SB1743 - 571R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 8, chapter 4, article 4, Arizona Revised Statutes, is amended by adding section 8-521.03, to read:

START_STATUTE8-521.03. Extended foster care comprehensive service model; extended foster care success coaching program; quality review committee; reporting requirements; fund; definitions

A. WIthin ten days after the effective date of this section, the department shall prepare A scope of work for an extended foster care comprehensive service model that includes SUPportive services and required case management provided by contracted community providers for young adults who participatE in the extended foster care program. The extended foster care comprehensive service model scope of work shall include:

1. Weekly engagement with each young adult.

2. Life skills training.

3. Mental and physical health and well-being.

4. Relational permanency.

5. Education and enrollment assistance.

6. Assistance with accessing safe housing attainment and stability for young adults.

7. Career and employment planning and readiness.

8. Assistance with accessing transportation services for young adults.

9. Flexible funding to support the unique needs of the young adult, including educational services and job training or workforce development.

b. The extended foster care comprehensive service model shall include an EXTENDED foster care success coaching program for young adults in the extended foster care program. Each extended foster care success coach shall have a caseload of not more than twenty young adults. the extended foster care success coaching program shall be based on a practice that is youth driven and shall do the following:

1. PROMOTe PERMANENT CONNECTIONS.

2. sUPPORT THE DEVELOPMENT OF AN EDUCATIONAL FOUNDATION AND SKILL SET that enables YOUNG ADULTS TO GAIN AND MAINTAIN EMPLOYMENT to SUPPORT their FINANCIAL NEEDS.

3. Assist YOUNG ADULTS to RESIDE IN SAFE, STABLE AND SECURE HOUSING.

4. liNK YOUNG ADULTS TO APPROPRIATE SERVICES THAT ADDRESS PHYSICAL AND BEHAVIORAL HEALTH NEEDS.

5. bUILD SKILLS FOR DEVELOPing PERSONAL AGENCY.

6. eNSURe that YOUNG ADULTS HAVE THE COGNITIVE AND SOCIAL-EMOTIONAL COMPETENCIES ESSENTIAL TO SURVIVAL.

C. THE DEPARTMENT SHALL SUPERVISE AND MONITOR the SUCCESS OF THE EXTENDED FOSTER CARE SUCCESS COACHING PROGRAM.

D. Each extended foster care success coach shall:

1. Successfully complete a department-administered foster care success coach training program.

2. Possess a bachelor's or associate's degree or have equivalent credits equal to an associate's degree. In lieu of a degree or credits, an extended foster care success coach may possess skills that the coach acquired through alternative routes such as relevant job training, community college attendance, military service or an apprenticeship.

3. Have experience working with youth or young adults.

4. exhibit the belief that all young adults have the capacity to be successful in life.

E. The extended foster care success coaching program shall:

1. Operate from an EVIDENCE-based framework.

2. Ensure that the young adults served are aware of their rights to normalcy.

3. assist young adults to advocate with caregivers to experience activities and opportunities that meet individual interests.

4. Support caregivers in identifying root causes of behaviors that present barriers to transition and provide opportunities that assist young adults in healing and addressing underlying trauma.

5. Develop feedback that allows young adults to communicate their needs and satisfaction with provided services.

6. Deliver interventions that are tailored to each young adult's strengths and experiences.

F. The department shall solicit agencies to administer the extended foster care comprehensive service model within THIRTY days after the effective date of this section and select an agency within NINETY days after the effective date of this section. The department shall implement the extended foster care comprehensive service model within one hundred fifty days after the effective date of this section.

G. The department shall establish an extended foster care quality review committee within the department consisting of department staff members. The committee shall confirm that a young adult who participates in the extended foster care program meets all of the following:

1. the Eligibility criteria.

2. Has connections to supportive adults who are actively involved in the young adult's life.

3. Has a person-centered case and transition plan that supports the young adult's identified goals and FUTURE planning.

4. Is ACQUIRING individualized skills to develop the tools that are needed to thrive outside of the extended foster care program.

H. On or before November 1 of each year, the department shall submit to the joint legislative budget committee, the Senate health and human services committee, or its successor committee, and the house of representatives health and human services committee, or its successor committee, a report on the extended foster care comprehensive service model. THe report shall include data and statistics on:

1. The support and services to be offered by the extended foster care comprehensive service model.

2. The extended foster care program's Eligibility requirements.

3. The young adult's program responsibilities.

4. Case and transition planning opportunities.

5. Health insurance coverage for young adults in the extended foster care program.

6. Educational opportunities for young adults in the extended foster care program.

7. Opportunities for mentors through the extended foster care program.

8. Transportation services for young adults in the extended foster care program, including obtaining a driver license.

9. Housing, including semisupervised living arrangements if those arrangements best meet the young adult's needs.

I. The DEPARTMENT shall provide to the joint legislative budget committee a quarterly report that includes all of the following:

1. The number of young adults served in the extended foster care comprehensive service model.

2. The young adult's PARTICIPATION in regular reviews with extended foster care staff.

3. Other performance measures as updated by the extended foster care quality review committee and as determined by the chairperson of the joint legislative budget committee.

