| 1 | 1 | | REFERENCE TITLE: ESAs; contract renewal; account closure State of Arizona Senate Fifty-seventh Legislature First Regular Session 2025 SB 1417 Introduced by Senators Kuby: Alston, Epstein, Hatathlie, Ortiz; Representatives Garcia, Sandoval AN ACT amending section 15-2402, Arizona Revised Statutes; relating to Arizona Empowerment scholarship accounts. (TEXT OF BILL BEGINS ON NEXT PAGE) |
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| 9 | 9 | | REFERENCE TITLE: ESAs; contract renewal; account closure |
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| 10 | 10 | | State of Arizona Senate Fifty-seventh Legislature First Regular Session 2025 |
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| 11 | 11 | | SB 1417 |
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| 12 | 12 | | Introduced by Senators Kuby: Alston, Epstein, Hatathlie, Ortiz; Representatives Garcia, Sandoval |
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| 14 | 14 | | REFERENCE TITLE: ESAs; contract renewal; account closure |
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| 24 | 24 | | State of Arizona |
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| 26 | 26 | | Senate |
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| 28 | 28 | | Fifty-seventh Legislature |
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| 30 | 30 | | First Regular Session |
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| 32 | 32 | | 2025 |
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| 40 | 40 | | SB 1417 |
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| 44 | 44 | | Introduced by |
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| 46 | 46 | | Senators Kuby: Alston, Epstein, Hatathlie, Ortiz; Representatives Garcia, Sandoval |
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| 64 | 64 | | AN ACT |
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| 68 | 68 | | amending section 15-2402, Arizona Revised Statutes; relating to Arizona Empowerment scholarship accounts. |
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| 74 | 74 | | (TEXT OF BILL BEGINS ON NEXT PAGE) |
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| 78 | 78 | | 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 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 the qualified student to withdraw from a any 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 the qualified student from applying in advance for an Arizona empowerment scholarship account to be funded beginning the following school year, subject to section 15-2403, subsection H. 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 that requires all teaching staff and personnel who have unsupervised contact with students to be fingerprinted. (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 who is not subject to disciplinary action by the state board of education for immoral or unprofessional conduct pursuant to section 15-505 or 15-534.04 or a facility that is accredited by a state, regional or national accrediting organization. The department shall ensure that any individual who provides tutoring or teaching services to one or more qualified students pursuant to this subdivision is not subject to disciplinary action by the state board of education. The department shall also remove any individual who is subject to disciplinary action by the state board of education from all platforms that the department provides to parents and qualified students for the purchase of goods or educational services using account monies. (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. (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. 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. The department of education shall verify that the parent's child is a qualified student as defined in section 15-2401 or 15-2401.01 in the year for which the parent seeks to renew the Arizona empowerment scholarship account. This subsection does not require the department to annually verify the child's disability for the purpose of section 15-2401, paragraph 7, subdivision (a), item (i), (ii) or (iii), if applicable. 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 one academic years year, 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 allowable 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. END_STATUTE |
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| 80 | 80 | | Be it enacted by the Legislature of the State of Arizona: |
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| 82 | 82 | | Section 1. Section 15-2402, Arizona Revised Statutes, is amended to read: |
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| 84 | 84 | | START_STATUTE15-2402. Arizona empowerment scholarship accounts; funds |
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| 86 | 86 | | A. Arizona empowerment scholarship accounts are established to provide options for the education of students in this state. |
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| 88 | 88 | | 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: |
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| 90 | 90 | | 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. |
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| 92 | 92 | | 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: |
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| 94 | 94 | | (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. |
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| 95 | 95 | | |
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| 96 | 96 | | (b) Require the qualified student to withdraw from a any 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. |
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| 98 | 98 | | (c) Prevent the qualified student from applying in advance for an Arizona empowerment scholarship account to be funded beginning the following school year, subject to section 15-2403, subsection H. |
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| 100 | 100 | | 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. |
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| 102 | 102 | | 4. Use monies deposited in the qualified student's Arizona empowerment scholarship account only for the following expenses of the qualified student: |
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| 104 | 104 | | (a) Tuition or fees at a qualified school that requires all teaching staff and personnel who have unsupervised contact with students to be fingerprinted. |
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| 106 | 106 | | (b) Textbooks required by a qualified school. |
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| 108 | 108 | | (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: |
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| 110 | 110 | | (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. |
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| 112 | 112 | | (ii) A licensed or accredited paraprofessional or educational aide. |
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| 114 | 114 | | (iii) Tuition for vocational and life skills education approved by the department. |
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| 116 | 116 | | (iv) Associated goods and services that include educational and psychological evaluations, assistive technology rentals and braille translation goods and services approved by the department. |
