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ARIZONA HOUSE OF REPRESENTATIVESFifty-seventh Legislature First Regular Session |
Senate: APPROP DP 8-2-0-0 | 3rd Read 17-13-0-0 |
SB 1743: 2025-2026; human services
Sponsor: Senator Kavanagh (with permission of committee on Rules), LD 3
Caucus & COW
Overview
Contains provisions relating to human services 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, 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
Extended Foster Care Comprehensive Service Model (EFC Service Model)
1. Codifies the EFC Service Model as permanent law. (Sec. 1)
2. Directs the Arizona Department of Child Safety (DCS) to prepare a scope of work for an EFC Service Model that includes supportive services and required case management provided by contracted community providers for young adults who participate in the EFC program within 10 days after the effective date of this legislation. (Sec. 1)
3. Requires the scope of work for the EFC Service Model to include:
a) weekly engagement with each young adult;
b) life skills training;
c) mental and physical health and well-being;
d) relational permanency;
e) education and enrollment assistance;
f) assistance with accessing safe housing attainment and stability for young adults;
g) career and employment planning and readiness;
h) assistance with accessing transportation services for young adults; and
i) flexible funding to support the unique needs of the young adult, including educational services and job training or workforce development. (Sec. 1)
4. Specifies that the EFC Service Model must include an extended foster care success coaching program for young adults in the EFC program. (Sec. 1)
5. Limits the caseload for EFC success coaches to no more than 20 young adults. (Sec. 1)
Extended Foster Care Success Coaching Program (EFC Success Coaching Program)
6. Requires the EFC Success Coaching Program to be based on a practice that is youth driven to:
a) promote permanent connections;
b) support the development of an educational foundation and skill set that enables young adults to gain and maintain employment to support their financial needs;
c) assist young adults to reside in safe, stable and secure housing;
d) link young adults to appropriate services that address physical and behavioral health needs;
e) build skills for developing personal agency; and
f) ensure that young adults have the cognitive and social-emotional competencies essential to survival. (Sec. 1)
7. Requires the EFC Success Coaching Program to:
a) operate from an evidence-based framework;
b) ensure that the young adults served are aware of their rights to normalcy;
c) assist young adults to advocate with caregivers to experience activities and opportunities that meet individual interests;
d) 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;
e) develop feedback that allows young adults to communicate their needs and satisfaction with provided services; and
f) deliver interventions that are tailored to each young adult's strengths and experiences. (Sec. 1)
8. Directs each EFC success coach to:
a) successfully complete a DCS-administered foster care success coach training program;
b) possess a bachelor's or associate's degree or have equivalent credits equal to an associate's degree;
c) have experience working with youth or young adults; and
d) exhibit the belief that all young adults have the capacity to be successful in life. (Sec. 1)
9. Permits an EFC success coach to possess skills acquired through alternative routes such as relevant job training, community college attendance, military service or an apprenticeship in lieu of a degree or credits. (Sec. 1)
10. Requires DCS to supervise and monitor the success of the EFC Success Coaching Program. (Sec. 1)
11. Directs DCS to solicit agencies to administer the EFC Service Model within 30 days and select an agency within 90 days after the effective date of this legislation. (Sec. 1)
12. Requires DCS to implement the EFC Service Model within 150 days after the effective date of this legislation. (Sec. 1)
13.