J. The extended foster care comprehensive service model fund is established consisting of legislative appropriations. The department shall administer the fund. Monies in the fund are continuously appropriated and are exempt from the provisions of section 35-190 relating to lapsing of appropriations. The department shall use monies in the fund for the purposes prescribed in this section.

K. For the purposes of this section:

1. "Department" means the department of child safety.

2. "Young adult" means a person who is at least seventeen and one-half years of age and under twenty-one years of age and who participates or will participate in the extended foster care program established pursuant to section 8-521.02. END_STATUTE

Sec. 2. Section 36-573, Arizona Revised Statutes, is amended to read:

START_STATUTE36-573. Annual report; group home incident reports; contracts

On or before January 1, 2024 and each year thereafter, the department of economic security shall provide an annual report to the chairpersons of the health and human services committees of the senate and the house of representatives, or their successor committees, the directors of the Arizona health care cost containment system and the department of health services and the designated entity conducting the developmental disabilities group home monitoring pilot program pursuant to section 36-595.03 and shall provide a copy of the report to the secretary of state. The report shall include at least the following information:

1. The number of incident reports that were received from group homes in the preceding two years:

(a) Categorized by level of severity.

(b) That resulted in any type of contract sanction.

(c) That involved medication errors. The report shall include the total number of times medication was distributed to clients.

(d) That resulted in changes to a behavioral treatment plan.

(e) That required additional staff training mandated by the division after review of the incident report.

(f) That involved law enforcement.

(g) Aggregated by service provider and individual group home without identifying the specific location or name of the home.

2. With respect to group home contracts and expenditures:

(a) The number of group home contracts by service provider.

(b) For each group home contract, the annual amount the division paid the service provider for the group home services provided.

(d) The number of any type of contract sanction broken down by reason for the sanction.

(e) The number of service providers from whom the division recouped payments for group home services in the preceding year for medicaid fraud.

3. The number of medicaid fraud investigations of service providers of group home services. END_STATUTE

Sec. 3. Section 36-595.03, Arizona Revised Statutes, is amended to read:

START_STATUTE36-595.03. Developmental disabilities group home monitoring program; clients with complex needs; designated entity duties; expedited referral system; reporting requirements; program review; definition

A. The developmental disabilities group home monitoring pilot program is established in the department. Subject to available appropriations, the department shall oversee the pilot program for three years and contract with the entity that has been designated by this state to operate the protection and advocacy system for persons with developmental disabilities in this state pursuant to the developmental disabilities assistance and bill of rights act of 2000 (42 United States Code sections 15041 through 15045) to conduct the pilot program.

B. The scope of the pilot program shall require the designated entity, at a minimum, to shall do all of the following beginning January 1, 2023 2026:

1. Monitor in person the group homes that provide services to clients with complex needs to determine, at a minimum, whether:

(a) The client with complex needs receives the services identified in the client's person-centered service plan of the client with complex needs, including medication monitoring and habilitation treatment, as applicable.

(b) The provision of services identified in the person-centered service plan of the client with complex needs has been effective in addressing the client's complex needs.

(c) The services have resulted in a reduction in A behavior treatment plan is in place, is compliant with department rules and has had a positive impact on behaviors that interfered with the ability of the client with complex needs to live safely in the community.

(d) All physical interventions used by the group home staff have complied with the behavioral treatment plan of the client with complex needs and applicable state laws.

2. Investigate quality of care complaints received by the designated entity pursuant to subsection C of this section concerning any group home funded by the department.

2. Use a monitoring tool to assess whether the following criteria were satisfied:

(a) The client with complex needs received the physical health and behavioral health services that the client requires as outlined by the client's health care providers and person-centered service plan, including regular physical activity with modification for the client's physical disability, if any.

(b) The client with complex needs had the client's dietary requirements met, including compliance with all dietary orders from the client's health care providers.

(c) The food provided in the group home met generally accepted dietary standards and guidelines for healthy Americans in accordance with the United States department of agriculture dietary guidelines.

(d) The guardian of the client with complex needs and the client, as applicable, were included in all decisions made regarding the client and informed of any changes to the client's regular activities or daily routine.

(e) Group home direct care staff demonstraTED the knowledge and skills required to meet the medical and behavioral health care needs of the client with complex needs as outlined in the client's person-centered service plan and behavior treatment plan, if applicable.

(f) The client with complex needs had access to and used all prescribed adaptive equipment.

(g) Group home direct care staff worked with the behavioral health providers serving the client with complex needs as allowed by the client or client's guardian and as outlined in the client's person-centered service plan and behavior treatment plan, if applicable.

(h) The group home of the client with complex needs COMPLIED with applicable incident reporting policies, including documenting and reporting physical interventions and any other emergency measures taken.

3. Complete follow-up monitoring reviews for group homes that were monitored pursuant to paragraph 1 of this subsection and that the DESIGNATED entity identified as having significant quality of care concerns.