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| 118 | 118 | | (d) Tutoring or teaching services provided by an individual who is not subject to disciplinary action by the state board of education for immoral or unprofessional conduct pursuant to section 15-505 or 15-534.04 or a facility that is accredited by a state, regional or national accrediting organization. The department shall ensure that any individual who provides tutoring or teaching services to one or more qualified students pursuant to this subdivision is not subject to disciplinary action by the state board of education. The department shall also remove any individual who is subject to disciplinary action by the state board of education from all platforms that the department provides to parents and qualified students for the purchase of goods or educational services using account monies. |
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| 119 | 119 | | |
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| 120 | 120 | | (e) Curricula and supplementary materials. |
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| 121 | 121 | | |
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| 122 | 122 | | (f) Tuition or fees for a nonpublic online learning program. |
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| 123 | 123 | | |
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| 124 | 124 | | (g) Fees for a nationally standardized norm-referenced achievement test, an advanced placement examination or any exams related to college or university admission. |
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| 125 | 125 | | |
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| 126 | 126 | | (h) Tuition or fees at an eligible postsecondary institution. |
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| 127 | 127 | | |
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| 128 | 128 | | (i) Textbooks required by an eligible postsecondary institution. |
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| 129 | 129 | | |
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| 130 | 130 | | (j) Fees to manage the Arizona empowerment scholarship account. |
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| 131 | 131 | | |
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| 132 | 132 | | (k) Services provided by a public school, including individual classes and extracurricular programs. |
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| 133 | 133 | | |
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| 134 | 134 | | (l) Insurance or surety bond payments. |
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| 136 | 136 | | (m) Uniforms purchased from or through a qualified school. |
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| 138 | 138 | | (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: |
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| 140 | 140 | | (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. |
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| 142 | 142 | | (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. |
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| 144 | 144 | | (iii) A list of independent evaluation teams that meet the minimum qualifications prescribed by the department pursuant to this subdivision. |
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| 146 | 146 | | (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. |
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| 148 | 148 | | (p) Computer hardware and technological devices primarily used for an educational purpose. For the purposes of this subdivision, "computer hardware and technological devices": |
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| 150 | 150 | | (i) Includes calculators, personal computers, laptops, tablet devices, microscopes, telescopes and printers. |
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| 152 | 152 | | (ii) Does not include entertainment and other primarily noneducational devices, including televisions, telephones, video game consoles and accessories, and home theatre and audio equipment. |
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| 154 | 154 | | 5. Not file an affidavit of intent to homeschool pursuant to section 15-802, subsection B, paragraph 2 or 3. |
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| 156 | 156 | | 6. Not use monies deposited in the qualified student's account for any of the following: |
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| 158 | 158 | | (a) Computer hardware or other technological devices, except as otherwise allowed under paragraph 4, subdivision (c) or (p) of this subsection. |
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| 159 | 159 | | |
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| 160 | 160 | | (b) Transportation of the pupil, except for transportation services described in paragraph 4, subdivision (o) of this subsection. |
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| 161 | 161 | | |
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| 162 | 162 | | 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. |
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| 163 | 163 | | |
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| 164 | 164 | | 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. |
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| 165 | 165 | | |
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| 166 | 166 | | 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. |
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| 167 | 167 | | |
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| 168 | 168 | | F. A parent must renew the qualified student's Arizona empowerment scholarship account on an annual basis. The department of education shall verify that the parent's child is a qualified student as defined in section 15-2401 or 15-2401.01 in the year for which the parent seeks to renew the Arizona empowerment scholarship account. This subsection does not require the department to annually verify the child's disability for the purpose of section 15-2401, paragraph 7, subdivision (a), item (i), (ii) or (iii), if applicable. |
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| 169 | 169 | | |
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| 170 | 170 | | 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. |
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| 171 | 171 | | |
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| 172 | 172 | | H. If a parent does not renew the qualified student's Arizona empowerment scholarship account for a period of three one academic years year, 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. |
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| 173 | 173 | | |
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| 174 | 174 | | I. A signed agreement under this section constitutes school attendance required by section 15-802. |
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| 175 | 175 | | |
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| 176 | 176 | | 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. |
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| 177 | 177 | | |
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| 178 | 178 | | 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 allowable 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. |
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| 179 | 179 | | |
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| 180 | 180 | | L. Monies received pursuant to this article do not constitute taxable income to the parent of the qualified student. END_STATUTE |
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