HB2728 - 572R

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

Section 1. Section 23-634.01, Arizona Revised Statutes, is amended to read:

START_STATUTE23-634.01. Denial of benefits for failure to accept suitable work or actively seek work; definition

A. Notwithstanding section 23-776, an individual who is found by the department, with respect to any week in an eligibility period which that begins from and after April 4, 1981, to have failed to apply for or accept available suitable work to which he the individual was referred by the department or to have failed to actively engage in seeking work is disqualified from receiving extended benefits. The disqualification shall begin with the week in which the failure occurred and continue until the individual has been employed in each of four subsequent weeks, whether or not consecutive, and has earned remuneration equal to not less than at least four times his the individual's weekly benefit amount.

B. An individual shall not be denied extended benefits for failure to accept an offer of or apply for available suitable work as defined in subsection G of this section, if:

1. The position was not offered to the individual in writing or was not listed with the department.

2. The failure would not result in a denial of benefits under section 23-776 to the extent that the criteria of suitability in section 23-776 are not inconsistent with this section.

C. If an individual furnishes evidence satisfactory to the department that prospects for obtaining work in his the individual's customary occupation within a reasonably short period are good, the determination of whether any work is suitable with respect to the individual shall be made in accordance with the provisions of section 23-776 without reference to the definition contained in this section.

D. Work shall not be considered suitable work under this section if it would not be considered suitable under section 23-776, subsection C E.

E. For the purposes of this section, an individual shall be treated as actively engaged in seeking work during any week if the department finds from tangible evidence provided by the individual that he the individual has engaged in a systematic and sustained effort to obtain work during such week.

F. The department shall refer an individual entitled to extended benefits under this chapter to any work which that is suitable work.

G. For the purposes of this section, "suitable work" with respect to any individual means work within the individual's capabilities in which:

1. The gross average weekly wages payable for the work exceed the sum of the individual's weekly benefit amount plus the amount of any supplemental unemployment benefits payable to the individual for such week.

2. The wages for the work are at least equal to the higher of:

(a) The minimum wages provided by section 6(a)(1) of the fair labor standards act of 1938, without regard to any exemption.

(b) The state or local minimum wage. END_STATUTE

Sec. 2. Section 23-762, Arizona Revised Statutes, is amended to read:

START_STATUTE23-762. Requirements of shared work plan; approval

A. An employer wishing that wishes to participate in the shared work unemployment compensation program shall submit a signed, written shared work plan to the department for approval. The department shall approve a shared work plan only if the plan:

1. Specifies the employees in the affected group.

2. Applies to only one affected group.

3. If feasible, includes a description of the employer's plan for notifying an employee whose work week workweek is to be reduced.

4. Includes a certified statement by the employer that, for the six-month period immediately preceding the date the plan is submitted, compensation was payable from the shared work employer, or its predecessors whether or not they were shared work employers, to each employee in the affected group in an amount equal to or greater than the wages for insured work in one calendar quarter as provided in section 23-771, subsection A, paragraph 6 7. An employee who joins an affected group after the approval of the shared work plan is automatically covered under the previously approved plan, effective the week that the department receives written notice from the shared work employer that the employee has joined and certification from the employer that the employee meets the provisions of section 23-771, subsection A, paragraph 6 7.

5. Includes a certified statement by the employer that for the duration of the plan the reduction in the total normal weekly hours of work of the employees in the affected group is instead of layoffs which that otherwise would result in at least as large a reduction in the total normal weekly hours of work. The employer shall include an estimate of the number of layoffs that would have occurred without an approved shared work plan.

6. Specifies the manner in which the employer will treat fringe benefits of the employees in the affected group if the employees' hours are reduced to less than their normal weekly hours of work. The employer must certify, if the employer provides health benefits and retirement benefits under a defined benefit plan to any employee whose workweek is reduced under the plan, that these benefits will continue to be provided to an employee participating in the shared work plan under the same terms and conditions as though the workweek of the employee had not been reduced or to the same extent as other employees not participating in the shared work program.

7. Specifies an expiration date that is no not more than one year from after the date the employer submits the plan for approval, except that on written request by the employer, the department may approve an extension of the plan for a period of not more than one year from after the date of the request.

8. Is approved in writing by the collective bargaining agent for each collective bargaining agreement that covers any employee in the affected group.

B. The plan prescribed in subsection A of this section and the implementation of the plan must be consistent with the employer's obligations under all other federal and state laws.

C. The department shall approve or disapprove the plan within fifteen days after receipt of the plan by the department. The department shall notify the employer of the reasons for denial of a shared work plan within ten days of after the determination. END_STATUTE

Sec. 3. Section 23-763, Arizona Revised Statutes, is amended to read:

START_STATUTE23-763. Shared work benefits; eligibility; requirements

A. An individual is eligible to receive shared work benefits with respect to any week only if, in addition to meeting the requirements of article 6 of this chapter as modified by subsection E of this section, the department finds that during the week:

1. The individual is employed as a member of an affected group in an approved plan that was approved before the week and is in effect for the week.