3. 4. Compile and complete both of the following:

(a) Monthly reports to the department detailing the results of all monitoring from the previous month, including identified systemic issues and recommendations for improvement.

(b) A comprehensive annual report of all observations and outcomes during the preceding year.

C. On or before January 1, 2023 2026, the department shall establish an expedited referral system to ensure that copies of all incident reports, quality of care complaints, investigation records and client service requests for each group home monitored pursuant to subsection B, paragraph 1 of this section are forwarded to the designated entity for investigation review and analysis pursuant to this section. The department shall identify quality of care complaints related to abuse, neglect and client safety as priorities for investigation. If the designated entity substantiates an allegation in a quality of care complaint identifies concerns during its follow-up monitoring reviews, the information shall be provided to the department, which shall share the allegation with the service provider, and the independent oversight committee on persons with developmental disabilities established by section 41-3801.

D. The department shall:

1. Educate service providers on the requirements of the developmental disabilities group home monitoring pilot program and the role of the designated entity.

2. Provide the designated entity with ACCESS to all necessary information to complete the monitoring requirements pursuant to subsection B of this section.

3. Provide the designated entity with quarterly written reports responding to the issues identified in the designated entity's monthly reports from the previous quarter, including identifying the actions taken in response to the identified systemic issues and recommendations received from the designated entity.

4. Publish on the department's public website all of the following:

(a) All of the designated entity's monthly and annual reports pursuant to subsection B, paragraph 4 of this section.

(b) All quarterly reports from the department pursuant to paragraph 3 of this subsection.

(c) The monitoring tool and related instructions used by the designated entity to monitor group homes pursuant to this section.

E. On or before December 31, 2025 January 15, 2026 and each January 15 thereafter, the designated entity shall report to the governor, the president of the senate and the speaker of the house of representatives, and provide a copy of the report to the secretary of state and the independent oversight committee on persons with developmental disabilities established by section 41-3801, regarding the observations and outcomes of the pilot program, including systemic issues that were identified, the quality of services provided to persons with developmental disabilities who have complex needs in this state and any recommendations for service improvements.

F. On or before January 1, 2030, the health and human services committees, or their successor committees, in the senate and the house of representatives shall:

1. Review the reports submitted pursuant to subsection E of this section and the department's responses pursuant to subsection D, paragraph 3 of this section to the designated entity's monthly reports, including observations and outcomes of the program, systemic issues that were identified, the quality of services provided to persons with developmental disabilities who have complex needs in this state, any recommendations for service improvements and actions taken by the department.

2. Determine whether the program should be continued, modified or discontinued.

F. G. For the purposes of this section, "client with complex needs" or "client" means a client with dual disorders, including psychiatric disorders and developmental disabilities, who engages in behaviors that are disruptive, socially inappropriate or harmful or dangerous to self or others, that interfere with functioning and quality of life or that may cause destruction of property.END_STATUTE

Sec. 4. Section 41-608, Arizona Revised Statutes, is amended to read:

START_STATUTE41-608. Veterans' donations fund; transfer; grants

A. The veterans' donations fund is established consisting of monies, gifts and contributions donated to the department and monies deposited pursuant to sections 28-2414, 28-2428, 28-2431, 28-2447, 28-2454, 28-2470.10, 28-2473, 28-2474, 28-2475, 28-2476 and 43-620. The department shall administer the fund. Monies in the fund are continuously appropriated. The monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations. The department shall annually transfer fifteen percent of all revenues received by the department that are deposited in the veterans' donations fund pursuant to this section to the subaccount established pursuant to section 41-608.01 in the state homes for veterans trust fund. The department shall adopt rules or policies for grants of less than $5,000 that encourage as much competition as practicable.

B. The director or the director's designee may solicit and receive donations, including in-kind donations, from the public for veterans. The director shall deposit, pursuant to sections 35-146 and 35-147, the monetary donations in the veterans' donations fund. Monies in the fund are subject to state auditing procedures. Except for monies deposited pursuant to sections 28-2431 and 28-2447, the donations may be used for the benefit of the veterans within this state as grants, subject to chapter 24 of this title, if applicable.

C. The director shall establish a separate subaccount in the veterans' donations fund for the deposit of monies received pursuant to section 28-2431, subsection C. The monies in the subaccount shall be used for the construction and maintenance of the enduring freedom memorial authorized pursuant to section 41-1363 for placement in Wesley Bolin Plaza.

D. The director shall establish a separate subaccount in the veterans' donations fund for the deposit of monies received pursuant to section 28-2447, subsection F. The monies in the subaccount shall be used for the benefit of women veterans in this state, including providing shelter to homeless women veterans as grants, subject to chapter 24 of this title, if applicable.

