SB1327 - 572R

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

Section 1. Section 15-1626, Arizona Revised Statutes, is amended to read:

START_STATUTE15-1626. General administrative powers and duties of board; definition

A. The Arizona board of regents shall:

1. Have and exercise the powers necessary for the effective governance and administration of the institutions under the board's control. To that end, the board may adopt, and authorize each university to adopt, regulations, policies, rules or measures as are deemed necessary and may delegate in writing to the board's committees, to university presidents, or the presidents' designees, or to other entities under the board's control, any part of the board's authority for the administration to administer and governance of govern those institutions, including those powers enumerated in section 15-1625, subsection B, paragraphs 2 and 4, paragraphs 3, 4, 8, 9, 11, 12 and 22 of this subsection and subsection B of this section. Any delegation of authority may be rescinded by the board at any time in whole or in part.

2. Appoint and employ and determine the compensation of presidents with the power and authority and for the purposes in connection with the operation of the institutions as the board deems necessary.

3. Appoint and employ and determine the compensation of vice presidents, deans, professors, instructors, lecturers, fellows and the other officers and employees with the power and authority and for the purposes in connection with the operation of the institutions as the board deems necessary, or delegate the board's authority pursuant to paragraph 1 of this subsection.

4. Remove any officer or employee when the interests of education in this state so require in accordance with the board's personnel rules and policies.

5. Fix tuitions and fees to be charged and differentiate the tuitions and fees between institutions and between residents, nonresidents, undergraduate students, graduate students, students from foreign countries and students who have earned credit hours in excess of the credit hour threshold. For the purposes of this paragraph, the undergraduate credit hour threshold is one hundred forty-five hours for students who attend a university under the jurisdiction of the board. The undergraduate credit hour threshold shall be based on the actual full-time equivalent student enrollment counted on the forty-fifth day of every fall and spring semester, divided by two, and any budget adjustment based on student enrollment shall occur in the fiscal year following the actual full-time equivalent student enrollment count. The undergraduate credit hour threshold shall not apply to degree programs that require credit hours above the credit hour threshold, credits earned in the pursuit of up to two baccalaureate degrees, credits earned in the pursuit of up to two state regulated licensures or certificates, credits earned in the pursuit of teaching certification, credits transferred from a private institution of higher education, credits transferred from an institution of higher education in another state, credits earned at another institution of higher education but that are not accepted as transfer credits at the university where the student is currently enrolled and credits earned by students who enroll at a university under the jurisdiction of the board more than twenty-four months after the end of that student's previous enrollment at a public institution of higher education in this state. On or before October 15 of each year, the board shall report to the joint legislative budget committee the number of in-state students and out-of-state students who were enrolled at universities under the jurisdiction of the board during the previous fiscal year and who met or exceeded the undergraduate credit hour threshold prescribed in this paragraph. The amount of tuition and fees included in the operating budget for the university adopted by the board as prescribed in paragraph 13 of this subsection is subject to legislative appropriation and shall be deposited in a separate tuition and fees subaccount for each university. All other tuition and fee revenue shall be retained by each university for expenditure as approved by the board in a separate local tuition and fees subaccount for each university. This subaccount shall consist of only tuition and fees. The universities shall not use any tuition or fee revenue to fund or support an alumni association.

6. Adopt rules to govern the board's tuition and academic fee setting process that provide for the following:

(a) At least one public hearing at each university as an opportunity for students and members of the public to comment on any proposed increase in tuition or fees.

(b) Publication of the notice of public hearing at least ten days before the hearing in a newspaper of general circulation in Maricopa county, Coconino county and Pima county. The notice shall include the date, time and location of the public hearing.

(c) Public disclosure by each university of any proposed increases in tuition or fees at least ten days before the public hearing.

(d) A roll call vote of any final board action on changes in tuition, including tuition rate changes for online programs, or academic fees.

(e) Public disclosure by the board and each university of any final board action on changes in tuition or academic fees.

