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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
AMENDED
2025-2026; human services
Purpose
Makes statutory and session law changes relating to human services necessary to implement the FY 2026 state budget.
Background
The Arizona Constitution prohibits substantive law from being included in the general appropriations, capital outlay appropriations and supplemental appropriations bills. However, it is often necessary to make statutory and session law changes to effectuate the budget. Thus, separate bills called budget reconciliation bills (BRBs) are introduced to enact these provisions. Because BRBs contain substantive law changes, the Arizona Constitution provides that they become effective on the general effective date, unless an emergency clause is enacted.
S.B. 1743 contains the budget reconciliation provisions for changes relating to human services.
Provisions
Extended Foster Care Comprehensive Service Model
1. Requires the Department of Child Safety (DCS), within 10 days after the general effective date, to prepare a scope of work for an Extended Foster Care Comprehensive Service Model (Model) that includes supportive services and case management provided by contracted community providers for young adults who participate in the extended foster care program.
2. Requires the Model's scope of work 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.
3. Requires the Model to include an extended foster care success coaching program for young adults in the extended foster care program.
4. Prohibits each extended foster care success coach from having a caseload of more than 20 young adults.
5. Requires the extended foster care success coaching program to:
a) be based on a practice that is youth driven;
b) promote permanent connections;
c) support the development of an educational foundation and skill set that enables young adults to gain and maintain employment to support their financial needs;
d) assist young adults to reside in safe, stable and secure housing;
e) link young adults to appropriate services that address physical and behavioral health needs;
f) build skills for developing personal agency;
g) ensure that young adults have the cognitive and social-emotional competencies essential to survival;
h) operate from an evidence-based framework;
i) ensure that the young adults served are aware of their rights to normalcy;
j) assist young adults to advocate with caregivers to experience activities and opportunities that meet individual interests;
k) 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;
l) develop feedback that allows young adults to communicate their needs and satisfaction with provided services; and
m) deliver interventions that are tailored to each young adult's strengths and experiences.
6. Requires DCS to supervise and monitor the success of the extended foster care success coaching program.
7. Requires each extended foster care 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) exhibit the belief that all young adults have the capacity to be successful in life; and
d) have experience working with youth or young adults.
8. Allows, in lieu of a degree or credits, an extended foster care success coach to possess skills acquired through alternative routes such as relevant job training, community college attendance, military service or an apprenticeship.
9. Requires DCS to:
a) solicit agencies to administer the Model within 30 days after the general effective date and select an agency within 90 days after the general effective date; and
b) implement the Model within 150 days after the general effective date.
10. Requires DCS to establish an Extended Foster Care Quality Review Committee (Review Committee) within DCS consisting of DCS staff members.
11. Requires the Review Committee to confirm that a young adult who participates in extended foster care:
a) meets 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 extended foster care program.
12. Requires DCS, by November 1 of each year, to submit a report on the developed 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.
13. Requires the report to include data and statistics on:
a) the support and services to be offered by the Model;
b) the extended foster care 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 extended foster care program;
f) educational opportunities for young adults in the extended foster care program;
g) opportunities for mentors through the extended foster care program;
h) transportation services for young adults in the extended foster care program, including obtaining a driver license; and
i) housing, including semi-supervised living arrangements if such arrangements best meet the young adult's needs.
14. Requires DCS to provide to JLBC a quarterly report that includes:
a) the number of young adults served in the Model;
b) the young adult's participation in regular reviews with extended foster care staff; and
c) other performance measures as updated by the Review Committee and as determined by the chairperson of JLBC.
15. Establishes the Extended Foster Care Comprehensive Service Model Fund (Fund), consisting of legislative appropriations, to be administered by DCS for purposes of implementing the Model and the extended foster care success coaching program.
16. Specifies that the Fund monies are continuously appropriated and exempt from lapsing.
17. Defines young adult as a person who is between the ages of 17.5 and 20 years old who participates or will participate in the extended foster care program.
Developmental Disabilities Group Home Monitoring Program
18. Extends the Developmental Disabilities Group Home Monitoring Program past the three-year pilot period until January 1, 2028.
19. Specifies that the requirement that the Arizona Department of Economic Security (DES) contract with the entity designated by the State to operate the protection and advocacy system for persons with developmental disabilities, is subject to available appropriations.