Repeals the Extended Foster Care
Comprehensive Service Model Fund on July 1, 2025, and directs any unexpended
and unencumbered monies remaining in the fund to be deposited into the state
General Fund (state GF). (Sec. 1)
Extended Foster Care Quality Review Committee (EFC Review Committee)
14. Directs DCS to establish an EFC Review Committee within DCS consisting of DCS staff members. (Sec. 1)
15. Tasks the EFC Review Committee with confirming that a young adult who participates in extended foster care:
a) meets the eligibility criteria;
b) has connections to supportive adults who are actively involved in the young adult's life;
c) has a person-centered case and transition plan that supports the young adult's identified goals and future planning; and
d) is acquiring individualized skills to develop the tools that are needed to thrive outside of the EFC program. (Sec. 1)
16. Instructs DCS, annually on November 1, to submit a report on the EFC Service Model to the Joint Legislative Budget Committee (JLBC), the Senate Health and Human Services Committee and the House of Representatives Health and Human Services Committee or its successor committees. (Sec. 1)
17. Requires the EFC report to include data and statistics on:
a) the support and services to be offered by the EFC Service Model;
b) EFC's program's eligibility requirements;
c) the young adult's program responsibilities;
d) case and transition planning opportunities;
e) health insurance coverage for young adults in the EFC program;
f) educational opportunities for young adults in the EFC program;
g) opportunities for mentors through the EFC program;
h) transportation services for young adults in the EFC program, including obtaining a driver-license; and
i) housing, including semi-supervised living arrangements if such arrangements best meet the young adult's needs. (Sec. 1)
18. Requires DCS to provide to JLBC a quarterly report that includes:
a) the number of young adults served in the EFC Service Model;
b) the young adult's participation in regular reviews with EFC staff; and
c) other performance measures as updated by the EFC Review Committee and as determined by the chairperson of JLBC. (Sec. 1)
19. Makes the EFC Model Fund a permanent fund that consists of legislative appropriations, to be administered by DCS for the purposes of implementing the EFC Service Model and the EFC Success Coaching Program. (Sec. 1)
20. Specifies that the EFC Model Fund monies are continuously appropriated and exempt from lapsing. (Sec. 1)
21. Defines Department and young adult. (Sec. 1)
Developmental Disabilities Group Home Monitoring Program
22. Continues the Developmental Disabilities Group Home Monitoring Pilot Program (Program) past the three-year pilot period until January 1, 2031. (Sec. 3)
23. Requires, subject to available appropriations, the Arizona Department of Economic Security
(DES) to contract with the designated entity to operate the protection and advocacy system for persons with developmental disabilities. (Sec. 3)
24. Directs, beginning January 1, 2026, the designated entity to monitor group homes that provide services to clients with complex needs to determine whether a client has a behavior treatment plan in place that is compliant with DES 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. (Sec. 3)
25. Requires, beginning January 1, 2026, the designated entity to complete follow-up monitoring reviews for group homes that were monitored and identified as having significant compliance or quality of care concerns. (Sec. 3)
26. Requires, beginning January 1, 2026, the designated entity to utilize a monitoring tool to assess whether the following criteria were satisfied:
a) the client received the required physical and behavioral health services as outlined by the client's health care providers and person-centered service plan, including regular physical activity with modification, if any;
b) the client's dietary requirements have been met, including compliance with 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 dietary guidelines of the U.S. Department of Agriculture;
d) the guardian of the client with complex needs and the client, if applicable, were included in all decision-making regarding the client and were 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 as outlined in the client's person-centered service plan and behavior treatment plan, if applicable;
f) the client had access to and used all prescribed adaptive equipment;
g) group home direct care staff worked with the behavioral health providers serving the client, 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; and
h) the group home is compliant with applicable incident reporting policies, including documenting and reporting physical interventions and any other emergency measures taken. (Sec. 3)
27. Directs the designated entity to compile and complete:
a) monthly reports to DES detailing monitoring results from the previous month, including identified systemic issues and recommendations for improvements; and
b) a comprehensive annual report of all observations and outcomes during the preceding year. (Sec. 3)
28. Directs DES to establish an expedited referral system to ensure copies of all incident reports, quality of care complaints, investigation records and client service requests for each group home monitored are forwarded to the designated entity for review and analysis, by January 1, 2026. (Sec. 3)
29. Repeals the requirement that the designated entity determine whether all physical interventions used by a group home's staff have complied with each client's behavioral treatment plan and applicable state laws. (Sec. 3)
