Senate Engrossed transitional housing; reentry programs; licensure State of Arizona Senate Fifty-seventh Legislature First Regular Session 2025 SENATE BILL 1537 An Act amending sections 36-414 and 36-2061, Arizona Revised Statutes; amending title 36, Arizona Revised Statutes, by adding chapter 42; relating to transitional housing for reentry programs. (TEXT OF BILL BEGINS ON NEXT PAGE)
Senate Engrossed transitional housing; reentry programs; licensure
State of Arizona Senate Fifty-seventh Legislature First Regular Session 2025
SENATE BILL 1537
Senate Engrossed
transitional housing; reentry programs; licensure
State of Arizona
Senate
Fifty-seventh Legislature
First Regular Session
2025
SENATE BILL 1537
An Act
amending sections 36-414 and 36-2061, Arizona Revised Statutes; amending title 36, Arizona Revised Statutes, by adding chapter 42; relating to transitional housing for reentry programs.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona: Section 1. Section 36-414, Arizona Revised Statutes, is amended to read: START_STATUTE36-414. Health services licensing fund; exemption A. The health services licensing fund is established consisting of monies deposited pursuant to sections 30-654, 32-1308, 32-2805, 36-405, 36-765.05, 36-766.06, 36-851.01, 36-882, 36-897.01, and 36-1903, 36-2063 and 36-4204. The department of health services shall administer the fund. B. Monies in the fund are subject to legislative appropriation. C. Monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations. END_STATUTE Sec. 2. Section 36-2061, Arizona Revised Statutes, is amended to read: START_STATUTE36-2061. Definitions In this article, unless the context otherwise requires: 1. "Certifying organization" means an organization that certifies homes as sober living homes and that is affiliated with a national organization recognized by the department whose primary function is to improve access to and the quality of sober living residences through standards, education, research and advocacy. 2. "Medication-assisted treatment" means the use of pharmacological medications that are approved by the United States food and drug administration, in combination with counseling and behavioral therapies, to provide a whole patient approach to the treatment of treating substance use disorders. 3. "Sober living home": (a) Means any premises, place or building that provides alcohol-free or drug-free housing and that: (a) (i) Promotes independent living and life skills development. (b) (ii) May provide activities that are directed primarily toward recovery from substance use disorders. (c) (iii) Provides a supervised setting to a group of unrelated individuals who are recovering from substance use disorders. (d) (iv) Does not provide any medical or clinical services or medication administration on-site, except for verification of abstinence. (b) Does not include a transitional housing facility as defined in section 36-4201.END_STATUTE Sec. 3. Title 36, Arizona Revised Statutes, is amended by adding chapter 42, to read: CHAPTER 42 TRANSITIONAL HOUSING FOR REENTRY PROGRAMS ARTICLE 1. TRANSITIONAL HOUSING LICENSURE START_STATUTE36-4201. Definitions In this article, unless the context otherwise requires: 1. "Department" means the department of health services. 2. "Director" means the director of the department. 3. "Transitional housing facility" means a temporary living arrangement for an individual who is transitioning from incarceration to independent living that provides basic necessities, including housing, clothing, prepared meals and hygiene necessities, at no cost to the individual while the individual is simultaneously participating in a voluntary reentry program that incorporates licensed outpatient behavioral health services, job training and placement and other services that are located in the same building. END_STATUTE START_STATUTE36-4202. Licensure; standards; civil penalties; use of title A. The director shall adopt rules to establish minimum standards and requirements for the licensure of transitional housing facilities in this state necessary to ensure the public health, safety and welfare. The standards shall include: 1. A requirement that each transitional housing facility develop policies and procedures to promote reentry of individuals into society after incarceration by requiring the individuals to participate in treatment, self-help groups or other community support. 2. Policies requiring abstinence from alcohol and illicit drugs. 3. A requirement that each transitional housing facility develop policies and procedures to allow individuals who are on medication or medication-assisted treatment to continue to receive this medication or treatment while living in the Transitional Housing facility. 4. A policy that ensures individuals are informed of all transitional housing facility rules and agreements. 5. A policy that requires each resident to complete a housing agreement outlining the rules of the living arrangement within the transitional housing facility, the length of stay and reasons the individual can be discharged from the transitional housing facility. 6. Policies and procedures that require each TRANSITIONAL housing facility to maintain an environment that promotes the safety of the surrounding neighborhood and the community at large. 7. Policies and procedures for discharge planning of persons living in the TRANSITIONAL housing facility that do not negatively impact the surrounding community. 