E. The director shall establish a separate subaccount in the veterans' donations fund for the deposit of monies received pursuant to section 28-2454, subsection C. The first $32,000 in the subaccount shall be reimbursed to the person that provides the $32,000 pursuant to section 28-2454, subsection A. The director shall annually allocate monies from the subaccount to a foundation that is qualified under section 501(c)(3) of the United States internal revenue code for federal income tax purposes and that is the nation's oldest and largest provider of need-based scholarships to children of United States military members. The foundation must:

1. Have been in existence for at least fifty-two years.

2. Have provided more than thirty-three thousand scholarships that are valued at almost $90,000,000.

3. Have a mission that includes honoring marines and educating their children.

4. Award scholarship monies to children of marines and navy corpsmen who were killed or wounded in combat or who have demonstrated financial need.

F. The director shall establish a separate subaccount in the veterans' donations fund for the deposit of monies received pursuant to section 28-2470.10, subsection C. The first $32,000 in the subaccount shall be reimbursed to the person that provides the $32,000 pursuant to section 28-2470.10, subsection A. The director shall annually allocate monies from the subaccount to a foundation that is qualified under section 501(c)(3) of the United States internal revenue code for federal income tax purposes. The foundation must:

1. Have been in existence for at least twenty years.

2. Have a mission that includes providing college scholarships to:

(a) The sons and daughters of those who have served the United States honorably as soldiers in the United States army.

(b) The spouses of enlisted soldiers on active duty in the United States army.

3. Envision increasing its fundraising and visibility to encourage more applicants to apply for scholarships and to provide larger scholarships to an increasing number of deserving applicants to both:

(a) Reward army families for the sacrifices that army soldiers make every day to serve their nation.

(b) Help the spouses and children of army soldiers become leaders in society.

4. Award scholarship monies to:

(a) Children of former United States army members who were killed while serving in the United States army or who received an honorable discharge or medical discharge.

(b) Children of united states army members in good standing serving in regular active duty, active duty reserve or active duty national guard United States army members in good standing.

(c) Spouses of enlisted united states army members in good standing serving in regular active duty, active duty reserve or active duty national guard United States army members in good standing.

G. The director shall inventory and account for the use of any tangible personal property donated to the fund.

h. the department may use up to $150,000 from the veterans' donations fund each fiscal year to administer this section. In addition to any other full-time equivalent positions authorized by law, the department is authorized two full-time equivalent positions to administer this section.

H. I. On notice from the director, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund. END_STATUTE

Sec. 5. Section 41-608.01, Arizona Revised Statutes, is amended to read:

START_STATUTE41-608.01. State homes for veterans trust fund; purpose; subaccount

A. The state homes for veterans trust fund is established. The director shall administer the fund for the sole purpose of operating and maintaining state-operated nursing and domiciliary homes for Arizona veterans.

B. The fund consists of monies deposited by the director from monies generated by operating the Arizona veterans' homes, and monies deposited pursuant to section 41-603.01 and monies transferred by the department pursuant to section 41-608.

c. The director shall establish a separate subaccount in the fund for monies deposited pursuant to section 41-608, subsection A. The monies in the subaccount shall be used for any of the following purposes:

1. to support the various needs of the veterans residing at the nursing and domiciliary homes.

2. to Purchase any necessary equipment for the NURSING AND DOMICILIARY HOMES.

3. For any necessary IMPROVEMENTS for the nursing and DOMICILIARY homes.

4. for Any ongoing MAINTENANCE required for the NURSING AND DOMICILIARY HOMES.

C. d. Monies in the fund are subject to annual appropriation by the legislature. The fund is exempt from the provisions of section 35-190 relating to lapsing of appropriations. Any monies in the fund remaining unexpended or unencumbered at the end of the fiscal year do not revert to the state general fund.

D. e. On notice from the director, the state treasurer shall invest and divest monies in the fund and subaccount as provided by section 35-313, and monies earned from investment shall be credited to the fund and subaccount. END_STATUTE

Sec. 6. Title 41, chapter 14, article 1, Arizona Revised Statutes, is amended by adding section 41-1970, to read:

START_STATUTE41-1970. Out-of-school time grant program; fund; report; definitions

A. The out-of-school time grant program is established in the department to expand out-of-school time child care for children who are at least five and not older than twelve years of age and who require child care either when the children are out-of-school or during periods of time when school instruction is not being conducted.

B. The grant program shall:

1. Increase the number of eligible pupils with access to child care before school, after school or during periods of time when school instruction is not being conducted.

2. Increase access to and the affordability of child care for children and their families.

3. Enable employers to attract and retain a talented workforce.

4. Reduce the cost of child care to participating families by at least two-thirds.

C. The department shall do all of the following:

1. Develop an annual grant application process.

2. Provide grants to assist with the costs of child care to eligible grantees who participate in the grant program.

3. Monitor eligible grantees to ensure grant program and fiscal compliance.

4. Develop metrics to measure the success of the grant program.

5. Allocate at least thirty percent of grant monies for eligible grantees in rural communities, which may be used in any location in this state if there are insufficient grant applications from rural communities.

