be sent through certified mail, email and telephone, if applicable. The parent has sixty calendar days to renew the qualified student's Arizona empowerment scholarship account. If the parent chooses not to renew or does not respond in sixty calendar days, the department shall close the account and any remaining monies shall be returned to the state.

I. A signed agreement under this section constitutes school attendance required by section 15-802.

J. 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.

K. Notwithstanding subsection H of this section, 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, but not before this time as long as the account holder continues using a portion of account monies for eligible expenses each year and is in good standing, the qualified student's Arizona empowerment scholarship account shall be closed and any remaining monies shall be returned to the state.

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

M. The department of education shall annually provide to qualified students in this state the assessment that is required by subsection B, paragraph 7 of this section. END_STATUTE

Sec. 3. Section 15-2404, Arizona Revised Statutes, is amended to read:

START_STATUTE15-2404. State control over nonpublic schools; prohibition; application

A. This chapter does not permit allow any government agency to exercise control or supervision over any nonpublic school or homeschool.

B. A qualified school that accepts a payment from a parent pursuant to this chapter is not an agent of the state or federal government.

C. A qualified school shall not be required to alter its creed, practices, admissions policy or curriculum in order to accept students whose parents pay tuition or fees from an Arizona empowerment scholarship account pursuant to this chapter in order to participate as a qualified school.

D. In any legal proceeding challenging the application of this chapter to a qualified school, the state bears the burden of establishing that the law is necessary and does not impose any undue burden on qualified schools.

E. Notwithstanding subsections A, C and D of this section, a qualified school that accepts a payment from a parent pursuant to this chapter shall comply with the reporting, follow-up and hearing participation requirements of section 41-1279.03. END_STATUTE

Sec. 4. Repeal

Section 41-1279.03, Arizona Revised Statutes, as amended by Laws 2021, chapter 405, section 25, is repealed.

Sec. 5. Section 41-1279.03, Arizona Revised Statutes, as amended by Laws 2019, chapter 3, section 11, is amended to read:

START_STATUTE41-1279.03. Powers and duties

A. The auditor general shall:

1. Prepare an audit plan for approval by the committee and report to the committee the results of each audit and investigation and other reviews conducted by the auditor general.

2. Conduct or cause to be conducted at least biennial financial and compliance audits of financial transactions and accounts kept by or for all state agencies subject to the single audit act of 1984 (P.L. 98-502). The audits shall be conducted in accordance with generally accepted governmental auditing standards and accordingly shall include tests of the accounting records and other auditing procedures as may be considered necessary in the circumstances. The audits shall include the issuance of suitable reports as required by the single audit act of 1984 (P.L. 98-502) so that the legislature, the federal government and others will be informed as to the adequacy of financial statements of the this state in compliance with generally accepted governmental accounting principles and to determine whether this state has complied with laws and regulations that may have a material effect on the financial statements and on major federal assistance programs.

3. Perform procedural reviews for all state agencies at times determined by the auditor general. These reviews may include evaluation of administrative and accounting internal controls and reports on these reviews.

4. Perform special research requests, special audits and related assignments as designated by the committee and conduct performance audits, special audits, special research requests and investigations of any state agency, whether created by the constitution or otherwise, as may be requested by the committee.

5. Annually on or before the fourth Monday of December, prepare a written report to the governor and to the committee that contains a summary of activities for the previous fiscal year.

6. In the tenth year and in each fifth year thereafter in which a transportation excise tax is in effect in a county as provided in section 42-6106 or 42-6107, conduct a performance audit that:

(a) Reviews past expenditures and future planned expenditures of the transportation excise revenues and determines the impact of the expenditures in solving transportation problems within the county and, for a transportation excise tax in effect in a county as provided in section 42-6107, determines whether the expenditures of the transportation excise revenues comply with section 28-6392, subsection B.

(b) Reviews projects completed to date and projects to be completed during the remaining years in which a transportation excise tax is in effect. Within six months after each review period, the auditor general shall present a report to the speaker of the house of representatives and the president of the senate detailing findings and making recommendations.

(c) Reviews, determines, reports and makes recommendations to the speaker of the house of representatives and the president of the senate whether the distribution of Arizona highway user revenues complies with title 28, chapter 18, article 2.

7. If requested by the committee, conduct performance audits of counties and incorporated cities and towns receiving Arizona highway user revenue fund monies pursuant to title 28, chapter 18, article 2 to determine whether the monies are being spent as provided in section 28-6533, subsection B.

8. Perform special audits designated pursuant to law if the auditor general determines that there are adequate monies appropriated for the auditor general to complete the audit. If the auditor general determines the appropriated monies are inadequate, the auditor general shall notify the committee.

