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REFERENCE TITLE: STOs; contributions; allowable uses |
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State of Arizona Senate Fifty-fifth Legislature First Regular Session 2021
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SB 1273 |
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Introduced by Senator Mesnard
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AN ACT
amending sections 43‑1501, 43‑1505, 43‑1601 and 43‑1603, Arizona Revised Statutes; relating to school tuition organization scholarships.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 43-1501, Arizona Revised Statutes, is amended to read:
43-1501. Definitions
In this chapter, unless the context otherwise requires:
1. "Allocate" includes reserving money monies for an award of a multiyear educational scholarship or tuition grant for a specific student.
2. "Career and technical education industry certification assessment" means an assessment for career and technical preparation programs for pupils.
2. 3. "Custodian" means a resident of this state who is a parent or an authorized out-of-home care provider or, if none, the legal guardian of a qualified student, as defined in section 43‑1505.
4. "Educational scholarship or tuition grant" includes monies for registration fees, extracurricular activities and standardized testing for college credit or readiness offered by a widely recognized and accepted educational testing organization.
5. "Extracurricular activities" means school‑sponsored activities that may require enrolled students to pay a fee in order to participate, including fees for:
(a) Band uniforms.
(b) Equipment or uniforms for varsity athletic activities.
(c) Scientific laboratory materials.
(d) In‑state or out‑of‑state trips that are solely for competitive events. Extracurricular activities do not include any senior trips or events that are recreational, amusement or tourist activities.
3. 6. "Fiscal year" means the fiscal year of the state as prescribed in section 35‑102.
4. 7. "Qualified school" means a preschool that offers services to students with disabilities, nongovernmental primary school or secondary school that is located in this state, and that does not discriminate on the basis of race, color, disability, familial status or national origin and that requires all teaching staff and personnel that have unsupervised contact with students to be fingerprinted. Qualified school does not include a charter school or programs operated by a charter school.
8. "Standardized testing for college credit or readiness" includes SAT, PSAT, ACT, advanced placement and international baccalaureate diploma examinations and other similar examinations.
9. "Widely recognized and accepted educational testing organization" means the college board, the ACT, the international baccalaureate and other organizations that are widely recognized and accepted by colleges and universities in the United States and that offer college credit and readiness examinations.
Sec. 2. Section 43-1505, Arizona Revised Statutes, is amended to read:
43-1505. Special provisions; corporate donations for displaced students and students with disabilities; definition
A. A school tuition organization that receives contributions for the purposes of section 20‑224.07 or 43‑1184 must use at least ninety per cent percent of those contributions to provide educational scholarships or tuition grants to qualified students.
B. The amount of an educational scholarship or a tuition grant that is issued by a school tuition organization under this section shall not exceed the cost combined costs of tuition and registration for the student to attend the qualified school and, as applicable, any additional costs for extracurricular activities, standardized testing for college credit or readiness and career and technical education industry certification assessments for the student while attending the qualified school or ninety per cent percent of the amount of state aid that otherwise would be computed for the student as provided in title 15, chapter 9, article 5, whichever is less. On request from a school tuition organization, the department of education shall provide to the school tuition organization in a timely manner the amount computed for the student under this subsection that represents the ninety per cent limitation percent limit prescribed in this subsection.
C. A school tuition organization shall require that student beneficiaries use the educational scholarships or tuition grants on a full‑time basis. If a child leaves the school before completing an entire school year, the school shall refund a prorated amount of the educational scholarship or tuition grant to the school tuition organization that issued the scholarship or grant. The school tuition organization shall allocate any refunds it receives under this subsection for educational scholarships or tuition grants.
D. Qualified students who receive an educational scholarship or tuition grant under this section shall be allowed to attend any qualified school of their custodians' choice.
E. For the purposes of this section, "qualified student" means a student, including a student who previously qualified for an educational scholarship or tuition grant under this section and continues to attend a qualified school, who has been either:
1. Placed in foster care pursuant to title 8, chapter 4 at any time before the student graduates from high school or obtains a general equivalency diploma.
2. Identified as having a disability under section 504 of the rehabilitation act (29 United States Code section 794) or identified at any time by a school district as a child with a disability as defined in section 15‑761 or a child with a disability who is eligible to receive services from a school district under section 15‑763.
Sec. 3. Section 43-1601, Arizona Revised Statutes, is amended to read:
43-1601. Definitions
In this chapter, unless the context otherwise requires:
1. "Allocate" includes reserving money MONIES for an award of a multiyear educational scholarship or tuition grant for a specific student.
2. "Career and technical education industry certification assessment" means an assessment for career and technical preparation programs.
3. "Educational scholarship or tuition grant" includes monies for registration fees, extracurricular activities and standardized testing for college credit or readiness offered by a widely recognized and accepted educational testing organization.
4. "Extracurricular activities" means school‑sponsored activities that may require enrolled students to pay a fee in order to participate, including fees for:
(a) Band uniforms.
(b) Equipment or uniforms for varsity athletic activities.
(c) Scientific laboratory materials.
(d) In‑state or out‑of‑state trips that are solely for competitive events. Extracurricular activities do not include any senior trips or events that are recreational, amusement or tourist activities.