D. The out-of-school time grant program fund is established consisting of legislative appropriations. The department may not use more than five percent of the monies deposited in the fund to administer the fund. Monies in the fund are continuously appropriated and are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

E. On or before august 1, 2026 and each year thereafter, the department shall submit an annual report to the governor, the president of the senate and the speaker of the house of representatives and shall provide a copy of this report to the secretary of state. The report shall include all of the following:

1. The total number of children who are served by the out-of-school time grant program, categorized by age of the child and the county where the child is served. The information provided pursuant to this paragraph may not include any information that identifies or can be used to identify a child.

2. The locations of programs, categorized by county.

3. The number of new and sustained child care slots.

F. The department may develop policies and procedures that are necessary to implement this section.

G. For the purposes of this section:

1. "Eligible grantee" means a nonprofit organization, public school and public or private child care provider that has demonstrated experience providing child care before school, after school or during periods of time when school instruction is not being conducted.

2. "Eligible pupils" means children who are at least five and not older than twelve years of age and who come from a household earning $150,000 or less per year. END_STATUTE

Sec. 7. Repeal

Section 41-3025.06, Arizona Revised Statutes, is repealed.

Sec. 8. Title 41, chapter 27, article 2, Arizona Revised Statutes, is amended by adding section 41-3027.09, to read:

START_STATUTE41-3027.09. Arizona department of housing; termination July 1, 2027

A. The Arizona department of housing terminates on July 1, 2027.

B. Title 41, chapter 37 and this section are repealed on January 1, 2028.END_STATUTE

Sec. 9. Section 41-3953, Arizona Revised Statutes, is amended to read:

START_STATUTE41-3953. Department powers and duties; definition

A. The department is responsible for establishing policies, procedures and programs that the department is authorized to conduct to address the affordable housing issues confronting this state, including housing issues of low income low-income families, moderate income moderate-income families, housing affordability, special needs populations and decaying housing stock. Among other things, the department shall provide to qualified housing participants and political subdivisions of this state financial, advisory, consultative, planning, training and educational assistance for the development of safe, decent and affordable housing, including housing for low and moderate income households. The department is responsible for maintaining and enforcing standards of quality and safety for manufactured homes, mobile homes and factory-built buildings.

B. Under the direction of the director, the department shall:

1. Establish guidelines applicable to the programs and activities of the department for the construction and financing of affordable housing and housing for low and moderate income households in this state. These guidelines shall meet or exceed all applicable state or local building and health and safety code requirements and, if applicable, the national manufactured home construction and safety standards act of 1974 and title VI of the housing and community development act of 1974 (P.L. 93-383 96-399, as amended by P.L. 95-128, 96-153 and 96-339). Guidelines established pursuant to this paragraph do not apply to the department's activities prescribed in section 35-726, subsection E.

2. Accept and allocate any monies as from time to time may be appropriated by the legislature for the purposes set forth in this article.

3. Perform other duties necessary to administer this chapter.

4. Perform the duties prescribed in sections 35-726 and 35-728.

5. Stimulate and encourage all local, state, regional and federal governmental agencies and all private persons and enterprises that have similar and related objectives and purposes, cooperate with the agencies, persons and enterprises and correlate department plans, programs and operations with those of the agencies, persons and enterprises.

6. Conduct research on its own initiative or at the request of the governor, the legislature or state or local agencies pertaining to any department objectives.

7. Provide information and advice on request of any local, state or federal agencies, private persons and business enterprises on matters within the scope of department activities.

8. Consult with and make recommendations to the governor and the legislature on all matters concerning department objectives.

9. Make annual reports to the governor and the legislature on its activities, including the geographic location of its activities, its finances and the scope of its operations. The annual reports submitted pursuant to this paragraph shall also include all of the following outcome-based metrics for department-funded projects and initiatives:

(a) The number of affordable housing units developed in this state.

(b) The number of individuals housed in permanent supportive housing environments in the past year and related housing outcomes for those exiting permanent supportive housing for which the department has conveyed funding.

10. Maintain and enforce standards of quality and safety for manufactured homes, mobile homes and factory-built buildings and enforce rules adopted by the board pursuant to section 41-4010.

11. As a condition of funding for emergency shelter and transitional housing programs that receive grants or other sources of funding from the department, adopt policies and procedures concerning responding to an alleged sale, manufacture or possession of dangerous drugs and narcotic drugs as defined in section 13-3401. These policies shall include clear signage on the facilities denoting a drug-free zone.

C. Under the direction of the director, the department may:

1. Assist in securing construction and mortgage financing from public and private sector sources.

2. Assist mortgage financing programs established by industrial development authorities and political subdivisions of this state.

3. Assist in the acquisition and use of federal housing assistance programs pertinent to enhance the economic feasibility of a proposed residential development.

4. Assist in the compliance of a proposed residential development with applicable federal, state and local codes and ordinances.

5. Prepare and publish planning and development guidelines for the establishment and delivery of housing assistance programs.

6. Contract with a federal agency to carry out financial work on the federal agency's behalf and accept payment for the work.

7. Subcontract for the financial work prescribed in paragraph 6 of this subsection and make payments for that subcontracted work based on the expectation that the federal agency will pay for that work.

