HB4032 - 572R

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

Section 1. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 8-1181, Arizona Revised Statutes, is amended to read:

START_STATUTE8-1181. Early childhood development and health fund; exemption

A. The early childhood development and health fund is established consisting of funds monies transferred pursuant to subsection D; of this section, federal, state, local and private funds monies accepted by the board pursuant to section 8-1182, ; monies deposited pursuant to section 42-5503 and any monies appropriated to the board by the legislature. The board shall administer the fund.

B. The early childhood development and health fund is divided into the following accounts:

1. The program account. ,

2. The administrative costs account. ,

3. The private gifts account. ,

4. The grant monies account. and

5. The legislative appropriations account.

C. Monies in the program, administrative costs, private gifts and grant monies accounts of the fund are not subject to legislative appropriation and are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

D. Ninety percent of the monies deposited into in the early childhood development and health fund pursuant to section 42-3373 42-3372 shall be deposited into in the program account and ten percent of the monies shall be deposited into in the administrative costs account. Administrative costs of the board, including staff compensation, may only be paid from the administrative costs account. Funds monies may be transferred by the board from the administrative costs account to the program account, but funds monies may not be transferred from the program account to the administrative costs account. Funds monies may be transferred by the board from the private gifts account and the grant monies account to the administrative costs account to cover the administrative costs of programs and activities undertaken using gift or grant monies.

E. The board may invest any unexpended monies in the fund as provided in title 35, chapter 2. Interest and other income from investments of monies in any account shall be credited to that account except as otherwise provided by law. END_STATUTE

Sec. 2. Section 15-249.14, Arizona Revised Statutes, is amended to read:

START_STATUTE15-249.14. Ninth grade on-track grant program; school requirements; fund; exemption

A. The ninth grade on-track grant program is established in the department of education. The department shall administer the grant program and may adopt rules, policies and procedures to carry out the purposes of this section. The department shall:

1. Establish procedures for each of the following:

(a) A school district or charter school to apply for a grant.

(b) The department to evaluate the grant applications.

(c) The department to award grants to eligible school districts and charter schools for a term of more than one year and not more than five years.

2. The department shall ensure that the grant application and reporting requirements do not impose an undue burden on the school districts and charter schools.

3. Require each grant application to be approved by a majority vote of the school district governing board or charter school governing body, whichever applies, before the school district or charter school may submit the application to the department.

4. Award grants on a first-come, first-served basis to each eligible school district or charter school in an amount that is equal to at least $150 for each ninth grade student who is enrolled or projected to be enrolled in the school district or charter school during the term of the grant, except that the total number of ninth grade students who may be funded pursuant to this paragraph may not exceed:

(a) For grants that are awarded in fiscal year 2025-2026, twenty-two thousand six hundred fifty.

(b) For grants that are awarded beginning in fiscal year 2026-2027, zero.

5. Provide administrative support to grant recipients for implementing ninth grade on-track programs and services pursuant to this section.

B. Each school district or charter school that receives a grant award pursuant to subsection A of this section shall:

1. Use the monies to establish and expand programs, opportunities and strategies that help ninth grade students complete sufficient credits to be on track to graduate in four years, including all of the following:

(a) Providing real-time, accessibly formatted data regarding student grades, attendance and behavior to grade nine teachers and support staff.

(b) Allocating time for grade nine teachers and support staff to meet during the school day to review data and develop intervention strategies for at-risk students in grade nine. The school district or charter school shall maintain records of meetings held pursuant to this subdivision and provide those records to the department on request.

(c) Providing timely, actionable data for grade nine teachers, including providing access to data and developing teachers' data literacy.

(d) Creating highly effective grade nine success teams.

(e) Establishing foundational structures and conditions for grade nine on-track work.

(f) Establishing systems and processes to optimize operations of the grade nine success team.

(g) Systematizing grade nine success by recruiting and engaging all stakeholders.

(h) Creating and executing proactive and data-driven intervention and referral systems and processes.

(i) Implementing proactive and high-leverage intervention strategies.

(j) Creating and executing a comprehensive system of grade nine transition supports.

(k) Creating a personalized and supportive environment for students in grade nine.

(l) Providing early preparation for high school entry.

(m) Providing proactive supports to grade nine teachers and support staff.