30. Replaces the requirement that the designated entity provide substantiated allegations in a quality-of-care complaint to DES with a requirement that it provides any concerns identified during a group home follow-up review. (Sec. 3)
31. Directs DES to provide the designated entity with:
a) access to all information necessary to verify service compliance; and
b) 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 identified systemic issues and recommendations received from the designated entity. (Sec. 3)
32. Tasks DES to post on its website the following:
a) all the designated entity's monthly and annual reports;
b) all quarterly reports from DES; and
c) the monitoring tool and related instructions used by the designated entity to monitor group homes. (Sec. 3)
33. Directs the designated entity, annually on January 15, to report observation and outcomes of the Program to the Governor, President of the Senate, Speaker of the House of Representatives and provide a copy to the Secretary of State and the DDD Independent Oversight Committee. (Sec. 3)
34. Instructs, by January 1, 2030, the Health and Human Services Committees of the Senate and the House of Representatives to:
a) review all reports submitted to DES, as well as the DES responses, including observations and outcomes of the program, systemic issues identified, quality of services and any recommendations for DES; and
b) determine whether the Program should be continued, modified or discontinued. (Sec. 3)
35. Extends the Program from December 21, 2026, to December 31, 2030. (Sec. 13)
Veterans' Donations Fund (VDF)
36. Requires the Arizona Department of Veterans' Services (ADVS) to annually transfer 15% of all revenues received and deposited in the Veterans' Donation Fund (VDF) to the subaccount in the State Homes for Veterans Trust Fund (SHVF Subaccount). (Sec. 4)
37. Tasks the ADVS Director to establish the SHVF Subaccount for the purposes of:
a) supporting the various needs of veterans residing at nursing and domiciliary homes;
b) purchasing any necessary equipment for the nursing and domiciliary homes; or
c) making any necessary improvements or completing ongoing maintenance for the nursing and domiciliary homes. (Sec. 5)
38. Expands eligibility for scholarship award monies from the VDF to include spouses of all U.S. Army members who are in good standing and are serving in regular active duty, active-duty reserve or active-duty national guard, rather than spouses of only those members who are enlisted. (Sec. 4)
39. Allows the ADVS to use up to $150,000 from the VDF each fiscal year to administer the VDF. (Sec. 4)
40. Provides two full-time equivalent positions to ADVS to administer the VDF. (Sec. 4)
41. Directs the State Treasurer, on notice from the Director of ADVS, to invest and divest monies in the SHVF Subaccount, in addition to monies in the SHVF, and that monies earned from investment be credited to the SHVF and SHVF Subaccount. (Sec. 5)
Out-of-School Time Grant Program (Grant Program)
42. Creates the Grant Program within DES to expand out-of-school time childcare for children who are between 5 and 12 years old and who require childcare when the children are out-of-school or when school instruction is not being conducted. (Sec. 6)
43. Requires the Grant Program to:
a) increase the number of eligible pupils with access to childcare before school, after school or when school instruction is not being conducted;
b) increase access to and the affordability of childcare for children and their families;
c) enable employers to attract and retain a talented workforce; and
d) reduce the cost of childcare to participating families by at least two-thirds. (Sec. 6)
44. Directs DES to:
a) develop an annual grant application process;
b) provide grants to assist with the costs of childcare for eligible grantees participating in the Grant Program;
c) monitor eligible grantees to ensure Grant Program and fiscal compliance;
d) develop metrics to measure the success of the Grant Program; and
e) allocate at least 30% of grant monies for eligible grantees in rural communities. (Sec. 6)
45. Specifies that monies in the Grant Program Fund are continuously appropriated and exempt from lapsing. (Sec. 6)
46. Specifies that the Grant Program Fund consists of legislative appropriations. (Sec. 6)
47. Prohibits DES from using over 5% of the monies deposited in the Grant Program Fund to administer the Grant Program Fund. (Sec. 6)
48. Directs DES to submit a report by August 1, 2026, and each year thereafter, to the Governor, President of the Senate and the Speaker of the House of Representatives and to provide a copy to the Secretary of State, which includes the:
a) total number of children who are served by the Grant Program, as categorized by age and county where the child is served;
b) locations of programs, as categorized by county; and
c) number of new and sustained childcare slots. (Sec. 6)
49. Permits DES to develop policies and procedures that are necessary to implement requirements relating to the Grant Program and Grant Program Fund. (Sec. 6)
50. Prohibits the report relating to the Grant Program from including any information that identifies or that can be used to identify a child. (Sec. 6)
51. Defines eligible grantee and eligible pupils. (Sec. 6)
Arizona Department of Housing (ADOH) Continuation
52. Continues, retroactive to July 1, 2025, ADOH until July 1, 2027. (Sec. 7, 18)
53. Contains a purpose statement. (Sec. 17)
54. Repeals ADOH on January 1, 2028. (Sec. 8)
ADOH Powers and Duties
55. Adds that the annual report that ADOH submits to the Governor and Legislature must contain outcome-based metrics for ADOH funded projects and initiatives, including:
a) the number of affordable housing units developed in Arizona;