20. Requires, 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 impacting the client's ability to live safely in the community, as well as to use a monitoring tool to assess whether:
a) the client received the 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 for the client's physical disability, 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 client and the client's guardian, 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 complied with applicable incident reporting policies, including documenting and reporting physical interventions and any other emergency measures taken.
21. Requires, beginning January 1, 2026, the designated entity to:
a) complete follow-up monitoring reviews for group homes that were monitored and identified as having significant quality of care concerns; and
b) compile and complete monthly reports to DES detailing monitoring results from the preceding month, including identified systemic issues and recommendations for improvements, and a comprehensive annual report of all observations and outcomes during the preceding year.
22. Removes 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.
23. Requires DES, by January 1, 2026, 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 monitored are forwarded to the designated entity for review and analysis.
24. Replaces the requirement that the designated entity provide substantiated allegations in a quality-of-care complaint to DES with the requirement that it provide any concerns identified during a group home follow-up review.
25. Removes the requirement that DES identify quality of care complaints related to abuse, neglect and client safety as priorities for investigation.
26. Requires DES to provide the designated entity with:
a) access to all information necessary to monitor group home service compliance; and
b) quarterly written reports that respond to the issues identified in the designated entity's monthly reports from the previous quarter, including identifying the actions taken to respond to identified systemic issues and recommendations received from the designated entity.
27. Requires DES to post all of the following on its website:
a) all of 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.
28. Requires the designated entity to submit the report regarding the observations and outcomes of the Program by January 15, 2026, and each January 15 annually thereafter, rather than by December 31, 2025.
29. Adds the Independent Oversight Committee on Persons with Developmental Disabilities to the list of persons to which the designated entity must provide a copy of the report on observations and outcomes.
30. Requires, 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 provided and any recommendations for service improvements and actions taken by DES; and
b) determine whether the Program should be continued, modified or discontinued.
Veterans' Donations Fund
31. Requires the Director of the Arizona Department of Veterans' Services (ADVS) to establish a separate subaccount in the State Homes for Veterans Trust Fund (SHVF Subaccount) for 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.
32. Requires ADVS to annually transfer 15 percent of all revenues received and deposited in the Veterans' Donation Fund (VDF) to the SHVF Subaccount.
33. Requires 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, respectively.
34. 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.
35. Allows ADVS to use up to $150,000 from the VDF each fiscal year to administer the VDF.
36. Allocates two full-time equivalent positions to ADVS to administer the VDF.
Out-of-School Time Grant Program
37. Establishes
the Out-of-School Time Grant Program (Grant Program) in DES to expand
out-of-school time child care for children who are between 5 and 12 years old
and who require child care when the children are out-of-school or when school
instruction is not being conducted.
38. Requires the Grant Program to:
a) increase the number of eligible pupils with access to child care before school, after school or when school instruction is not being conducted;
b) increase access to and the affordability of child care for children and their families;
c) enable employers to attract and retain a talented workforce; and
d) reduce the cost of child care to participating families by at least two-thirds.
39. Requires DES to:
a) develop an annual grant application process;
b) provide grants to assist with the costs of child care 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 percent of grant monies for eligible grantees in rural communities.
40. Stipulates that the grant monies allocated for rural communities may be used in any location in Arizona, if there are insufficient grant applications from rural communities.
41. Establishes the Out-of-School Time Grant Program Fund (Grant Program Fund) consisting of legislative appropriations.
42. Prohibits DES from using over five percent of the monies deposited in the Grant Program Fund to administer the Grant Program Fund.
43. Specifies that monies in the Grant Program Fund are continuously appropriated and exempt from lapsing.
44. Requires 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 child care slots.
45. Prohibits the report relating to the Grant Program from including any information that identifies or that can be used to identify a child.
46. Allows DES to develop policies and procedures that are necessary to implement requirements relating to the Grant Program and Grant Program Fund.
47. Defines eligible grantee as a nonprofit organization, public school and public or private child care provider that has demonstrated experience in providing child care before school, after school or when school instruction is not being conducted.
48. Defines eligible pupils as children who are between 5 and 12 years old and who come from a household earning $150,000 or less per year.