(n) Implementing high quality instructional strategies and fair grading practices.

(o) Developing learning-centered professional communities and student-centered learning communities.

(p) Establishing a partnership with an organization that has at least five years of experience providing ninth grade on-track programs and services to school districts and charter schools to increase grade nine on-track rates.

2. On request from the department, provide any information necessary to demonstrate compliance with this section.

C. A school district or charter school that receives monies pursuant to this section shall supplement and not supplant programs, opportunities and strategies that help ninth grade students complete sufficient credits to be on track to graduate in four years.

D. For the purposes of this section, a student is deemed on track to graduate in four years if the student does both of the following:

1. Completes at least twenty-five percent of the credits required for the student to graduate from high school by the end of ninth grade.

2. Does not earn more than one letter grade of F, or the equivalent, in ninth grade.

E. The ninth grade on-track grant program fund is established consisting of monies deposited pursuant to section 42-5503, legislative appropriations, gifts, grants and donations. The department shall administer the fund. Monies in the fund are continuously appropriated and are exempt from the provisions of section 35-190 relating to lapsing of appropriations. The department shall use monies in the fund to provide grants pursuant to subsection A of this section. END_STATUTE

Sec. 3. Title 15, chapter 2, article 2, Arizona Revised Statutes, is amended by adding section 15-249.20, to read:

START_STATUTE15-249.20. Out-of-school time program fund

A. The out-of-school time program fund is established consisting of monies deposited pursuant to section 42-5503. The department shall administer the fund.

B. Monies in the fund are continuously appropriated and are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

C. The department shall use the monies to support facility-based, out-of-school time program providers that provide proven and tested recreational, educational and character-building programs for school-age children. END_STATUTE

Sec. 4. Subject to the requirements of article IV, part 1, section 1, Constitution of Arizona, section 36-601.01, Arizona Revised Statutes, is amended to read:

START_STATUTE36-601.01. Smoke-free Arizona act

A. Definitions. The following words and phrases, whenever used in this section, shall be construed as defined in this section:

1. "Employee" means any person who performs any service on a full-time, part-time or contracted basis whether or not the person is denominated an employee, independent contractor or otherwise and whether or not the person is compensated or is a volunteer.

2. "Employer" means a person, business, partnership, association, the state of Arizona and its political subdivisions, corporations, including a municipal corporations, trust, or non-profit entity that employs the services of one or more individual persons.

3. "Enclosed area" means all space between a floor and ceiling that is enclosed on all sides by permanent or temporary walls or windows (exclusive of doorways), which extend from the floor to the ceiling. Enclosed area includes a reasonable distance from any entrances, windows and ventilation systems so that persons entering or leaving the building or facility shall not be subjected to breathing tobacco smoke and so that tobacco smoke does not enter the building or facility through entrances, windows, ventilation systems or any other means.

4. "Health care facility" means any enclosed area utilized by any health care institution licensed according to title 36 chapter 4, chapter 6, article 7, or chapter 17, or any health care professional licensed according to title 32, chapters 7, 8, 11, 13, 14, 15, 15.1, 16, 17, 18, 19, 19.1, 21, 25, 28, 29, 33, 34, 35, 39, 41, or 42.

5. "Person" means an individual, partnership, corporation, limited liability company, entity, association, governmental subdivision or unit of a governmental subdivision, or a public or private organization of any character.

6. "Physically separated" means all space between a floor and ceiling which is enclosed on all sides by solid walls or windows (exclusive of door or passageway) and independently ventilated from smoke-free areas, so that air within permitted smoking areas does not drift or get vented into smoke-free areas.

7. "Places of employment" means an enclosed area under the control of a public or private employer that employees normally frequent during the course of employment, including office buildings, work areas, auditoriums, employee lounges, restrooms, conference rooms, meeting rooms, classrooms, cafeterias, hallways, stairs, elevators, health care facilities, private offices and vehicles owned and operated by the employer during working hours when the vehicle is occupied by more than one person. A private residence is not a "place of employment" unless it is used as a child care, adult day care, or health care facility.

8. "Veteran and fraternal clubs" means a club as defined in A.R.S. 4-101(7)(a)(b) or (c) Section 4-101, paragraph 8, subdivision (a), (b) or (c).