8. A good neighbor policy to address neighborhood concerns and complaints. 9. A requirement that each transitional housing facility post a statement of individual rights that includes the right to file a complaint about the TRANSITIONAL housing facility or provider and information about how to file a complaint. 10. Policies regarding the maintenance of transitional housing facilities, including the installation of functioning smoke detectors, carbon monoxide detectors and fire extinguishers and compliance with local fire codes. 11. Policies and procedures that prohibit a transitional housing facility owner, employee or administrator from requiring an individual to sign any document for the purpose of relinquishing the individual's public assistance benefits, including medical assistance benefits, cash assistance and supplemental nutrition assistance program benefits. 12. Policies and procedures for managing complaints about transitional housing facilities. 13. Requirements for notifying an INDIVIDUAL'S family member or other emergency contact as designated by the individual under certain circumstances, including death. B. A person or organization operating a transitional housing facility in this state that has failed to attain or maintain licensure of the transitional housing facility shall pay a civil penalty of up to $1,000. C. To receive and maintain licensure, a transitional housing facility must comply with all federal, state and local laws, including the Americans with disabilities act of 1990 (p.l. 101-336; 104 stat. 327). D. A treatment facility that is licensed by the department to treat behavioral health, mental health, substance use or co-occurring disorders may be located on the same campus as a transitional housing facility. The transitional housing facility shall be separately licensed pursuant to this article. E. Once the director adopts the minimum standards as required in subsection A of this section, a person or organization may not establish, conduct or maintain in this state a transitional housing facility unless that person or organization holds a current and valid license issued by the department. The license is valid only for the establishment, operation and maintenance of a transitional housing facility. The licensee may not: 1. Imply by advertising or directory listing or otherwise imply that the licensee is authorized to perform services that are more specialized or of a higher degree of care than is authorized by this article and rules adopted pursuant to this article for transitional housing facilities. 2. Transfer or assign the license. A license is valid only for the premises occupied by the transitional housing facility at the time of the issuance of the license. END_STATUTE START_STATUTE36-4203. Staff education and training The department shall establish by rule annual continuing education and training requirements for employees, volunteers and contractors who work in a transitional housing facility.END_STATUTE START_STATUTE36-4204. Fees; licensure; inspections; violation; classification; civil penalties A. The director by rule shall establish fees for initial and annual licensure and a fee for the late payment of licensing fees that includes a grace period. The department shall deposit, pursuant to sections 35-146 and 35-147, ninety percent of the fees collected pursuant to this section in the health services licensing fund established by section 36-414 and ten percent of the fees collected pursuant to this section in the state general fund. B. A transitional housing facility license does not expire and remains valid unless either: 1. The department subsequently revokes or suspends the license pursuant to this article and the rules adopted pursuant to this article. 2. The license is considered void because the licensee did not pay the licensing fee, civil penalties or provider agreement fees before the relevant due date or did not enter into an agreement with the department before the relevant due date to pay all outstanding fees or civil penalties. C. The department shall conduct annual inspections to verify compliance with the requirements of this article and the rules adopted pursuant to this article. On a determination by the director that there is reasonable cause to believe a transitional housing facility is not adhering to the licensing requirements of this article, the director or any duly designated employee or agent of the director may enter on and into the premises of any transitional housing facility that is licensed or required to be licensed pursuant to this article at any reasonable time for the purpose of determining the state of compliance with this article, the rules adopted pursuant to this article and local fire ordinances or rules. An application for licensure under this article constitutes permission for and complete acquiescence in any entry or inspection of the premises during the pendency of the application and, if licensed, during the term of the license. If an inspection reveals that the transitional housing facility is not adhering to the licensing requirements established pursuant to this article, the director may take action authorized by this article. D. Any transitional housing facility whose license has been suspended or revoked in accordance with this article is subject