2. The individual's normal weekly hours of work were reduced at least ten per cent percent but not more than forty per cent percent.

3. The individual met the requirements of section 23-771, subsection A, paragraphs 3, and 4 and 5.

B. Eligible individuals may participate in training to enhance job skills, including employer sponsored employer-sponsored training or worker training funded under the workforce investment act of 1998, if the training is approved by the department.

C. The department shall not pay an individual shared work benefits for more than twenty-six weeks in a benefit year, except that this limitation does not apply to a week if for the period consisting of the week and the immediately preceding twelve weeks the rate, not seasonally adjusted, of insured unemployment in this state is equal to or greater than four per cent percent.

D. The total amount of regular benefits and shared work benefits that the department pays to an individual for weeks in the individual's benefit year shall not exceed the total for the benefit year as provided in section 23-780.

E. Notwithstanding section 23-621 or any other provision of this chapter, for purposes of this article an individual is unemployed in any week for which compensation is payable to the individual, as an employee in an affected group, for less than the individual's normal weekly hours of work in accordance with an approved plan in effect for the week. END_STATUTE

Sec. 4. Section 23-771, Arizona Revised Statutes, is amended to read:

START_STATUTE23-771. Eligibility for benefits

A. An unemployed individual is eligible to receive benefits with respect to any week only if the department finds that the individual:

1. Has registered for work at and thereafter has continued to report at an employment office in accordance with the regulations prescribed by the department.

2. Has made a claim for benefits in accordance with section 23-772.

3. Is able to work.

4. Is available for work.

4. 5. Except for an individual who is applying for shared work benefits pursuant to article 5.1 of this chapter, is available for work and both of the following apply:

(a) The individual has engaged in a systematic and sustained effort to obtain work during at least four days of the week.

(b) The individual has made at least one job contact per day on four different days of the week. actively seeks and applies for suitable work and:

(a) conducts at least five work search actions each week in order to qualify as actively seeking and applying for suitable work. The actions shall include any of the following:

(i) Submitting resumes to employers.

(ii) Completing job applications and submitting the APPLICATIONS to employers.

(iii) Attending job fairs that are recognized by the department and the individual's attendance is verifiable by the department.

(iv) Attending interviews with potential employers.

(v) Attending a department-approved training program that includes a resume writing session, which shall count as one work search action for the week the individual attended the training program.

(b) If the individual is applying for a weekly benefit, provides a weekly report to the department that details the individual's work search actions for every week a benefit is sought.

5. 6. Has been unemployed for a waiting period of one week. A week is not counted as a week of unemployment for the purpose of this paragraph:

(a) Unless it occurs within the benefit year that includes the week with respect to which the individual claims payment of benefits.

(b) Unless the individual was eligible for benefits with respect to the week as provided in this section and sections 23-775, 23-776 and 23-777.

6. 7. Has met one of the following requirements:

(a) Has been paid wages for insured work during the individual's base period equal to at least one and one-half times the wages paid to the individual in the calendar quarter of the individual's base period in which the wages were highest, and the individual has been paid wages for insured work in one calendar quarter of the individual's base period equal to an amount that is equal to at least three hundred ninety times the minimum wage prescribed by section 23-363 that is in effect when the individual files a claim for benefits.

(b) For a benefit year beginning on or after September 2, 1984, has been paid wages for insured work during at least two quarters of the individual's base period and the amount of the wages paid in one quarter would be sufficient to qualify the individual for the maximum weekly benefit amount payable under this chapter and the total of the individual's base-period wages is equal to or greater than the taxable limit as specified in section 23-622, subsection B, paragraphs 1 and 2.

7. 8. Following the beginning date of a benefit year established under this chapter or the unemployment compensation law of any other state and before the effective date of a subsequent benefit year under this chapter, has performed services whether or not in employment as defined in section 23-615 for which wages were payable in an amount equal to or in excess of eight times the weekly benefit amount for which the individual is otherwise qualified under section 23-779. In making a determination under this paragraph, the department shall use information available in its records or require the individual to furnish necessary information within thirty days after the date notice is given that the information is required.

B. If an unemployed individual cannot establish a benefit year as defined in section 23-609 due to receipt during the base period of compensation for a temporary total disability pursuant to chapter 6 of this title, or any similar federal law, the individual's base period shall be the first four of the last five completed calendar quarters immediately preceding the first day of the calendar week in which the disability began. Wages previously used to establish a benefit year may not be reused. This subsection does not apply unless all of the following occur:

1. The individual has filed a claim for benefits not later than the fourth calendar week of unemployment after the end of the period of disability.