b) the number of individuals housed in permanent supportive housing environments in the past year and related housing outcomes for individuals exiting ADOH funded permanent supportive housing; and
c) any improvements in housing accessibility for underserved and rural populations in Arizona. (Sec. 9)
56. Directs ADOH, as a condition of funding for emergency shelter and transitional housing programs that receive grants or other funding from ADOH, to adopt policies and procedures for responding to the alleged sale, manufacture or possession of dangerous and narcotic drugs, including for signage that identifies a facility as a drug-free zone. (Sec. 9)
Housing Trust Fund (HTF)
57. Requires, beginning January 1, 2026, HTF monies to be awarded by priority for the first four months of each fiscal year in the following order:
a) constructing or renovating emergency shelter facilities, or for operational expenses for emergency shelter services;
b) constructing or renovating transitional housing units; and
c) constructing or renovating other types of shelter or housing as determined by ADOH to best serve the needs of individuals who are seriously mentally ill and chronically resistant to treatment. (Sec. 10, 19)
58. Permits remaining HTF monies that have not been awarded or encumbered by priority, as outlined, to be spent based on stakeholder feedback. (Sec. 10)
59. Directs ADOH to submit all programs established by ADOH and funded by the HTF to the Joint Legislative Budget Committee (JLBC) for review. (Sec. 10)
60. Requires ADOH to provide quarterly reports to the President of the Senate and the Speaker of the House of Representatives regarding the use of HTF monies, including:
a) details on all financial transactions in the HTF;
b) detailed information on recipients of monies from the HTF; and
c) any projected and realized results and analyses regarding the performance of the HTF in comparison with HTF goals. (Sec. 15)
61. Directs ADOH to 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. (Sec. 15)
62. Specifies that the status of the review and recover activities must be outlined in the quarterly reports regarding the use of HTF monies. (Sec. 15)
63. Repeals the HTF quarterly reports and review requirements on January 1, 2027. (Sec. 15)
ADOH Comprehensive Performance Measurement System, Complaint Tracking System and Wire Transfer Protocols
64. Directs ADOH to establish and implement a comprehensive performance measurement system that includes:
a) annual goals with measurable benchmarks for each housing program in Arizona;
b) mechanisms for data collection and review to assess the effectiveness of the housing programs administered by ADOH; and
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. (Sec. 12)
65. Requires ADOH to establish secure wire transfer protocols to mitigate fraud risks, including:
a) dual authorization for all wire transfers exceeding $10,000;
b) working within ADOH's authority to implement real-time fraud detection and reporting measures that are integrated into the financial management system; and
c) mandatory reconciliation and auditing of all wire transfers monthly. (Sec. 12)
66. Requires ADOH to engage the Board of Manufactured Housing to review regulatory fees associated with manufactured housing in Arizona to ensure that the fees are aligned with regulatory costs. (Sec. 12)
67. Stipulates that any regulatory fee changes must be approved by the Board of Manufactured Housing and all complaints relating to manufactured housing must be resolved within the U.S. Department of Housing and Urban Development Guidelines in accordance with the federal Manufactured Home Dispute Resolution Program. (Sec. 12)
68. Tasks ADOH with:
a) establishing a complaint resolution tracking system that monitors complaint resolution timelines;
b) providing 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;
c) requiring all ADOH staff to complete a conflict-of-interest disclosure form each year, review each completed form to determine if there are any substantial interest disclosures and maintain a special file containing all substantial interest disclosures;
d) reporting any instance of fraudulent activity involving state monies to the Governor, JLBC and the Auditor General within 10 business days; and
e) initiate restitution efforts within 30 days after identifying fraudulent activity involving state monies. (Sec. 12)
Military Transitional Housing Fund
69. Includes legislative appropriations to the monies which comprise the Military Transitional Housing Fund. (Sec. 11)
70. Permits monies in the Military Transitional Housing Fund to be used for supportive services and transitional unit rehabilitation for veterans. (Sec. 11)
Homeless Shelter and Services Fund
71. Extends the Homeless Shelter and Services Fund from July 1, 2025, to July 1, 2027. (Sec. 14)
72. Requires the report relating to all grants awarded from the Homeless Shelter and Services Fund to be submitted annually on December 31 of each FY by ADOH, as prescribed. (Sec. 14)
Temporary Assistance for Needy Families (TANF)
73. Continues, as session law, DES to screen and test each adult recipient who is eligible for TANF cash benefits and who DES has reasonable cause to believe engages in the illegal use of controlled substances. (Sec. 16)
74. Deems, as session law, a TANF recipient who tests positive for the use of a controlled substance that was not prescribed for the recipient by a licensed health care provider ineligible for TANF benefits for one year. (Sec. 16)
Miscellaneous
75. Defines terms. (Sec. 1, 3, 6, 9, 12)
76. Makes technical and conforming changes. (Sec. 2-5, 9-10)
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80. SB 1743
81. Initials AG Page 0 Caucus & COW
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