to inspection on application for relicensure or reinstatement of the transitional housing facility's license. If a transitional housing facility license is revoked in this state or any other state, the licensee of the transitional housing facility whose license was revoked may not reapply for any license issued pursuant to this title for a period of at least five years. E. A transitional housing facility that knowingly operates in this state without a license in violation of this article is guilty of a class 6 felony and the director shall assess a civil penalty of not more than $1,000 for each violation. Each day the transitional housing facility operates without a license is a separate violation. F. The director may impose a civil penalty on a person that violates this article or the rules adopted pursuant to this article in an amount of not more than $1,000 for each violation. Each day that a violation occurs constitutes a separate violation. The director shall issue a notice that includes the proposed amount of the civil penalty assessment. If a person requests a hearing to appeal an assessment, the director may not take further action to enforce and collect the assessment until the hearing process is complete. The director shall impose a civil penalty only for those days for which the violation has been documented by the department. G. The department may impose sanctions and commence disciplinary actions against a licensed transitional housing facility, including revoking the license. A license may not be suspended or revoked under this article without affording the licensee notice and an opportunity for a hearing as provided in title 41, chapter 6, article 10. H. The department may contract with a third party to assist the department with licensure and inspections. END_STATUTE START_STATUTE36-4205. Posting; transitional housing facility information The department shall post on its public website the name and telephone number, the department-issued license number, the local jurisdiction business license number and the licensure status of each licensed transitional housing facility in this state and shall update the list quarterly. END_STATUTE START_STATUTE36-4206. Notification requirements; rules; sex offender registration A. Transitional housing facility staff shall notify the department, in a department-provided format, immediately and not more than one business day after any of the following occurs: 1. The death of an individual residing in a transitional housing facility if the resident's death is required to be reported pursuant to section 11-593, including whether the death may have been drug-related. 2. A sex-related crime may have been committed at the transitional housing facility. 3. Any other incident specified in the rule by the department. B. Transitional housing facility staff may not have a personal or intimate relationship with any individual residing in the transitional housing facility. C. Transitional Housing facility staff shall contact law enforcement if the staff is informed that an individual residing in the transitional housing facility may have been involved in a sex-related crime. D. A transitional housing facility licensee shall ensure that any individual residing in the licensee's transitional housing facility who is required to register pursuant to section 13-3821 registers within the statutorily required time frame after admission to the transitional housing facility. END_STATUTE
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 36-414, Arizona Revised Statutes, is amended to read:
START_STATUTE36-414. Health services licensing fund; exemption
A. The health services licensing fund is established consisting of monies deposited pursuant to sections 30-654, 32-1308, 32-2805, 36-405, 36-765.05, 36-766.06, 36-851.01, 36-882, 36-897.01, and 36-1903, 36-2063 and 36-4204. The department of health services shall administer the fund.
B. Monies in the fund are subject to legislative appropriation.
C. Monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations. END_STATUTE
Sec. 2. Section 36-2061, Arizona Revised Statutes, is amended to read:
START_STATUTE36-2061. Definitions
In this article, unless the context otherwise requires:
1. "Certifying organization" means an organization that certifies homes as sober living homes and that is affiliated with a national organization recognized by the department whose primary function is to improve access to and the quality of sober living residences through standards, education, research and advocacy.
2. "Medication-assisted treatment" means the use of pharmacological medications that are approved by the United States food and drug administration, in combination with counseling and behavioral therapies, to provide a whole patient approach to the treatment of treating substance use disorders.
3. "Sober living home":
(a) Means any premises, place or building that provides alcohol-free or drug-free housing and that:
(a) (i) Promotes independent living and life skills development.
(b) (ii) May provide activities that are directed primarily toward recovery from substance use disorders.
(c) (iii) Provides a supervised setting to a group of unrelated individuals who are recovering from substance use disorders.
(d) (iv) Does not provide any medical or clinical services or medication administration on-site, except for verification of abstinence.