2. The claim is filed within two years after the period of disability begins.

3. The individual meets the requirements of subsection A of this section.

4. The individual has attempted to return to the employment where the temporary total disability occurred.

C. If an unemployed individual is a member of the national guard or other reserve component of the United States armed forces, the individual is not considered to be either employed or unavailable for work by reason of the individual's participation in drill, training or other national guard or reserve activity that occurs on not more than one weekend per month or in lieu of a weekend drill or the equivalent.

D. The department shall not disqualify an individual from receiving benefits under this chapter on the basis of the individual's separation from employment if the individual is a victim of domestic violence and leaves employment due to a documented case involving domestic violence pursuant to section 13-3601 or 13-3601.02. Benefits paid to an individual pursuant to this subsection shall not be charged against an employer's account pursuant to section 23-727, subsection G.

E. The department shall not disqualify an individual from receiving benefits under this chapter on the basis of the individual's separation from employment if the individual was terminated from employment for not receiving a COVID-19 vaccine or COVID-19 booster shot required by the employer. Benefits paid to an individual pursuant to this subsection shall not be charged against an employer's account pursuant to section 23-727 if the employer's requirement that employees receive the COVID-19 vaccine or COVID-19 booster shot is required by law.

F. For the purposes of subsection A, paragraph 6 7 of this section, wages shall be counted as wages for insured work for benefit purposes with respect to any benefit year only if that benefit year begins subsequent to the date on which the employing unit by which those wages were paid has become an employer subject to this chapter. END_STATUTE

Sec. 5. Section 23-773, Arizona Revised Statutes, is amended to read:

START_STATUTE23-773. Examination and determination of claims

A. A representative designated by the department as a deputy shall promptly examine any claim for benefits and, on the basis of the facts found by the deputy, shall determine whether or not the claim is valid. If the claim is valid, the deputy shall also determine the week with respect to which the benefit year shall commence, the weekly benefit amount payable and the maximum duration of the benefit.

B. The deputy shall promptly notify the claimant and any other interested parties of the determination and the reasons for the determination. Except as provided in subsection D of this section, unless the claimant or an interested party, within seven calendar days after the delivery of notification, or within fifteen calendar days after notification was mailed to the claimant's or interested party's last known address, files an appeal from the determination, it shall become final, and benefits shall be paid or denied in accordance with the determination. The department shall adopt rules to allow an appeal to be filed in writing, electronically or by telephone. If an appeal tribunal affirms a determination of the deputy allowing benefits, or the appeals board affirms a determination or decision allowing benefits, the benefits shall be paid regardless of any appeal that may thereafter be taken, but if that decision is finally reversed, no employer's account shall be charged with benefits so paid.

C. On receipt of a request from an interested party for information about a deputy's determination made pursuant to this section or section 23-673, the department shall make available by memorandum or other written document within five days after receipt of the request the following information:

1. The facts considered and the facts relied on in making the determination.

2. The specific statutes, regulations or other authority relied on in making the determination.

3. The reasoning applied in making the determination.

D. Before the time for appeal as prescribed in subsection B of this section has expired, an interested party may request a reconsidered determination. The department shall examine the request and, within seven calendar days, deny the request or issue a reconsidered determination. The interested party may prove that a response was timely filed by using evidence of fax records that documents the date and time when a faxed response was transmitted and received by the department. A request for reconsideration that is denied shall be treated as an appeal, and the same procedure shall be followed as provided for in case of appeal from the original determination. If a reconsidered determination is issued, the time for appeal shall run from the date of issuance of the reconsidered determination. The employer and the claimant shall each be permitted no allowed not more than one request for reconsideration on each case.

E. Before the actual filing of an appeal under subsection B of this section, but not later than the time permitted allowed to appeal, the department on its own motion may issue a reconsidered determination. After the time for appeal has expired, but within one year after the issuance of the original determination, the department with authorization of the unemployment insurance program administrator may issue a reconsidered determination, on the basis of newly discovered evidence that by due diligence could not have been previously discovered, if no administrative or judicial review has occurred or is pending on the original determination. If a redetermination is based on fraud, the one year one-year limitation on the issuance of redeterminations does not apply.

F. Prompt notice in writing of any reconsidered determination under subsection E of this section and the reasons for reconsideration shall be given to all interested parties. An interested party may appeal within the time prescribed under subsection B of this section, and the same procedure shall be followed as provided for in case of an appeal from the original determination.

G. In determining the validity of claims pursuant to subsection a of this section, the department may not pay benefits for an initial or ongoing claim until the initial claim is cross-checked, or an ongoing claim is cross-checked on a weekly basis, against the following data sets:

1. The national association of state workforce agencies' integrity data hub.

2. The United States department of health and human services national directory of new hires.

3. The department of economic security's new hire reporting system.

4. The state department of corrections inmate databases or a third-party, commercially available incarceration data network.

