Fifty-fifth Legislature

First Regular Session

Senate: APPROP DPA/SE 6-4-0-0 | 3rd Read 16-14-0-0

House: WM DP 6-4-0-0

SB 1118: STO; scholarships; increase

Sponsor:  Senator Gowan, LD  14

Caucus & COW


Expands the list of students eligible for a scholarship from a scholarship tuition organization (STO), and increases the maximum scholarship amount that an STO may award to a student with contributions from corporations and insurers.  


An STO is defined in statute as a nonprofit established to receive income tax credit contributions from corporations and individuals and to disburse educational scholarships or tuition grants to allow qualifying students to attend any qualified school of their parents' choice (A.R.S. § 43-1184, 20-224.07, 43-1603). An STO must allocate at least 90% of its annual revenue from taxpayer contributions for educational scholarships or tuition grants (A.R.S. § 43-1603). To qualify for an STO scholarship, a student must: 1) have been placed in foster care at any time before graduating from high school or obtaining a general equivalency diploma; 2) have a disability as defined under federal law; 3) have attended a governmental school that offers services to students with disabilities; or 4) be the dependent of a member of the military who is stationed in Arizona (A.R.S. § 43-1505, 43-1603).

An STO that receives corporate contributions must use at least 90% of those contributions to provide educational scholarships or tuition grants to low-income students. To qualify for low-income STO corporate scholarships or grants, a student's family income must not exceed 185% of the income limit required to qualify for reduced-price lunches under the National School Lunch and Child Nutrition Acts. (A.R.S § 43-1504)


1.   ☐ Prop 105 (45 votes)	     ☐ Prop 108 (40 votes)      ☐ Emergency (40 votes)	☒ Fiscal NoteExpands the list of eligible STO scholarship recipients to include students who:

a)   Were homeschooled before enrolling in a qualified school;

b)   Moved to Arizona from out of state before enrolling in a qualified school; and

c)   Participated in an Arizona empowerment scholarship account and did not renew the account or accept the scholarship in order to accept an STO scholarship. (Sec. 1, 2)

2.   Increases the maximum scholarship amount that an STO may issue for students who are in 9th-12th grades from $5,500 to $7,500. (Sec. 1)

3.   Increases the growth rate of the maximum scholarship amount from $100 per year to $200 per year. (Sec. 1)

4.   Conforms the maximum scholarship amount that an STO may for students who are in a preschool program for disabled students, a kindergarten program or the 1st-8th grades from $4,200 to the current amount of $5,600. (Sec. 1)

5.   Makes technical and conforming changes. (Sec. 1, 2)



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9.                     SB 1118

10.  Initials VP/NM       Page 0 Caucus & COW


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