(b) Does not include a transitional housing facility as defined in section 36-4201.END_STATUTE
Sec. 3. Title 36, Arizona Revised Statutes, is amended by adding chapter 42, to read:
CHAPTER 42
TRANSITIONAL HOUSING FOR REENTRY PROGRAMS
ARTICLE 1. TRANSITIONAL HOUSING LICENSURE
START_STATUTE36-4201. Definitions
In this article, unless the context otherwise requires:
1. "Department" means the department of health services.
2. "Director" means the director of the department.
3. "Transitional housing facility" means a temporary living arrangement for an individual who is transitioning from incarceration to independent living that provides basic necessities, including housing, clothing, prepared meals and hygiene necessities, at no cost to the individual while the individual is simultaneously participating in a voluntary reentry program that incorporates licensed outpatient behavioral health services, job training and placement and other services that are located in the same building. END_STATUTE
START_STATUTE36-4202. Licensure; standards; civil penalties; use of title
A. The director shall adopt rules to establish minimum standards and requirements for the licensure of transitional housing facilities in this state necessary to ensure the public health, safety and welfare. The standards shall include:
1. A requirement that each transitional housing facility develop policies and procedures to promote reentry of individuals into society after incarceration by requiring the individuals to participate in treatment, self-help groups or other community support.
2. Policies requiring abstinence from alcohol and illicit drugs.
3. A requirement that each transitional housing facility develop policies and procedures to allow individuals who are on medication or medication-assisted treatment to continue to receive this medication or treatment while living in the Transitional Housing facility.
4. A policy that ensures individuals are informed of all transitional housing facility rules and agreements.
5. A policy that requires each resident to complete a housing agreement outlining the rules of the living arrangement within the transitional housing facility, the length of stay and reasons the individual can be discharged from the transitional housing facility.
6. Policies and procedures that require each TRANSITIONAL housing facility to maintain an environment that promotes the safety of the surrounding neighborhood and the community at large.
7. Policies and procedures for discharge planning of persons living in the TRANSITIONAL housing facility that do not negatively impact the surrounding community.
8. A good neighbor policy to address neighborhood concerns and complaints.
9. A requirement that each transitional housing facility post a statement of individual rights that includes the right to file a complaint about the TRANSITIONAL housing facility or provider and information about how to file a complaint.
10. Policies regarding the maintenance of transitional housing facilities, including the installation of functioning smoke detectors, carbon monoxide detectors and fire extinguishers and compliance with local fire codes.
11. Policies and procedures that prohibit a transitional housing facility owner, employee or administrator from requiring an individual to sign any document for the purpose of relinquishing the individual's public assistance benefits, including medical assistance benefits, cash assistance and supplemental nutrition assistance program benefits.
12. Policies and procedures for managing complaints about transitional housing facilities.
13. Requirements for notifying an INDIVIDUAL'S family member or other emergency contact as designated by the individual under certain circumstances, including death.
B. A person or organization operating a transitional housing facility in this state that has failed to attain or maintain licensure of the transitional housing facility shall pay a civil penalty of up to $1,000.
C. To receive and maintain licensure, a transitional housing facility must comply with all federal, state and local laws, including the Americans with disabilities act of 1990 (p.l. 101-336; 104 stat. 327).
D. A treatment facility that is licensed by the department to treat behavioral health, mental health, substance use or co-occurring disorders may be located on the same campus as a transitional housing facility. The transitional housing facility shall be separately licensed pursuant to this article.
E. Once the director adopts the minimum standards as required in subsection A of this section, a person or organization may not establish, conduct or maintain in this state a transitional housing facility unless that person or organization holds a current and valid license issued by the department. The license is valid only for the establishment, operation and maintenance of a transitional housing facility. The licensee may not:
1. Imply by advertising or directory listing or otherwise imply that the licensee is authorized to perform services that are more specialized or of a higher degree of care than is authorized by this article and rules adopted pursuant to this article for transitional housing facilities.