5. The social security administration's prisoner update processing system.

6. The centers for disease control and prevention's national vital statistics system's death records database.

7. The department of health services bureau of vital records' death records database or a third-party, commercially available death records database.

8. Current employment and income information deliverable instantaneously via verification services from external data sources pursuant to Section 23-799.01.

H. To make the most effective determination of the potential validity of claims, the department shall prioritize cross-checking the most current data sets, including those from a commercially available third-party database, before cross-checking older data sets.

I. If a cross-check pursuant to subsection G of this section results in information indicating that a claim is ineligible or fraudulent, that claim may not be paid and the claimant shall be disqualified from receiving benefits pursuant to section 23-778 and referred for prosecution.

J. The department shall examine any initial claim for benefits and confirm its validity before benefits are paid if the initial claim:

1. Was submitted electronically through an internet protocol address located outside of this state or the United States.

2. References a mailing address or residential address for which another current claim was submitted.

3. Is associated with a direct deposit for a bank account already used for another current claim.

K. If a fraudulent claim was filed, the department may refer the matter for prosecution. END_STATUTE

Sec. 6. Section 23-776, Arizona Revised Statutes, is amended to read:

START_STATUTE23-776. Disqualification from benefits for failure to accept suitable work or actively seek work; exceptions

A. An individual shall be disqualified for benefits if the department finds the individual has failed without cause either to apply for available, suitable work, when so directed by the employment office or the department, to actively engage in seeking work, to accept suitable work when offered or to return to the individual's customary self-employment when so directed by the department to actively seek and apply for suitable work, to accept an offer of suitable work or to accept reemployment at the same employer for suitable work, if offered. The disqualification shall begin with the week in which the failure occurred and shall continue for the duration of the individual's unemployment and until the individual has earned wages in an amount equivalent to eight times the individual's weekly benefit amount otherwise payable.

B. An employer shall report to the department when an individual who was previously employed with that employer does any of the following:

1. Refuses to return to work.

2. Refuses to accept an offer of suitable work.

3. Fails, without cause, to appear for a scheduled interview.

4. Fails to respond to an offer of employment.

C. The department shall allow employers to submit the reports pursuant to subsection B of this section digitally or through email and shall conduct an independent review of each report to determine whether an individual should be disqualified from receiving benefits.

B. D. In determining whether or not work is suitable for an individual:

1. During the first four weeks of a benefit period, the department shall consider the degree of risk involved to the individual's health, safety and morals, the individual's physical fitness and prior training, the individual's experience and prior earnings, the individual's length of unemployment and prospects for securing local work in the individual's customary occupation and the distance of the available work from the individual's residence.

2. After the first four weeks of a benefit period, the department shall consider any employment offer that pays one hundred twenty percent of the individual's weekly benefit amount to be suitable work.

C. E. Notwithstanding any other provisions of this chapter, work shall not be deemed suitable and benefits shall not be denied under this chapter to an otherwise eligible individual for refusing to accept new work under any of the following conditions:

1. The position offered is vacant due directly to a strike, lockout or other labor dispute.

2. The wages, hours or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality.

3. As a condition of being employed, the individual would be required to join a company union or to resign from or refrain from joining a bona fide labor organization.

D. F. An individual is considered to have refused an offer of suitable work under subsection A of this section if an offer of work is withdrawn by an employer after an individual either:

1. Tests positive for drugs after a drug test given pursuant to chapter 2, article 14 of this title by or on behalf of a prospective employer as a condition of an offer of employment.

2. Refuses, without good cause, to submit to a drug test that is required by a prospective employer as a condition of an offer of employment. END_STATUTE

Sec. 7. Title 36, chapter 4, article 1, Arizona Revised Statutes, is amended by adding section 36-407.04, to read:

START_STATUTE36-407.04. Hospitals; patient immigration status; data collection; reporting requirements

A. Each hospital that accepts payment pursuant to chapter 29, article 1 of this title shall include a place on its patient admission or registration form for the patient or the patient's representative to state or indicate whether the patient is a United States citizen or lawfully present in the United States or is not lawfully present in the United States. The inquiry must be followed by a statement on the form that the patient's response will not affect the patient's care or result in a report of the patient's immigration status to immigration authorities.

B. Each hospital shall submit a quarterly report to the department within thirty days after the end of each calendar quarter that states the number of hospital admissions or emergency department visits within the previous quarter that were made by patients who indicated that they are a citizen of the United States or lawfully present in the United States, indicated that they are not lawfully present in the United States or declined to answer the question.

C. The department may adopt rules relating to the format and information to be contained in quarterly reports and the acceptable formats for hospitals to use in requesting information regarding a patient's immigration status on hospital admission or registration forms. The rules may not require the disclosure of patient names or any other personal identifying information to the department.