9. "Public place" means any enclosed area to which the public is invited or in which the public is permitted, including airports, banks, bars, common areas of apartment buildings, condominiums or other multifamily housing facilities, educational facilities, entertainment facilities or venues, health care facilities, hotel and motel common areas, laundromats, public transportation facilities, reception areas, restaurants, retail food production and marketing establishments, retail service establishments, retail stores, shopping malls, sports facilities, theaters, and waiting rooms. A private residence is not a "public place" unless it is used as a child care, adult day care, or health care facility.

10. "Retail tobacco store" means a retail store that derives the majority of its sales from tobacco products and accessories.

11. "Smoking" means inhaling, exhaling, burning, or carrying or possessing any lighted tobacco product, including cigars, cigarettes, pipe tobacco and any other lighted tobacco product.

12. "Sports facilities" means enclosed areas of sports pavilions, stadiums, gymnasiums, health spas, boxing arenas, swimming pools, roller and ice rinks, billiard halls, bowling alleys, and other similar places where members of the general public assemble to engage in physical exercise, participate in athletic competition, or witness sporting events.

B. Smoking is prohibited in all public places and places of employment within the state of Arizona, except the following:

1. Private residences, except when used as a licensed child care, adult day care, or health care facility.

2. Hotel and motel rooms that are rented to guests and are designated as smoking rooms; provided, however, that not more than fifty percent of rooms rented to guests in a hotel or motel are so designated.

3. Retail tobacco stores that are physically separated so that smoke from retail tobacco stores does not infiltrate into areas where smoking is prohibited under the provisions of this section.

4. Veterans and fraternal clubs when they are not open to the general public.

5. Smoking when associated with a religious ceremony practiced pursuant to the American Indian religious freedom act of 1978.

6. Outdoor patios so long as tobacco smoke does not enter areas where smoking is prohibited through entrances, windows, ventilation systems, or other means.

7. A theatrical performance upon a stage or in the course of a film or television production if the smoking is part of the performance or production.

C. The prohibition on smoking in places of employment shall be communicated to all existing employees by the effective date of this section and to all prospective employees upon their application for employment.

D. Notwithstanding any other provision of this section, an owner, operator, manager, or other person or entity in control of an establishment, facility, or outdoor area may declare that entire establishment, facility, or outdoor area as a nonsmoking place.

E. Posting of signs and ashtray removal.

1. "No smoking" signs or the international "no smoking" symbol (consisting of a pictorial representation of a burning cigarette enclosed in a red circle with a red bar across it) shall be clearly and conspicuously posted by the owner, operator, manager, or other person in control of that place identifying where smoking is prohibited by this section and where complaints regarding violations may be registered.

2. Every public place and place of employment where smoking is prohibited by this section shall have posted at every entrance a conspicuous sign clearly stating that smoking is prohibited.

3. All ashtrays shall be removed from any area where smoking is prohibited by this section by the owner, operator, manager, or other person having control of the area.

F. No employer may discharge or retaliate against an employee because that employee exercises any rights afforded by this section or reports or attempts to prosecute a violation of this section.

G. The law shall be implemented and enforced by the department of health services as follows:

1. The department shall design and implement a program, including the establishment of an internet website, to educate the public regarding the provisions of this law.

2. The department shall inform persons who own, manage, operate or otherwise control a public place or place of employment of the requirements of this law and how to comply with its provisions including making information available and providing a toll-free telephone number and e-mail address to be used exclusively for this purpose.

3. Any member of the public may report a violation of this law to the department. The department shall accept oral and written reports of violation and establish an e-mail address(es) and toll-free telephone number(s) to be used exclusively for the purpose of reporting violations. A person shall not be required to disclose the person's identity when reporting a violation.

4. If the department has reason to believe a violation of this law exists, the department may enter upon and into any public place or place of employment for purposes of determining compliance with this law. However, the department may inspect public places where food or alcohol is served at any time to determine compliance with this law.

5. If the department determines that a violation of this law exists at a public place or place of employment, the department shall issue a notice of violation to the person who owns, manages, operates or otherwise controls the public place or place of employment. The notice shall include the nature of each violation, date and time each violation occurred, and department contact person.