7. Pursuant to section 35-115, submit a budget request for each institution under the board's jurisdiction that includes the estimated tuition and fee revenue available to support the programs of the institution as described in the budget request. The estimated available tuition and fee revenue shall be based on the tuition and registration fee rates in effect at the time the budget request is submitted with adjustments for projected changes in enrollment as provided by the board.

8. Establish curricula and designate courses at the several institutions that in the board's judgment will best serve the interests of this state.

9. Award degrees and diplomas on the completion of the courses and curriculum requirements that the board deems appropriate.

10. Prescribe qualifications for admission of all students to the universities. The board shall establish policies for guaranteed admission that ensure fair and equitable access to students in this state from public, private and charter schools and homeschools. For the purpose of determining the qualifications of honorably discharged veterans, veterans are those persons who served in the armed forces for at least two years and who were previously enrolled at a university or community college in this state. Prior failing grades received by a veteran at the university or community college in this state may not be considered.

11. Adopt any energy conservation standards adopted by the department of administration for the construction of new buildings.

12. Employ for the time and purposes that the board requires attorneys whose compensation shall be fixed and paid by the board. Litigation to which the board is a party and for which self-insurance is not provided may be compromised or settled at the direction of the board.

13. Adopt annually an operating budget for each university equal to the sum of appropriated state general fund monies and the amount of tuition and fees approved by the board and allocated to each university operating budget.

14. In consultation with the state board of education and other education groups, develop and implement a program to award honors endorsements to be affixed to the high school diplomas of qualifying high school pupils and to be included in the transcripts of pupils who are awarded endorsements. The Arizona board of regents shall develop application procedures and testing criteria and adopt testing instruments and procedures to administer the program. In order to receive an honors endorsement, a pupil must demonstrate an extraordinary level of knowledge, skill and competency as measured by the testing instruments adopted by the Arizona board of regents in mathematics, English, science and social studies. Additional subjects may be added at the determination of the Arizona board of regents. The program is voluntary for pupils.

15. Require the publisher of each literary and nonliterary textbook used in the universities of this state to furnish to the board computer software in a standardized format when software becomes available for nonliterary textbooks from which braille versions of the textbooks may be produced.

16. Require universities that provide a degree in education to require courses that are necessary to obtain a provisional structured English immersion endorsement as prescribed by the state board of education.

17. Acquire for each classroom United States flags that are manufactured in the United States and that are at least two feet by three feet, hardware to appropriately display the United States flags and a legible copy of the Constitution of the United States and the Bill of Rights. The board shall display the flags in each classroom in accordance with title 4 of the United States Code and display a legible copy of the Constitution of the United States and the Bill of Rights adjacent to the flag.

18. To facilitate the transfer of military personnel and their dependents to and from the public schools of this state, pursue, in cooperation with the state board of education, reciprocity agreements with other states concerning the transfer credits for military personnel and their dependents. A reciprocity agreement entered into pursuant to this paragraph shall:

(a) Address procedures for each of the following:

(i) The transfer of student records.

(ii) Awarding credit for completed coursework.

(iii) Permitting Allowing a student to satisfy the graduation requirements prescribed in section 15-701.01 through the successful performance on comparable exit-level assessment instruments administered in another state.

(b) Include appropriate criteria developed by the state board of education and the Arizona board of regents.

19. Require a university to publicly post notices of all of the university's employment openings, including the title and description, instructions for applying and relevant contact information.

20. In consultation with the community college districts in this state, develop and implement common equivalencies for specific levels of achievement on advanced placement examinations and international baccalaureate examinations in order to award commensurate postsecondary academic credits at community colleges and public universities in this state.

21. On or before August 1 of each year, report to the joint legislative budget committee the graduation rate by university campus during the previous fiscal year. The board shall also report the retention rate by university campus and by class, as determined by date of entry during the previous fiscal year.

22. Enter into an agreement with one or more career technical education district governing boards pursuant to section 15-393, subsection K if the agreement, in the board's judgment, will serve the interests of this state.

23. Review each gift from a foreign principal to a university under the jurisdiction of the arizona board of regents or a proposed contract, academic partnership or research partnership between a foreign principal and a university under the jurisdiction of the arizona board of regents. The Arizona BOARD of regents shall disapprove any gift, contract, academic partnership or research partnership that the board reviews pursuant to this paragraph unless all of the following are met:

(a) A federal law enforcement agency completes a security assessment of the gift, contract, academic partnership or research partnership and concludes that it does not create a risk to the safety of this nation or this state.