D. On or before March 1 of each year, the department shall submit a report to the governor, the president of the senate and the speaker of the house of representatives that includes the total number of hospital admissions and emergency department visits for the previous calendar year for which the patient or patient's representative reported that the patient is a citizen of the United States, is lawfully present in the United States or is not lawfully present in the United States or declined to answer the question. The report must also describe information relating to the costs of uncompensated care for aliens who are not lawfully present in the United States, the impact of uncompensated care on the cost or ability of hospitals to provide services to the public, hospital funding needs and other related information. The department shall provide a copy of the report to the secretary of state. END_STATUTE

Sec. 8. Title 36, chapter 29, article 1, Arizona Revised Statutes, is amended by adding sections 36-2903.18 and 36-2903.19, to read:

START_STATUTE36-2903.18. Data matching agreements; review of member eligibility information; quarterly eligibility redetermination; waiver requests

A. The administration shall enter into a data matching agreement with the department of revenue to identify members who have lottery or gambling winnings of $3,000 or more. the administration shall review this information On at least a monthly basis. If a member fails to disclose winnings of $3,000 or more and is identified through the database match, the administration shall consider the member's failure to disclose the information a violation of the system's terms of eligibility.

B. On at least a monthly basis, the administration shall:

1. Receive and review death records information from the department of health services concerning members and shall adjust system eligibility accordingly.

2. Review information concerning members that indicates a change in circumstances that may affect eligibility, including potential changes in residency as identified by out-of-state electronic benefit transfer card transactions.

C. On a quarterly basis, the administration shall redetermine the eligibility of able-bodied adults who are eligible pursuant to section 36-2901, 36-2901.01 or 36-2901.07 and who are not american indians or alaska natives. For the purposes of the redetermination process, the administration shall receive and review information from both:

1. the department of revenue concerning members that indicates a change in circumstances that may affect eligibility for the system, including potential changes in income, wages or residency as identified by tax records.

2. the department of economic security concerning members that indicates a change in circumstances that may affect eligibility, including changes to unemployment benefits, employment status or wages.

D. Unless required by federal law, the administration may not accept self-attestation of income, residency, age, household composition, caretaker or relative status or receipt of other health insurance coverage without independent verification before enrollment. The administration may not request authority to waive or decline to periodically check any available income-related data sources to verify eligibility.

E. The administration may not accept eligibility determinations for the system from an exchange established pursuant to 42 United States code section 18041(c). The administration may accept assessments from an exchange established pursuant to 42 United States code section 18041(c) but shall independently verify eligibility and make eligibility determinations.

F. If the administration receives information concerning a member that indicates a change in the member's circumstances that may affect eligibility, the administration shall review the member's eligibility.

G. The administration may execute a memorandum of understanding with any other department of this state for information required to be shared pursuant to this section. The administration may contract with one or more independent vendors to provide additional data or information that may indicate a change in circumstances and affect an individual's eligibility.

H. On or before April 1, 2027, the administration shall submit to the centers for medicare and medicaid services any waiver requests necessary to implement this section. END_STATUTE

START_STATUTE36-2903.19. Presumptive eligibility; limits; standards; notification; training

A. The administration shall request approval from the centers for medicare and medicaid services for a section 1115 waiver to allow the administration to eliminate mandatory hospital presumptive eligibility and restrict presumptive eligibility determinations to children and pregnant women eligibility groups. If approval for the section 1115 waiver is denied, the administration shall resubmit a subsequent request for approval within twelve months after each denial.

B. Unless required by federal law, the administration may not designate itself as a qualified health entity for the purpose of making presumptive eligibility determinations or for any purpose not expressly authorized by state law.

C. When making presumptive eligibility determinations, a qualified hospital shall do all of the following:

1. Notify the administration of each presumptive eligibility determination within five working days after the date the determination is made.

2. Assist individuals who are determined presumptively eligible under the system with completing and submitting a full application for system eligibility.

3. Notify each applicant in writing and on all relevant forms with plain language and large print that if the applicant does not file a full application for system eligibility with the administration before the last day of the following month, presumptive eligibility coverage will end on the last day of the following month.

4. Notify each applicant that if the applicant files a full application for system eligibility with the administration before the last day of the following month, presumptive eligibility coverage will continue until an eligibility determination is made on the application that is filed.

D. The administration shall apply the following standards to establish and ensure that accurate presumptive eligibility determinations are made by each qualified hospital:

1. Whether the qualified hospital submitted to the administration the presumptive eligibility card within five working days after the determination date.

2. Whether a full application for system eligibility was received by the administration before the expiration of the presumptive eligibility period.

3. If a full application was received by the administration, whether the individual was found to be eligible under the system.

E. If the administration determines that a qualified hospital fails to meet any of the standards established under subsection D of this section for any presumptive eligibility determination that the qualified hospital made, the administration shall notify the qualified hospital in writing within five days after the determination. The notice must include:

1. For the first violation, both of the following:

(a) A description of the standard that was not met and an explanation of why it was not met.