2. Transfer or assign the license. A license is valid only for the premises occupied by the transitional housing facility at the time of the issuance of the license. END_STATUTE
START_STATUTE36-4203. Staff education and training
The department shall establish by rule annual continuing education and training requirements for employees, volunteers and contractors who work in a transitional housing facility.END_STATUTE
START_STATUTE36-4204. Fees; licensure; inspections; violation; classification; civil penalties
A. The director by rule shall establish fees for initial and annual licensure and a fee for the late payment of licensing fees that includes a grace period. The department shall deposit, pursuant to sections 35-146 and 35-147, ninety percent of the fees collected pursuant to this section in the health services licensing fund established by section 36-414 and ten percent of the fees collected pursuant to this section in the state general fund.
B. A transitional housing facility license does not expire and remains valid unless either:
1. The department subsequently revokes or suspends the license pursuant to this article and the rules adopted pursuant to this article.
2. The license is considered void because the licensee did not pay the licensing fee, civil penalties or provider agreement fees before the relevant due date or did not enter into an agreement with the department before the relevant due date to pay all outstanding fees or civil penalties.
C. The department shall conduct annual inspections to verify compliance with the requirements of this article and the rules adopted pursuant to this article. On a determination by the director that there is reasonable cause to believe a transitional housing facility is not adhering to the licensing requirements of this article, the director or any duly designated employee or agent of the director may enter on and into the premises of any transitional housing facility that is licensed or required to be licensed pursuant to this article at any reasonable time for the purpose of determining the state of compliance with this article, the rules adopted pursuant to this article and local fire ordinances or rules. An application for licensure under this article constitutes permission for and complete acquiescence in any entry or inspection of the premises during the pendency of the application and, if licensed, during the term of the license. If an inspection reveals that the transitional housing facility is not adhering to the licensing requirements established pursuant to this article, the director may take action authorized by this article.
D. Any transitional housing facility whose license has been suspended or revoked in accordance with this article is subject to inspection on application for relicensure or reinstatement of the transitional housing facility's license. If a transitional housing facility license is revoked in this state or any other state, the licensee of the transitional housing facility whose license was revoked may not reapply for any license issued pursuant to this title for a period of at least five years.
E. A transitional housing facility that knowingly operates in this state without a license in violation of this article is guilty of a class 6 felony and the director shall assess a civil penalty of not more than $1,000 for each violation. Each day the transitional housing facility operates without a license is a separate violation.
F. The director may impose a civil penalty on a person that violates this article or the rules adopted pursuant to this article in an amount of not more than $1,000 for each violation. Each day that a violation occurs constitutes a separate violation. The director shall issue a notice that includes the proposed amount of the civil penalty assessment. If a person requests a hearing to appeal an assessment, the director may not take further action to enforce and collect the assessment until the hearing process is complete. The director shall impose a civil penalty only for those days for which the violation has been documented by the department.
G. The department may impose sanctions and commence disciplinary actions against a licensed transitional housing facility, including revoking the license. A license may not be suspended or revoked under this article without affording the licensee notice and an opportunity for a hearing as provided in title 41, chapter 6, article 10.
H. The department may contract with a third party to assist the department with licensure and inspections. END_STATUTE
START_STATUTE36-4205. Posting; transitional housing facility information
The department shall post on its public website the name and telephone number, the department-issued license number, the local jurisdiction business license number and the licensure status of each licensed transitional housing facility in this state and shall update the list quarterly. END_STATUTE
START_STATUTE36-4206. Notification requirements; rules; sex offender registration
A. Transitional housing facility staff shall notify the department, in a department-provided format, immediately and not more than one business day after any of the following occurs:
1. The death of an individual residing in a transitional housing facility if the resident's death is required to be reported pursuant to section 11-593, including whether the death may have been drug-related.
2. A sex-related crime may have been committed at the transitional housing facility.
3. Any other incident specified in the rule by the department.
B. Transitional housing facility staff may not have a personal or intimate relationship with any individual residing in the transitional housing facility.
C. Transitional Housing facility staff shall contact law enforcement if the staff is informed that an individual residing in the transitional housing facility may have been involved in a sex-related crime.
D. A transitional housing facility licensee shall ensure that any individual residing in the licensee's transitional housing facility who is required to register pursuant to section 13-3821 registers within the statutorily required time frame after admission to the transitional housing facility. END_STATUTE