8. Accept payment from a federal agency for work prescribed in paragraph 6 of this subsection and deposit those payments in the Arizona department of housing program fund established by section 41-3957.

9. Contract for the services of outside advisers, consultants and aides reasonably necessary or desirable to enable the department to adequately perform its duties.

10. Contract for and incur obligations reasonably necessary or desirable within the general scope of department activities and operations to enable the department to adequately perform its duties.

11. Use any media of communication, publication and exhibition in the dissemination of information, advertising and publicity in any field of its purposes, objectives or duties.

12. Adopt rules deemed necessary or desirable to govern its procedures and business.

13. Contract with other agencies in furtherance of any department program.

14. Use monies, facilities or services to provide contributions under federal or other programs that further the objectives and programs of the department.

15. Accept gifts, grants, matching monies or direct payments from public or private agencies or private persons and enterprises for the conduct of programs that are consistent with the general purposes and objectives of this article and deposit these monies in the Arizona department of housing program fund established by section 41-3957.

16. Establish and collect fees and receive reimbursement of costs in connection with any programs or duties performed by the department and deposit the fees and cost reimbursements in the Arizona department of housing program fund established by section 41-3957.

17. Provide staff support to the board of manufactured housing.

D. For the purposes of this section, the department is exempt from chapter 23 of this title.

E. The department is the designated state public housing agency as defined in the United States housing act of 1937 (42 United States Code sections 1401 through 1440) for the purpose of accepting federal housing assistance monies and may participate in the housing assistance payments program. Federal monies may be secured for all areas of this state subject only to the limitations prescribed in subsection F of this section.

F. For areas of this state where an existing public housing authority has not been established pursuant to section 36-1404, subsection A, the department acting as a public housing agency may undertake all activities under the section 8 tenant-based rental housing assistance payment program, except that the department shall not undertake a section 8 tenant-based rental housing assistance payment program within the boundaries of a city, town or county unless authorized by resolution of the governing body of the city, town or county. If the department accepts monies for a section 8 tenant-based rental housing assistance payment program for areas of this state where an existing public housing authority has been established pursuant to section 36-1404, subsection A, the department shall only accept and secure federal monies to provide housing for the seriously mentally ill or other populations with disabilities. The department may accept and secure federal monies for undertaking all contract administrator activities authorized under a section 8 project-based rental housing assistance payment program in all areas of this state and this participation does not require the authorization of any local governing body.

G. The department shall not itself directly own, construct, operate or rehabilitate any housing units, except as may be necessary to protect the department's collateral or security interest arising out of any department programs.

H. Notwithstanding any other provision of this section, the department may obligate monies as loans or grants applicable to programs and activities of the department for the purpose of providing housing opportunities for low or moderate income households or for housing affordability or to prevent or combat decaying housing stock. Unless otherwise required by federal or state law, any loan repayments shall be deposited in the Arizona department of housing program fund established by section 41-3957.

I. For any construction project financed by the department pursuant to subsection C of this section, except for contract administration activities in connection with the project-based section 8 program, the department shall notify a city, town, county or tribal government that a project is planned for its jurisdiction and, before proceeding, shall seek comment from the governing body of the city, town, county or tribal government or an official authorized by the governing body of the city, town, county or tribal government. The department shall not interfere with or attempt to override the local jurisdiction's planning, zoning or land use regulations.

J. The department has the administrative responsibility through its hearing officer function concerning alleged violations of the Arizona mobile home parks residential landlord and tenant act under title 33, chapter 11.

K. The Arizona department of housing shall act consistently with the minimum standards of the United States department of housing and urban development so as to be designated the "state inspector" for manufactured homes and related industries. The Arizona department of housing shall implement all existing laws and regulations established by the federal government, its agencies and this state for that purpose.

L. For the purposes of this section, "permanent supportive housing" means long-term housing assistance paired with supportive services that are aimed at individuals experiencing homelessness or individuals with special needs.END_STATUTE

Sec. 10. Section 41-3955, Arizona Revised Statutes, is amended to read:

START_STATUTE41-3955. Housing trust fund; purpose; annual report

A. The housing trust fund is established, and the director shall administer the fund. The fund consists of monies from unclaimed property deposited in the fund pursuant to section 44-313, monies transferred pursuant to section 35-751 and investment earnings.

B. On notice from the department, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.

C. Except as provided in subsection D of this section, fund monies shall be spent on approval of the department for developing projects and programs connected with providing housing opportunities for low and moderate income households and for housing affordability programs. Pursuant to section 44-313, subsection A, A portion of fund monies shall be used exclusively for housing in rural areas.

D. Fund monies may be spent on constructing or renovating facilities and on housing assistance, including support services, for persons who have been determined to be seriously mentally ill and to be chronically resistant to treatment. fund monies shall be awarded in the following order of priority for the first four months of each fiscal year:

1. CONSTRUCTING OR RENOVATING EMERGENCY SHELTER FACILITIES or for any operational expenses for emergency shelter services.