(b) Confirmation that a second finding will require that all applicable hospital staff participate in mandatory training by the administration on hospital presumptive eligibility rules.

2. For the second violation, all of the following:

(a) A description of the standard that was not met and an explanation of why it was not met.

(b) Confirmation that all applicable hospital staff will be required to participate in mandatory training by the administration on hospital presumptive eligibility rules, including the date, time and location of the training as determined by the administration.

(c) A description of available appeals procedures by which a qualified hospital may dispute the finding and remove the finding from the qualified hospital's record by providing clear and convincing evidence that the standard was met.

(d) Confirmation that if the qualified hospital subsequently fails to meet any standard for presumptive eligibility for any determination, the qualified hospital will no longer be qualified to make presumptive eligibility determinations under the system.

3. For the third violation, all of the following:

(a) A description of the standard that was not met and an explanation of why it was not met.

(b) A description of available appeals procedures by which a qualified hospital may dispute the finding and remove the finding from the qualified hospital's record by providing clear and convincing evidence that the standard was met.

(c) Confirmation that, effective immediately, the qualified hospital is no longer qualified to make presumptive eligibility determinations under the system. END_STATUTE

Sec. 9. Section 41-708, Arizona Revised Statutes, is amended to read:

START_STATUTE41-708. Annual report; state employee salaries; full-time equivalent positions; vacant positions; applicability; definitions

A. On or before October 1 of each year, the department shall collect from each budget unit and shall submit to the joint legislative budget committee and the governor's office of strategic planning and budgeting a report containing the number of full-time equivalent positions and the total amount of salaries for each budget unit for the prior fiscal year, delineated by:

1. Retirement system.

2. Employee tier.

3. Fund source.

B. the department shall also collect a list from each budget unit of all vacant, full-time EQUIVALENT positions that have been vacant for at least one hundred fifty days to include in the report submitted PURSUANT to subsection A of this section.

B. C. For the purposes of this section:

1. "Budget unit":

(a) Means a department, commission, board, institution or other agency of this state that receives, expends or disburses state monies or incurs obligations of this state.

(b) Does not include the Arizona board of regents, universities under the jurisdiction of the Arizona board of regents and community college districts.

2. "Employee tier" means a class of employees in a retirement system in which each employee is subject to the same employer contribution rate pursuant to title 38, chapter 5. END_STATUTE

Sec. 10. Title 41, chapter 4, article 1, Arizona Revised Statutes, is amended by adding section 41-710.04, to read:

START_STATUTE41-710.04. Agency vacancies; elimination; full-time equivalent positions; adjustment; definition

A. Notwithstanding any other law, each fiscal year A budget unit shall eliminate any positions within the budget unit that have been vacant for more than one hundred fifty days. The budget unit's allocated FULL-TIME EQUIVALENT POSITIONS shall be adjusted to reflect the elimination of any vacant positions.

B. For the purposes of this section, "Budget unit":

1. Means a department, commission, board, institution or other agency of this state that receives, spends or disburses state monies or incurs obligations of this state.

2. Does not include THE STATE DEPARTMENT OF CORRECTIONS, THE DEPARTMENT OF PUBLIC SAFETY, the Arizona board of regents, universities under the jurisdiction of the Arizona board of regents and community college districts. END_STATUTE

Sec. 11. Repeal

Section 41-3026.21, Arizona Revised Statutes, is repealed.

Sec. 12. Title 41, chapter 27, article 2, Arizona Revised Statutes, is amended by adding section 41-3030.27, to read:

START_STATUTE41-3030.27. Department of economic security; termination July 1, 2030

A. The department of economic security terminates on July 1, 2030.

B. Title 41, chapter 14 and this section are repealed on January 1, 2031.END_STATUTE

Sec. 13. Title 46, chapter 2, article 2, Arizona Revised Statutes, is amended by adding sections 46-232, 46-233, 46-234, 46-235 and 46-236, to read:

START_STATUTE46-232. Supplemental nutrition assistance program; eligibility evaluations; public posting; definitions

A. To determine or evaluate SNAP eligibility, the department of economic security shall:

1. Enter into a data matching agreement with the department of Revenue to identify households with lottery or gambling winnings of $3,000 or more and, to the extent permissible under federal law, to treat the data obtained as verified on receipt. To the extent the data may not be verified on receipt, the department of economic security shall refer those households with lottery or gambling winnings that are equal to or greater than the resource limit for household members who are elderly or who have a disability as prescribed in 7 Code of Federal Regulations section 273.8(b) to the department of economic security for further investigation.

2. On at least a monthly basis, review information that is provided by the department of health services and that identifies individuals who have had a change in circumstances that may affect SNAP eligibility.

3. On at least a quarterly basis, review the department'S information that identifies individuals who have had a change in circumstances that may affect SNAP eligibility, including a CHANGE in unemployment benefits, employment status or wages.

