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ARIZONA HOUSE OF REPRESENTATIVESFifty-seventh Legislature First Regular Session |
Senate: APPROP DP 9-1-0-0 | 3rd Read 18-12-0-0
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SB 1742: 2025-2026; higher education
Sponsor: Senator Kavanagh (with permission of Committee on Rules), LD 3
Signed by the Governor
Overview
Contains provisions relating to higher education needed to implement the FY 2026 budget.
History
The Arizona Legislature adopts a budget for each fiscal year (FY) that contains general appropriations. Article IV, Section 20, Part 2 of the Constitution of Arizona requires the General Appropriations Act (feed bill) to contain only appropriations for the different state departments, state institutions, public schools and interest on public debt. Statutory changes necessary to reconcile the appropriations made in the feed bill and other changes are drafted into separate budget bills. These bills are prepared according to subject area.
Provisions
Arizona Board of Regents (ABOR) Lease-to-Own and Bond Transactions (Permanent Law)
1. Increases the maximum amount of lease-to-own and bond transactions ABOR may enter into from $800,000,000 to $1,125,000,000. (Sec. 4)
2. Directs ABOR, of the maximum of $1,125,000,000 in lease-to-own and bond agreements, to allocate the $325,000,000 increase as follows:
a) beginning in FY 2026, $162,500,000 to Arizona State University (ASU), Northern Arizona University (NAU) and the University of Arizona (U of A); and
b) beginning in FY 2027, $162,500,000 to ASU, NAU and U of A. (Sec. 4)
3. Instructs ABOR, of the $162,500,000 in lease-to-own and bond transactions to be allocated in each of FYs 2026 and 2027, to allocate at least 25% but not more than 45% to each public university. (Sec. 4)
4. Requires ABOR, beginning on the general effective date, to submit to the Joint Committee on Capital Review (JCCR) the scope, purpose and estimated cost of each new project that will be financed by lease-to-own and bond transactions. (Sec. 4)
5. Prohibits ABOR from distributing monies for a project until JCCR approves the project by a majority vote. (Sec. 4)
6. Instructs JCCR to hear and approve or disapprove a project submitted by ABOR by JCCR's second meeting after the project is submitted to JCCR. (Sec. 4)
7. Defines financed. (Sec. 4)
Spouses of Military Veterans Tuition Scholarship Fund
(Military Scholarship Fund) (Permanent Law) (Retroactive to July 1, 2025)
8. Directs the Treasurer, on notice from ABOR, to invest and divest monies in the Spouses of Military Veterans Tuition Scholarship Fund (Military Scholarship Fund) and credit monies earned from investment to the Military Scholarship Fund. (Sec. 6, 11)
9. Instructs ABOR, by June 30 annually and if there are any unexpended and unencumbered Military Scholarship Fund monies, to deposit the remaining monies as follows:
a) the lesser of $500,000 or the amount of remaining Military Scholarship Fund monies in the Spouses and Dependents of Law Enforcement Officers Tuition Scholarship Fund (LEO Scholarship Fund); and
b) of any monies remaining after the deposit in the LEO Scholarship Fund:
i. 30% in the Arizona Teachers Academy Fund;
ii. 60% in the Arizona Promise Program Fund; and
iii. 10% in the Arizona Community Colleges Program Fund. (Sec. 6, 11)
10. Requires ABOR to distribute Military Scholarship Fund monies as outlined after:
a) tuition scholarships are awarded from the Military Scholarship Fund; and
b) any remaining surplus monies are distributed, as required by existing statute, for tuition waiver scholarships to eligible children or spouses of U.S. Armed Forces members or veterans, peace officers or firefighters who suffered a post-traumatic stress injury in the line of duty and died by suicide. (Sec. 6, 11)
LEO Scholarship Fund (Permanent Law) (Retroactive to July 1, 2025)
11. Codifies the session law LEO Scholarship Fund as the statutory LEO Scholarship Fund. (Sec. 7, 11)
12. Stipulates that to be eligible to receive a tuition scholarship from the LEO Scholarship Fund, an individual must be:
a) an Arizona resident when applying for and receiving a tuition scholarship; and
b) physically present in Arizona for each semester for which the individual receives a tuition scholarship if they are enrolled in a public university. (Sec. 7, 11)
13. Modifies the definition of law enforcement officer, as it relates to the LEO Scholarship Fund, to require that an officer be an Arizona resident who is currently employed in Arizona as a peace or correctional officer. (Sec. 7, 11)
Miscellaneous
14. As permanent law, requires ABOR, by November 1, 2025 and annually thereafter, to submit to the Joint Legislative Budget Committee for review:
a) the amount of monies ABOR retained from each public university to supplement ABOR's operating budget;
b) ABOR's expenditure plan for the current fiscal year for the monies ABOR retained from each public university; and
c) an accounting of how ABOR spent the monies that it retained from the public universities in the preceding fiscal year. (Sec. 1)
15. As permanent law and retroactive to July 1, 2025, directs the Treasurer, on notice from ABOR, to invest and divest Arizona Veterinary Loan Assistance Fund (Veterinary Fund) monies and credit monies earned from investment to the Veterinary Fund. (Sec. 2, 11)
16. As session law for FY 2026, continues to allow each dollar raised by the surcharge on student registration fees assessed pursuant to the Arizona Financial Aid Trust Fund to be matched by less than $2 appropriated by the Legislature. (Sec. 8)
17. As session law for FY 2026, continues to declare science, technology, engineering and mathematics and workforce programs state aid and operating state aid for community college districts are as specified in the General Appropriations Act. (Sec. 9, 10)
18. Makes technical and conforming changes. (Sec. 1, 2, 3, 4, 5, 6)
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22. SB 1742
23. Initials CH Page 0 Signed by the Governor
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