2. 5. "Fiscal year" means the fiscal year of the state as prescribed in section 35‑102.
3. 6. "Qualified school" means a preschool that offers services to students with disabilities, nongovernmental primary school or secondary school that is located in this state, and that does not discriminate on the basis of race, color, disability, familial status or national origin and that requires all teaching staff and personnel that have unsupervised contact with students to be fingerprinted. Qualified school does not include a charter school or programs operated by a charter school.
7. "Standardized testing for college credit or readiness" includes SAT, PSAT, ACT, advanced placement and international baccalaureate diploma EXAMINATIONS and other similar EXAMINATIONS.
4. 8. "Students with disabilities" means students who have any of the following conditions:
(a) Hearing impairment.
(b) Visual impairment.
(c) Developmental delay.
(d) Preschool severe delay.
(e) Speech/language impairment.
9. "Widely recognized and accepted educational testing organization" means the college board, the ACT, the international baccalaureate and other organizations that are widely recognized and accepted by colleges and universities in the United States and that offer college credit and readiness examinations.
Sec. 4. Section 43-1603, Arizona Revised Statutes, is amended to read:
43-1603. Operational requirements for school tuition organizations; notice; qualified schools
A. A certified school tuition organization must be established to receive contributions from taxpayers for the purposes of income tax credits under sections 43‑1089 and 43‑1089.03 and to pay educational scholarships or tuition grants to allow students to attend any qualified school of their parents' choice.
B. To be eligible for certification and retain certification, the school tuition organization:
1. Must allocate at least ninety percent of its annual revenue from contributions made for the purposes of sections 43‑1089 and 43‑1089.03 for educational scholarships or tuition grants.
2. Shall not limit the availability of educational scholarships or tuition grants to only students of one school.
3. May allow donors to recommend student beneficiaries, but shall not award, designate or reserve scholarships solely on the basis of donor recommendations.
4. Shall not allow donors to designate student beneficiaries as a condition of any contribution to the organization, or facilitate, encourage or knowingly permit allow the exchange of beneficiary student designations in violation of section 43‑1089, subsection F, section 43‑1089.03, subsection F and section 43‑1089.04, subsection E.
5. Shall include on the organization's website, if one exists, the percentage and total dollar amount of educational scholarships and tuition grants awarded during the previous fiscal year to:
(a) Students whose family income meets the economic eligibility requirements established under the national school lunch and child nutrition acts (42 United States Code sections 1751 through 1793) for free or reduced‑price lunches.
(b) Students whose family income exceeds the threshold prescribed by subdivision (a) of this paragraph but does not exceed one hundred eighty-five percent of the economic eligibility requirements established under the national school lunch and child nutrition acts (42 United States Code sections 1751 through 1793) for free or reduced‑price lunches.
6. Must not award educational scholarships or tuition grants to students who are simultaneously enrolled in a district school or charter school and a qualified school.
C. A school tuition organization shall include the following notice in any printed materials soliciting donations, in applications for scholarships and on its website, if one exists:
Notice
A school tuition organization cannot award, restrict or reserve scholarships solely on the basis of a donor's recommendation.
A taxpayer may not claim a tax credit if the taxpayer agrees to swap donations with another taxpayer to benefit either taxpayer's own dependent.
D. In evaluating applications and awarding, designating or reserving scholarships, a school tuition organization:
1. Shall not award, designate or reserve a scholarship solely on the recommendation of any person contributing money to the organization, but may consider the recommendation among other factors.
2. Shall consider the financial need of applicants.
E. A taxpayer's contribution to a school tuition organization that exceeds the amount of the credit allowed by section 43‑1089 but does not exceed the amount of the credit allowed by section 43‑1089.03 is considered a contribution pursuant to section 43‑1089.03. A school tuition organization must use at least ninety percent of contributions made pursuant to section 43‑1089.03 for educational scholarships or tuition grants for students to whom any of the following applies:
1. Attended a governmental primary or secondary school as a full‑time students student as defined in section 15‑901 or attended a preschool program that offers services to students with disabilities at a governmental school for at least ninety days of the prior fiscal year and transferred from a governmental school to a qualified school.
2. Enroll in a qualified school in a kindergarten program or a preschool program that offers services to students with disabilities.
3. Are the dependent of a member of the armed forces of the United States who is stationed in this state pursuant to military orders.
4. Received an educational scholarship or tuition grant under paragraph 1, 2 or 3 of this subsection or under chapter 15 of this title if the student continues to attend a qualified school in a subsequent year.
F. In awarding educational scholarships or tuition grants from contributions made pursuant to section 43‑1089.03, a school tuition organization shall give priority to students and siblings of students on a waiting list for scholarships if the school tuition organization maintains a waiting list.
G. If an individual educational scholarship or tuition grant exceeds the school's COST OF tuition, registration, extracurricular activities, standardized testing for college credit or readiness and career and technical education industry certification assessments for the student, the amount in excess shall be returned to the school tuition organization that made the award or grant. The school tuition organization may allocate the returned monies as a multiyear award for that student and report the award pursuant to section 43‑1604, subsection A, paragraph 5, subdivision (b) or may allocate the returned monies for educational scholarships or tuition grants for other students.