4. On at least a monthly basis, review the department's information that identifies individuals who have had a change in circumstances that may affect SNAP eligibility, including potential changes in residency as identified by out-of-state electronic benefit transfer card transactions.

5. On at least a monthly basis, review information that is provided by the state DEPARTMENT of corrections and that identifies individuals who have had a change in circumstances that may affect SNAP eligibility.

6. On at least a quarterly basis, review information that is provided by the department of revenue and that identifies households that have had a change in circumstances that may affect SNAP eligibility, including potential changes in income, wages or residency as identified by tax records.

7. On at least a quarterly basis, post on the department's public website the following aggregated amounts that were obtained from noncompliance and fraud investigations related to SNAP, excluding confidential and personally identifiable information:

(a) The number of SNAP cases that were investigated for intentional program violations or fraud.

(b) The number of SNAP cases that were referred to the attorney general's office for prosecution.

(d) The amount of monies recovered.

(e) The amount of monies spent for improper payments and ineligible RECIPIENTS as a percentage of cases that were investigated and reviewed.

(f) The amount of monies spent by electronic benefit card transactions that occurred outside of this state, categorized by state.

B. On at least a monthly basis, the department of health services and the department of economic security shall review the following information from federal sources to assess a recipient's continued eligibility for SNAP:

1. Earned income information, death register information, incarceration records, supplemental security income information, beneficiary records, earnings information and pension information that is maintained by the United States social security administration.

2. Income and employment information that is maintained in the national directory of new hires database and child support enforcement data that is maintained by the united states department of health and human services.

3. Payment and earnings information that is maintained by the united states department of housing and urban development.

4. National fleeing felon information that is maintained by the United States federal bureau of investigation.

C. If the department receives information that identifies an individual who is enrolled in SNAP and that indicates a change in circumstances that may affect that individual's SNAP eligibility, the department shall review that individual's case.

D. For the purposes of this section:

1. "Department" means the department of economic security.

2. "SNAP" means the supplemental nutrition assistance program. END_STATUTE

START_STATUTE46-233. Department of economic security; supplemental nutrition assistance program; work requirement waivers; discretionary exemption prohibition

A. The department of economic security may not seek, apply for, accept or renew any waiver of work requirement for able-bodied adults without dependents pursuant to 7 United States Code section 2015(o)(4) unless:

1. It is required by federal law.

2. It is authorized by state law.

B. The department of economic security may not exercise this state's option to provide any exemptions from the work requirement under 7 United States Code section 2015(o)(6)(f) unless authorized by state law. END_STATUTE

START_STATUTE46-234. Supplemental nutrition assistance program; mandatory employment and training

The department of economic security shall require able-bodied adults who are under sixty years of age and who are receiving supplemental nutrition assistance to participate in a mandatory employment and training program, as prescribed in 7 United States Code Section 2015(d), unless the recipient is:

1. In compliance with the work registration requirements under title IV of the social security act or the federal-state unemployment compensation system. A recipient who is noncompliant with the work registration requirements under Title IV of the social security act or the federal-state unemployment compensation system is noncompliant with the work requirements of 7 United States Code section 2015(d).

2. A parent or other member of a household who is responsible for the care of an incapacitated person or a dependent child who is under six years of age.

3. A bona fide student who is enrolled at least half time in any recognized school, training program or institution of higher education unless the recipient is ineligible to participate pursuant to 7 United States Code section 2015(e).

4. A regular participant in a drug addiction or an alcoholic treatment and rehabilitation program.

5. Employed at least thirty hours per week or receives weekly earnings that equal the minimum hourly rate under the fair labor standards act of 1938 (52 Stat. 1060; 29 United States Code sections 201 through 219), multiplied by thirty hours.

6. Sixteen, seventeen or eighteen years of age and is not the head of a household or attends school or is enrolled in an employment training program on at least a half-time basis. END_STATUTE

START_STATUTE46-235. Use of supplemental nutrition assistance benefits; purchases; waiver; definitions

A. The director of the department of economic security shall request any waiver from the united states department of agriculture to implement this section that includes the authority to restrict the purchase of noneligible foods using supplemental nutrition assistance program benefits.

B. If the waiver is not granted, the director shall resubmit the request annually and may pursue the united states department of agriculture pilot or demonstration authority as allowed under federal law.

C. The department shall provide clear guidance to supplemental nutrition assistance program recipients and retailers and allow a reasonable implementation period to ensure compliance with this section.

D. This section does not reduce benefit amounts, restrict access to eligible foods or limit participation in the supplemental nutrition assistance program.

E. For the purposes of this section:

1. "eligible foods" Means any food item that may be purchased using supplemental nutrition assistance program benefits and includes the following categories:

(a) Whole meats, poultry and fish, including frozen, fresh or canned products.

(b) Dairy products, INCLUDING milk, cheese, yogurt, butter, cream and milk alternatives.

