House of Representatives

SB 1553

education; Arizona empowerment accounts.

Sponsors: Senators Murphy, Bundgaard, Crandall, et al.



Committee on Ways and Means


Caucus and COW


As Transmitted to the Governor


SB 1553 establishes Arizona Empowerment Scholarship Accounts for qualified students, consisting of 90 percent of the base level support for that particular student.


Equalization assistance for education (State Aid) is computed by determining the difference between a school district’s budget capacity for that fiscal year and the amount of revenue raised by the district through their local property tax levy (A.R.S. § 15-971). 


·          Establishes Arizona Empowerment Scholarship Accounts (Account) for the stated purpose of providing educational options for Arizona students.

·          Defines qualified school to mean a nongovernmental primary or secondary school or a preschool for handicapped students that is located in Arizona and that does not discriminate on the basis of race, color or national origin.

·          Defines qualified student to mean a child who is a resident of Arizona that is eligible to receive disability related services from a school district or who has been identified as disabled either by the school district or under federal guidelines and who did any of the following:

Ř        Attended a governmental primary or secondary school as a full-time student for at least the first 180 days of the prior fiscal year and transferred from that school to a qualified school.

Ř        Participated in the Account program in the previous year and whose parent renews the agreement.

Ř        Received a scholarship from a School Tuition Organization from corporate donations made for displaced students and students with disabilities, and who continues to attend a qualified school.

·          Defines department, eligible post secondary institution, parent, and Treasurer.

·          Allows the parent of a qualified students to enroll for an Account by signing an agreement to do all of  the following:

Ř        Provide an education in at least the subjects of reading, grammar, mathematics, social studies and science.

Ř        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.

Ř        Not accept a scholarship from a School Tuition Organization for the qualified student in the same year that the parent signs an Account agreement.

·          Specifies that a signed agreement constitutes required school attendance.

·          Stipulates that the use of monies deposited in the Account are limited to the following expenses:

Ř        Tuition or fees and required textbook costs at a qualified school.

Ř        Educational therapies or services from a licensed or accredited practitioner or provider.

Ř        Tutoring services provided by a tutor accredited by a state, regional or national accrediting organization.

Ř        Curriculum.

Ř        Tuition or fees for a nonpublic online learning program.

Ř        Fees for standardized testing and advanced placement or any other exams related to college or university admission.

Ř        Contributions to a federally qualified tuition program.

Ř        Tuition or fees and required textbook costs at an eligible postsecondary institution.

Ř        Account management fees.

·          Requires the state to deposit 90 percent of the base support level for the particular student into that student’s Account in exchange for the parent’s agreement to the terms of the Account.

Ř        Requires the Arizona Department of Education (ADE) to make the transfers on a quarterly basis.

·          Expands the statutory distribution of Special Education Fund monies to include deposits to Accounts.

·          Provides an exemption for Account monies from being included in taxable income.

·          Requires that parents annually renew the qualified student’s Account.

·          Prohibits qualified schools or service providers purchased with Account monies from sharing, refunding or rebating any Account monies with the parent or qualified child.

·          Specifies that after a qualified student’s graduation from a postsecondary institution or after four consecutive years of non-enrollment after graduation, the qualified student’s Account shall be closed and any remaining funds in the Account be returned to the state.

·          Allows the state Treasurer to contract with private financial management firms to manage the Accounts.

·          Requires ADE to conduct, or contract for random annual Account audits to ensure compliance.

Ř        Allows ADE to conduct or contract for audits of Accounts as needed to ensure compliance.

·          Allows ADE to remove any parent or qualified student’s eligibility for an Account and to notify the state Treasurer.

Ř        Permits parents to appeal ADE’s decision.

Ř        Allows ADE to refer cases of substantial misuse of monies to the Attorney General for investigation if evidence of fraudulent use of an Account is obtained.

·          Allows the state Treasurer to deduct up to 3 percent of the amount of student state aid from each Account for administrative costs.

·          Allows ADE to adopt rules for the administration of Accounts.

·          Prohibits government agencies from exercising control or supervision over any nonpublic school or home school.

·          Specifies that any qualified school that accepts an Account derived payment from a parent is not an agent of the state or federal government.

·          States that qualified schools are not required to alter their creed, practices, admissions policies or curriculum in order to accept students that pay tuition or fees with Account monies.

·          Stipulates that in any legal proceeding challenging the measure’s application, the state bears the legal burden of establishing the necessity of the law and that it does not impose any undue burden on qualified schools.

·          Outlines the deadlines for parents to enter into an Account agreement with ADE for the 2011 fall semester and 2012 spring semester and specifies that ADE has 30 days to process the agreements and notify the state Treasurer of the total number of qualified students who have properly filled out agreements for Accounts.




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Fiftieth Legislature

First Regular Session  3          April 12, 2011


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