9. Establish a schoolwide audit team in the office of the auditor general to conduct performance audits and monitor school districts to determine the percentage of every dollar spent in the classroom by the school district. Each school district shall prominently post on its website home page a copy of its profile pages that displays the percentage of every dollar spent in the classroom by that school district from the most recent status report issued by the auditor general pursuant to this paragraph. The performance audits shall determine whether school districts that receive monies from the Arizona English language learner fund established by section 15-756.04 and the statewide compensatory instruction fund established by section 15-756.11 comply with title 15, chapter 7, article 3.1. The auditor general shall determine, through random selection, the school districts to be audited each year, subject to review by the joint legislative audit committee. A school district that is subject to an audit pursuant to this paragraph shall notify the auditor general in writing whether the school district agrees or disagrees with the findings and recommendations of the audit and whether the school district will implement the findings and recommendations, implement modifications to the findings and recommendations or refuse to implement the findings and recommendations. The school district shall submit to the auditor general a written status report on the implementation of the audit findings and recommendations every six months for two years after an audit conducted pursuant to this paragraph. The auditor general shall review the school district's progress toward implementing the findings and recommendations of the audit every six months after receipt of receiving the district's status report for two years. The auditor general may review a school district's progress beyond this two-year period for recommendations that have not yet been implemented by the school district. The auditor general shall provide a status report of these reviews to the joint legislative audit committee. The school district shall participate in any hearing scheduled during this review period by the joint legislative audit committee or by any other legislative committee designated by the joint legislative audit committee.

10. Annually review per diem compensation and reimbursement of expenses for employees of this state and members of a state board, commission, council or advisory committee by judgmentally selecting samples and evaluating the propriety of per diem compensation and expense reimbursements.

11. Establish an audit team in the office of the auditor general to conduct audits and monitor qualified schools to determine the percentage of Arizona empowerment scholarship account monies that are spent in the classroom by the qualified school. Notwithstanding any other law, a qualified school that accepts a payment from a parent pursuant to title 15, chapter 19 shall prominently post on its website home page a copy of its profile pages that displays the percentage of Arizona empowerment scholarship account monies spent in the classroom by that qualified school from the most recent status report issued by the auditor general pursuant to this paragraph. The auditor general shall determine, through random selection, the qualified schools to be audited each year, subject to review by the joint legislative audit committee. A qualified school that is subject to an audit pursuant to this paragraph shall notify the auditor general in writing whether the qualified school agrees or disagrees with the findings and recommendations of the audit and whether the qualified school will implement the findings and recommendations, implement modifications to the findings and recommendations or refuse to implement the findings and recommendations. The qualified school shall submit to the auditor general a written status report on the implementation of the audit findings and recommendations every six months for two years after an audit conducted pursuant to this paragraph. The auditor general shall review the qualified school's progress toward implementing the findings and recommendations of the audit every six months after receiving the qualified school's status report for two years. The auditor general may review a qualified school's progress beyond this two-year period for recommendations that have not yet been implemented by the qualified school. The auditor general shall provide a status report of these reviews to the joint legislative audit committee. The qualified school shall participate in any hearing scheduled during this review period by the joint legislative audit committee or by any other legislative committee designated by the joint legislative audit committee. For the purposes of this paragraph, "qualified school" has the same meaning prescribed in section 15-2401.

B. The auditor general may:

1. Subject to approval by the committee, adopt rules necessary to administer the duties of the office.

2. Hire consultants to conduct the studies required by subsection A, paragraphs 6 and 7 of this section.

C. If approved by the committee, the auditor general may charge a reasonable fee for the cost of performing audits or providing accounting services for auditing federal funds, special audits or special services requested by political subdivisions of this state. Monies collected pursuant to this subsection shall be deposited in the audit services revolving fund.

D. The department of transportation, the board of supervisors of a county that has approved a county transportation excise tax as provided in section 42-6106 or 42-6107 and the governing bodies of counties, cities and towns receiving Arizona highway user revenue fund monies shall cooperate with and provide necessary information to the auditor general or the auditor general's consultant.

E. The department of transportation shall reimburse the auditor general as follows, and the auditor general shall deposit the reimbursed monies in the audit services revolving fund:

1. For the cost of conducting the studies or hiring a consultant to conduct the studies required by subsection A, paragraph 6, subdivisions (a) and (b) of this section, from monies collected pursuant to a county transportation excise tax levied pursuant to section 42-6106 or 42-6107.

2. For the cost of conducting the studies or hiring a consultant pursuant to subsection A, paragraph 6, subdivision (c) and paragraph 7 of this section, from the Arizona highway user revenue fund. END_STATUTE