Arizona Department of Housing (ADOH) Continuation
49. Continues, retroactive to July 1, 2025, ADOH until July 1, 2027.
50. Repeals ADOH on January 1, 2028.
ADOH Powers and Duties
51. Requires the annual report that ADOH must submit to the Governor and the Legislature each year to 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.
52. Requires 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.
53. Defines permanent supportive housing as long-term housing assistance paired with supportive services that are aimed at individuals experiencing homelessness or individuals with special needs.
Housing Trust Fund (HTF)
54. 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.
55. Allows remaining HTF monies that have not been awarded or encumbered by priority, as outlined, to be spent based on stakeholder feedback.
56. Requires ADOH to submit all programs established by ADOH and funded by the HTF to the Joint Legislative Budget Committee (JLBC) for review.
57. 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.
58. 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.
59. Specifies that the status of the review and recover activities must be outlined in the quarterly reports regarding the use of HTF monies.
60. Repeals the HTF quarterly reports and review requirements on January 1, 2027.
ADOH Comprehensive Performance Measurement System,
Complaint Tracking System and Wire Transfer Protocols
61. Requires 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.
62. Instructs 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 on a monthly basis.
64. Specifies 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.
65. Requires ADOH to:
a) establish a complaint resolution tracking system that monitors complaint resolution timelines;
b) 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;
c) require 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) report 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.
Military Transitional Housing Fund
66. Adds legislative appropriations to the monies which comprise the Military Transitional Housing Fund.
67. Allows monies in the Military Transitional Housing Fund to be used for supportive services and transitional unit rehabilitation for veterans.
Homeless Shelter and Services Fund
68. Extends the Homeless Shelter and Services Fund from July 1, 2025, to July 1, 2027.
69. Requires the report relating to all grants awarded from the Homeless Shelter and Services Fund to be submitted by December 31 of each fiscal year by Arizona Department of Housing, as prescribed.
Temporary Assistance for Needy Families (TANF)
70. Continues to require DES in FY 2026 to screen and test each adult recipient who:
a) is eligible for TANF cash benefits; and
b) DES has reasonable cause to believe engages in the illegal use of controlled substances.
71. Continues to render any 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 as ineligible to receive TANF benefits for a period of one year.
Miscellaneous
72. Defines terms.
73. Contains a purpose statement.
74. Makes technical and conforming changes.
75. Becomes effective on the general effective date, with retroactive provisions as noted.
Amendments Adopted by Committee of the Whole
1. Continues ADOH until July 1, 2027, retroactive to July 1, 2025.
2. Modifies the list of information that ADOH must include in the ADOH's annual report to the Governor and the Legislature to include specified outcome-based metrics for ADOH-funded projects and initiatives.
3. Requires ADOH, as a condition of funding for ADOH funded emergency shelter and transitional housing programs, to adopt policies and procedures for responding to the alleged sale, manufacture or possession of dangerous or narcotic drugs.
4. Requires HTF monies to awarded by priority, as outlined, during the first four months of each fiscal year, beginning January 1, 2026.
5. Specifies
that remaining HTF monies that have not been awarded by priority, after the
four-month period, may be spent based on stakeholder feedback.
6. Requires ADOH to establish:
a) a comprehensive performance measurement system;
b) secure wire transfer protocols to mitigate fraud risks; and
c) a complaint resolution tracking system.
7. Directs ADOH to require staff to complete a conflict of interest form each year and to review each completed form to determine if any substantial interest disclosures exist, as outlined.
8. Directs 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.
9. Requires any regulatory fee changes to be approved by the Board of Manufactured Housing and all complaints relating to manufactured housing to be resolved within the U.S. Department of Housing and Urban Development Guidelines.
10. Outlines review and reporting requirements, including quarterly reporting to the President of Senate and Speaker of the House of Representatives regarding the use of monies in the HTF.
11. Makes technical and conforming changes.
Amendments Adopted by the House of Representatives
· Accelerates, from January 1, 2031, to January 1, 2028, the extended repeal date for the Developmental Disabilities Group Home Monitoring Program.
Senate Action House Action
APPROP 6/17/25 DP 8-2-0 RULES 6/26/25 DP/C&P 8-0-0-0
3rd Read 6/19/25 17-13-0 3rd Read 6/26/25 42-14-4
Prepared by Senate Research
June 27, 2025
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