(d) Fruits and vegetables, including fresh, frozen, dried or canned products without added sweeteners.

(e) Grains and grain products, including flour, rice, pasta, cereals and tortillas.

(f) Cooking oils and fats.

(g) Water products without added sweeteners or sugar substitutes.

(h) One hundred percent fruit or vegetable juice.

(i) Any food item approved for purchase under the federal women, infants and children food program.

2. "Noneligible foods" includes any of the following:

(a) Sugar-sweetened beverages, including soda and energy drinks.

(b) Candy and confectionery products.

(d) Prepared hot foods intended for immediate consumption. END_STATUTE

START_STATUTE46-236. Payment error rate; reduction; quarterly reports; requirements; auditor general

A. On or before December 30, 2030, the department shall reduce the supplemental nutrition assistance program's payment error rate as reported by the United States department of agriculture to not more than three percent.

B. Beginning in fiscal year 2026-2027 and each fiscal year thereafter, the department shall submit a quarterly report to the legislature within thirty days after the end of the quarter that details the department's monthly progress towards reducing the payment error rate and that includes strategies and barriers that may be present in reducing the payment error rate.

C. If the department fails to meet annual interim targets established by rule or the final target as prescribed in subsection A of this section, the department shall:

1. Submit a corrective action plan to the legislature within sixty days that includes an analysis of why the targets were not met and timelines for correcting the payment error rate.

2. Pay fifty percent of any federal liabilities that may be imposed due to the excess payment error rates. The remaining federal liabilities shall be paid from the state general fund.

3. Implement a corrective plan. If the department fails to comply with the corrective plan, the department's administrative funding shall be reduced by ten percent until resolved.

D. On or before November 15, 2027, The auditor general shall complete a special audit. the special audit shall determine what factors contributed to the payment error rate and shall include recommendations to reduce the payment error rate. The department shall implement the recommendations within twelve months after receiving the recommendations from the auditor general unless the recommendations are waived by the joint legislative audit committee. The auditor general may request that the department submit a written status report on the department's implementation of the special audit recommendations.

E. If the department corrects the payment error rate ahead of schedule, the legislature may allocate additional funding for program improvements. END_STATUTE

Sec. 14. Delayed repeal

Section 46-236, Arizona Revised Statutes, as added by this act, is repealed from and after December 31, 2032.

Sec. 15. Section 46-297.01, Arizona Revised Statutes, is amended to read:

START_STATUTE46-297.01. Electronic benefit transfer cards; replacements; out-of-state spending; fraud investigation

A. The department shall send each recipient who requests two replacement cards within a twelve-month period a letter informing the recipient that another request will initiate an investigation by the department to determine whether there is fraud. If a third-party vendor is administering replacement cards directly to recipients, the vendor shall notify the department after a recipient requests a second replacement card in a twelve-month period and makes any subsequent request thereafter.

B. After a recipient's request for a third replacement card within any twelve-month period, and any subsequent request thereafter, the department shall schedule an interview with the recipient and, if the department has been granted a waiver, determine whether there is fraud before issuing a new card. The recipient's request for a fourth replacement card requires the department to schedule an interview with the recipient to determine whether there is fraud before issuing a new card. The department shall request any necessary federal waivers to comply with this section.

C. If a recipient uses more than ten percent of the recipient's electronic benefit transfer card balance in a six-month period on out-of-state purchases, the department shall schedule an interview with the recipient to determine whether there is fraud.

D. On at least a monthly basis, the department shall use the data from an electronic benefit transfer card to identify any individual who has made purchases exclusively out-of-state over a ninety-day period. The department shall contact the individual who is identified within thirty days to determine whether that individual resides in this state. If the individual does not reside in this state, the department shall remove that individual within thirty days after contacting the individual. Within fifteen days after the individual's removal, the department shall refer the individual to the United States attorney's office for the district of arizona. END_STATUTE

Sec. 16. Legislative findings

A. For the purposes of section 46-235, Arizona Revised Statutes, as added by this act, the legislature finds that the supplemental nutrition assistance program is intended to:

1. Promote access to nutritious food.

2. Support the health and well-being of recipients.

3. Ensure responsible stewardship of taxpayer monies.

B. The purpose of section 46-235, Arizona Revised Statutes, as added by this act, is to prioritize access to whole and minimally processed foods while limiting the purchase of items with minimal nutritional value.

Sec. 17. Purpose

Pursuant to section 41-2955, subsection B, Arizona Revised Statutes, the legislature continues the department of economic security to provide social services, welfare programs, vocational rehabilitation and employment services and developmental disability programs.

Sec. 18. Retroactivity

Sections 11 and 12 of this act apply retroactively to from and after July 1, 2026.

Sec. 19. Effective Date

Sections 36-2903.18 and 36-2903.19, Arizona Revised Statutes, as added by this act, are effective from and after December 31, 2026.