2. Constructing or renovating transitional housing units.

3. Constructing or renovating other types of shelter or housing as determined by the department to best serve the needs of INDIVIDUALS who have been determined to be seriously mentally ill and chronically resistant to treatment.

E. For the purposes of subsection C of this section, in approving the expenditure of monies, the director shall give priority to funding projects that provide for operating, constructing or renovating facilities for housing for low-income families and that provide housing and shelter to families that have children.

F. After the four-month period prescribed in subsection D of this section, fund monies that have not been awarded or encumbered pursuant to the priority list prescribed in subsection D of this section may be spent based on stakeholder feedback.

G. The department shall submit for review by the joint legislative budget committee all programs established by the department and funded by the housing trust fund pursuant to this section.

F. H. The director shall report annually to the legislature on the status of the housing trust fund. The report shall include a summary of facilities for which funding was provided during the preceding fiscal year and shall show the cost and geographic location of each facility and the number of individuals benefiting from the operation, construction or renovation of the facility. The report shall also include the number of individuals who benefit from housing assistance pursuant to subsection D of this section. The report shall be submitted to the president of the senate and the speaker of the house of representatives, and a copy provided to the secretary of state, not later than September 1 of each year.

G. I. Monies in the housing trust fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

H. J. An amount not to exceed ten percent of the housing trust fund monies may be appropriated annually by the legislature to the department for administrative costs in providing services relating to the housing trust fund.

I. K. For any construction project financed by the department pursuant to this section, the department shall notify a city, town, county or tribal government that a project is planned for its jurisdiction and, before proceeding, shall seek comment from the governing body of the city, town, county or tribal government or an official authorized by the governing body of the city, town, county or tribal government. The department shall not interfere with or attempt to override the local jurisdiction's planning, zoning or land use regulations.END_STATUTE

Sec. 11. Section 41-3955.02, Arizona Revised Statutes, is amended to read:

START_STATUTE41-3955.02. Military transitional housing fund; purposes; annual report; definition

A. The military transitional housing fund is established consisting of legislative appropriations and monies allocated from any federal sources, including monies provided by affordable housing legislation and unused or undesignated donations and undesignated federal monies for which military transitional housing is eligible. The director shall administer the fund. Monies in the fund are continuously appropriated. Monies shall be deposited in the fund by order of the governor and shall be spent on newly constructed transitional housing, in cooperation with veteran owned and operated nonprofit organizations and for-profit organizations that serve military members who are transitioning to veteran status. Monies may also be used for supportive services and transitional unit rehabilitation for veterans. Monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

B. Fund monies shall be spent for developing projects and programs to provide transitional housing opportunities for military members separating from the military to be housed in newly constructed housing facilities and rehabilitated housing for veterans. Monies cannot be spent on unoccupied hotels and motels designated for homeless veterans. Fund monies may only be spent for the specific purpose of providing transitional housing for military members who will be separating or who have recently separated from the military or for veterans and may be spent on purchasing and constructing transitional housing facilities for military members who are transitioning into civilian life and rehabilitating housing units for veterans.

C. On or before September 1 of each year, the director shall submit a report on the status of the military transitional housing fund, including a summary of facilities for which funding was provided during the preceding fiscal year, the cost and geographic location of each facility and the number of individuals benefiting from the operation, purchase or construction of the facility, to the president of the senate and the speaker of the house of representatives and provide a copy of the report to the secretary of state.

D. The department may use not more than ten percent of the fund monies annually to administer the fund.

E. For any construction project financed by the department pursuant to this section, the department shall notify a city, town, county or tribal government that a project is planned for its jurisdiction and, before proceeding, shall seek comment from the governing body of the city, town, county or tribal government or an official authorized by the governing body of the city, town, county or tribal government. The department may not interfere with or attempt to override the local jurisdiction's planning, zoning or land use regulations.

F. For the purposes of this section, "undesignated federal monies" means federal stimulus monies and monies originating from federal affordable housing legislation, the United States department of veterans affairs or the United States department of housing and urban development that have not been allocated or approved for a specific purpose or project within three months after the applicable expenditure deadline for the monies. END_STATUTE

Sec. 12. Title 41, chapter 37, article 2, Arizona Revised Statutes, is amended by adding section 41-3956, to read:

START_STATUTE41-3956. Comprehensive performance measurement system; tracking system; wire transfer protocols; reporting requirements; definitions

A. The department shall:

1. establish and implement a comprehensive performance measurement system that requires all of the following:

(a) Annual goals with measurable benchmarks for each housing program in this state.

(b) Mechanisms for data collection and review to assess the effectiveness of the housing programs administered by the department.

(c) Quarterly reporting to the president of the senate and the speaker of the house of REPRESENTATIVES regarding program performance outcomes, suggested improvements for affordable housing, reductions in homelessness and other key metrics.

2. establish secure wire transfer protocols to mitigate fraud risks, including all of the following:

(a) Dual authorization for all wire transfers that exceed $10,000.

(b) WORKing WITHIN THE DEPARTMENT'S AUTHORITY TO IMPLEMENT REal-time fraud detection and reporting measures that are integrated into the financial management system.