6. The department shall impose a civil penalty on the person in an amount of not less than $100, but not more than $500 for each violation. In considering whether to impose a fine and the amount of the fine, the department may consider whether the person has been cited previously and what efforts the person has taken to prevent or cure the violation including reporting the violation or taking action under subsection J. Each day that a violation occurs constitutes a separate violation. The director may issue a notice that includes the proposed amount of the civil penalty assessment. A person may appeal the assessment of a civil penalty by requesting a hearing. If a person requests a hearing to appeal an assessment, the director shall not take further action to enforce and collect the assessment until the hearing process is complete. The director shall impose a civil penalty only for those days on which the violation has been documented by the department.

7. If a civil penalty imposed by this section is not paid, the attorney general or a county attorney shall file an action to collect the civil penalty in a justice court or the superior court in the county in which the violation occurred.

8. The department may apply for injunctive relief to enforce these provisions in the superior court in the county in which the violation occurred. The court may impose appropriate injunctive relief and impose a penalty of not less than $100 but not more than $500 for each violation. Each day that a violation occurs constitutes a separate violation. If the superior court finds the violations are willful or evidence a pattern of noncompliance, the court may impose a fine up to $5000 per violation.

9. The department may contract with a third party to determine compliance with this law.

10. The department may delegate to a state agency or political subdivision of this state any functions, powers or duties under this law.

11. The director of the department may promulgate rules for the implementation and enforcement of this law. The department is exempt from the rulemaking procedures in A.R.S. § title 41, chapter 6 except the department shall publish draft rules and thereafter take public input including hold at least two public hearings prior to implementing the rules. This exemption expires May 1, 2007.

H. Beginning on June 1, 2008 and every other June 1 thereafter, the director of the Arizona department of health services shall issue a report analyzing its activities to enforce this law, including the activities of all of the state agencies or political subdivisions to whom the department has delegated responsibility under this law.

I. An owner, manager, operator or employee of place regulated by this law shall inform any person who is smoking in violation of this law that smoking is illegal and request that the illegal smoking stop immediately.

J. This law does not create any new private right of action nor does it extinguish any existing common law causes of action.

K. A person who smokes where smoking is prohibited is guilty of a petty offense with a fine of not less than fifty dollars $50 and not more than three hundred dollars $300.

L. Smoke-free Arizona fund

1. The smoke-free Arizona fund is established consisting of all revenues deposited in the fund pursuant to §42-3251.02 sections 42-3251.02 and 42-5503 and interest earned on those monies. The Arizona department of health services shall administer the fund. On notice from the department, the state treasurer shall invest and divest monies in the fund as provided by §35-313 section 35-313 and monies earned from investment shall be credited to the fund.

2. All money in the smoke-free Arizona fund shall be used to enforce the provisions of this section provided however that if there is money remaining after the department has met its enforcement obligations, that remaining money shall be deposited in the tobacco products tax fund and used for education programs to reduce and eliminate tobacco use and for no other purpose.

3. Monies in this fund are continuously appropriated, are not subject to further approval, do not revert to the general fund and are exempt from the provisions of §36-190 section 35-190 relating to the lapsing of appropriations.

M. This section does not prevent a political subdivision of the state from adopting ordinances or regulations that are more restrictive than this section nor does this section repeal any existing ordinance or regulation that is more restrictive than this section.

N. Tribal sovereignty — this section has no application on Indian reservations as defined in ARS 42-3301(2) section 42-3301. END_STATUTE

Sec. 5. Title 41, chapter 14, article 5, Arizona Revised Statutes, is amended by adding section 41-2023, to read:

START_STATUTE41-2023. Early intervention support fund; exemption

A. The early intervention support fund is established consisting of monies deposited pursuant to section 42-5503. The department shall administer the fund.

B. Monies in the fund are continuously appropriated and are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

C. Monies in the fund may be used for early intervention programs and services for infants and toddlers with or at risk of developmental delays and their families in accordance with Public Law 99-457 (20 United States Code chapter 33, subchapter iv, part c). END_STATUTE

Sec. 6. Title 42, chapter 5, Arizona Revised Statutes, is amended by adding article 11, to read:

ARTICLE 11. VAPOR PRODUCTS AND alternative

NICOTINE PRODUCTS

START_STATUTE42-5501. Definitions

In this article, unless the context otherwise requires:

1. "alternative Nicotine Product":

(a) Means any noncombustible product that contains nicotine from any source and that is intended for human consumption, whether chewed, absorbed, dissolved, ingested or consumed by any other means.