3. Engage the board of manufactured housing to review regulatory fees associated with manufactured housing in this state to ensure alignment with regulatory costs. Any fee changes shall be approved by the Board of Manufactured Housing established by section 41-4009. ALL complaints related to manufactured housing must be resolved within the United states Department of Housing and urban development guidelines pursuant to 24 Code of federal regulations part 3288.

4. establish a tracking system that Monitors complaint resolution timelines. The department shall provide quarterly reports regarding any unresolved complaints to the Board of Manufactured Housing, the president of the senate and the speaker of the house of representatives.

5. require ALL STAFF to COMPLETE A CONFLICT OF INTEREST DISCLOSURE FORM ANNUALLY, REVIEW ALL FORMS TO DETERMINE WHETHER THERE ARE ANY SUBSTANTIAL INTEREST DISCLOSURES AND MAINTAIN A SPECIAL FILE OF ALL SUBSTANTIAL INTEREST DISCLOSURES.

B. the department shall report Any instance of fraudulent activity involving state monies to the governor, the Joint Legislative Budget Committee and the Auditor General within ten business days. the department shall initiate Restitution efforts within thirty days after identifying the fraudulent activity.

C. For the purposes of this section:

1. "Comprehensive performance measurement system" means A systematic process for tracking, evaluating and reporting on program outcomes, including establishing goals, performance benchmarks and measurable outcomes.

2. "Wire transfer protocols" means Secure processes and standards to prevent unauthorized financial transfers. END_STATUTE

Sec. 13. Laws 2022, chapter 316, section 4 is amended to read:

Sec. 4. Delayed repeal

Section 36-595.03, Arizona Revised Statutes, as added amended by this act, is repealed from and after December 31, 2026 2027.

Sec. 14. Laws 2023, chapter 141, section 3, as amended by Laws 2024, chapter 217, section 2, is amended to read:

Sec. 3. Homeless shelter and services fund; annual report; delayed repeal; transfer of monies

A. The homeless shelter and services fund is established consisting of legislative appropriations, other monies directed to be deposited in the fund and investment earnings on monies in the fund. The Arizona department of housing shall administer the fund. Monies in the fund are continuously appropriated.

B. The Arizona department of housing shall use monies in the fund for the purposes prescribed in this section. Monies in the fund shall be used to award grants pursuant to title 41, chapter 23, Arizona Revised Statutes, to counties, cities, towns, Indian tribes and nonprofit organizations for programs that provide shelter and services to unsheltered persons who are experiencing homelessness.

C. Monies in the fund are exempt from the provisions of section 35-190, Arizona Revised Statutes, relating to lapsing of appropriations.

D. On or before December 31, 2024 of each fiscal year, the Arizona department of housing shall submit a report to the governor, the president of the senate and the speaker of the house of representatives describing all grants awarded in that year.

E. From and after June 30, 2025 2027, this section is repealed and any unexpended and unencumbered monies remaining in the homeless shelter and services fund established by this section are transferred to the state general fund.

Sec. 15. Quarterly reporting; delayed repeal

A. The Arizona department of housing shall provide quarterly reports to the president of the senate and the speaker of the house of representatives regarding the use of monies from the housing trust fund pursuant to section 41-3955, Arizona Revised Statutes, as amended by this act, that include all of the following:

1. Details on all financial transactions in the housing trust fund.

2. Detailed information on recipients of monies from the housing trust fund and any projected and realized results and analyses of the performance of the housing trust fund in comparison to the goals of the housing trust fund.

B. The Arizona department of housing shall also conduct a review of approved and paid payment requests since July 1, 2021 to identify any improper payments made to grantees and how to recover those monies. The status of the review and recovery activities shall be outlined in the quarterly reports pursuant to subsection A of this section.

C. This section is repealed from and after December 31, 2026.

Sec. 16. Department of economic security; drug testing; TANF cash benefits recipients

During fiscal year 2025-2026, the department of economic security shall screen and test each adult recipient who is otherwise eligible for temporary assistance for needy families cash benefits and who the department has reasonable cause to believe engages in the illegal use of controlled substances. Any recipient who tests positive for the use of a controlled substance that was not prescribed for the recipient by a licensed health care provider is ineligible to receive benefits for a period of one year.

Sec. 17. Purpose

Pursuant to section 41-2955, subsection B, Arizona Revised Statutes, the legislature continues the Arizona department of housing to address the affordable housing issues confronting this state, including housing issues of low and moderate income families, housing affordability, housing for special needs populations and decaying housing stock, to maintain standards of quality and safety for manufactured homes, factory-built buildings, mobile homes and accessory structures and to adjudicate complaints regarding and ensure compliance with the Arizona mobile home parks residential landlord and tenant act.

Sec. 18. Retroactivity

Sections 7 and 8 of this act apply retroactively to from and after July 1, 2025.

Sec. 19. Effective date

Section 41-3955, Arizona Revised Statutes, as amended by this act, is effective from and after December 31, 2025.