(b) Does not include:

(i) A tobacco product as defined in section 42-3001.

(ii) A vapor product.

(iii) any Drug, device or combination product authorized for sale by the United States food and drug administration, as those terms are defined in the federal food, drug, and cosmetic act (52 Stat. 1040; 21 United States code section 321) or the regulations adopted pursuant to the federal food, drug, and cosmetic act.

2. "Consumer":

(a) means A person in this state that purchases any alternative nicotine product or vapor product subject to the tax imposed by this article.

(b) Does not include a distributor intending to sell or distribute the nicotine product or alternative vapor product, a retailer or a wholesaler.

3. "Distributor" means any person that manufactures, produces, ships, transports or imports into this state or in any manner acquires or possesses for the purpose of making the first sale of a nicotine product or alternative vapor product.

4. "Vapor Product":

(a) Means any device that may be used to deliver any aerosolized or vaporized substance to the person who inhales from the device, including an e-cigarette, e-cigar, e-pipe, vape pen or e-hookah.

(b) Includes whether or not sold separately:

(i) Any component, part or accessory of the device.

(ii) Any substance that is intended to be aerosolized or vaporized during the use of the device, whether or not the substance contains nicotine.

(i) Marijuana or marijuana products.

(ii) any Drug, device or combination product authorized for sale by the United States food and drug administration, as those terms are defined in the federal food, drug, and cosmetic act (52 Stat. 1040; 21 United States code section 321) or the regulations adopted pursuant to the federal food, drug, and cosmetic act. END_STATUTE

START_STATUTE42-5502. Levy and rate of tax

A. There is levied and the department shall collect an excise tax on all alternative nicotine products and vapor products sold at retail to a consumer at a rate of fifty percent of the price of the alternative nicotine product or vapor product sold.

B. The tax levied and collected pursuant to this section may not be included in computing the tax base, gross proceeds of sales or gross income of a retailer for the purposes of this chapter and chapter 6 of this title. END_STATUTE

START_STATUTE42-5503. Administration of tax; distribution of revenues

A. Unless the context otherwise requires, article 1 of this chapter governs the administration of the tax imposed under this article.

B. A separate bond is not required of employees of the department to administer this article.

C. The department shall separately account for the monies paid under this article and shall deposit, pursuant to sections 35-146 and 35-147, all monies collected under this article as follows:

1. Twenty-one percent in the state general fund.

2. Forty-nine percent in the early childhood development and health fund established by section 8-1181. Of the monies deposited in the early childhood development and health fund pursuant to this paragraph, seventy percent shall be deposited in the same manner as prescribed in section 8-1181, subsection D and thirty percent of the monies shall be deposited in the grant monies account established by section 8-1181, subsection b, paragraph 4 for the purposes of improving the quality of and increasing access to early childhood education programs, including a program in which public monies match other public monies or private monies to support access to and quality of child care in support of the workforce.

3. Five percent in the ninth grade on-track grant program fund established by section 15-249.14.

4. One percent in the smoke-free arizona fund established by section 36-601.01.

5. Nineteen percent in the out-of-school time program fund established by section 15-249.20.

6. Five percent in the early intervention support fund established by section 41-2023. END_STATUTE

Sec. 7. Exemption from rulemaking

Notwithstanding any other law, for the purposes of this act, the department of revenue is exempt from the rulemaking requirements of title 41, chapter 6, Arizona Revised Statutes, for one year after the effective date of this act.

Sec. 8. Applicability

This act applies to taxable periods beginning on or after the first day of the month following the general effective date.

Sec. 9. Requirements for enactment; three-fourths vote

Pursuant to article IV, part 1, section 1, Constitution of Arizona, sections 8-1181 and 36-601.01, Arizona Revised Statutes, as amended by this act, are effective only on the affirmative vote of at least three-fourths of the members of each house of the legislature.

Sec. 10. Requirements for enactment; two-thirds vote

Pursuant to article IX, section 22, Constitution of Arizona, this act is effective only on the affirmative vote of at least two-thirds of the members of each house of the legislature and is effective immediately on the signature of the governor or, if the governor vetoes this act, on the subsequent affirmative vote of at least three-fourths of the members of each house of the legislature.