(b) The higher education research security council established by section 15-1635.02 recommends that the arizona board of regents approve the gift, contract, academic partnership or research partnership.

(c) The proposed gift, contract, academic partnership or research partnership does not involve a project that receives funding from a federal agency.

(d) The proposed gift, contract, academic partnership or research partnership does not involve any person who is connected with the military or intelligence community of a foreign principal.

24. On or before ________ of each year, submit a report to the speaker of the house of representatives, the president of the senate and the governor, and submit a copy of the report to the secretary of state and post a copy of the report on the board's website, that includes all of the following information for each gift, contract, academic partnership or research partnership that is approved pursuant to paragraph 23 of this subsection during the immediately preceding fiscal year:

(a) the date that the university accepted the gift, executed the contract or entered into an academic partnership or research partnership agreement.

(b) the monetary value of the gift, contract or partnership.

(d) the identity of each person for whose benefit the gift, contract or partnership is offered.

(e) Any conditions, requirements, restrictions or terms that apply to the gift, contract or partnership,

(f) the name and country of residence or domicile of the foreign principal.

(g) the name and mailing address of the university.

(h) the date on which the gift, contract or partnership will terminate, if any.

(i) Whether the university uses or maintains any office, campus or physical location in a designated country as defined in section 15-1635.02.

25. Prohibit each university under the jurisdiction of the Arizona board of regents and all employees of each university from participating in a foreign principal's recruitment programs.

26. Prohibit each university under the jurisdiction of the arizona BOARD of regents from recognizing any student association that does any of the following:

(a) accepts any gift or grant from a foreign principal.

(b) enters into a contract or agreement with a foreign principal.

B. The Arizona board of regents shall adopt personnel policies for all employees of the board and the universities.

C. In conjunction with the auditor general, the Arizona board of regents shall develop a uniform accounting and reporting system, which shall be reviewed by the joint legislative budget committee before final adoption by the board. The board shall require each university to comply with the uniform accounting and reporting system.

D. The Arizona board of regents may employ legal assistance in procuring loans for the institutions from the United States government. Fees or compensation paid for legal assistance pursuant to this subsection shall not be a claim on the state general fund but shall be paid from funds of the institutions.

E. The Arizona board of regents shall approve or disapprove any contract or agreement entered into by the university of Arizona hospital with the Arizona industrial development authority.

F. The Arizona board of regents may adopt policies that authorize the institutions under its jurisdiction to enter into employment contracts with nontenured employees for periods of more than one year but not more than five years. The policies must prescribe limits on the authority of the institutions to enter into employment contracts for periods of more than one year but not more than five years, including the requirement that the board approve the contracts.

G. The Arizona board of regents may adopt a plan or plans for employee benefits that allow participation in a cafeteria plan that meets the requirements of the United States internal revenue code of 1986.

H. The Arizona board of regents may establish a program for the exchange of students between the universities under the jurisdiction of the board and colleges and universities located in the state of Sonora, Mexico. Notwithstanding subsection A, paragraph 5 of this section, the program may provide for in-state tuition at the universities under the jurisdiction of the board for fifty Sonoran students in exchange for similar tuition provisions for up to fifty Arizona students enrolled or seeking enrollment in Sonoran colleges or universities. The board may direct the universities to work in conjunction with the Arizona-Mexico commission to coordinate recruitment and admissions activities.

I. The Arizona board of regents, in collaboration with the universities under the board's jurisdiction, shall adopt a performance funding model using performance metrics that include the increase in degrees awarded, the increase in completed student credit hours and the increase in externally generated research and public service funding. The funding formula may give added weight to degrees related to science, technology, engineering and mathematics and other high-value degrees that are in short supply or that are essential to this state's long-term economic development strategy.

J. The Arizona board of regents shall use the performance funding model adopted pursuant to subsection I of this section in developing and submitting budget requests for the universities under the board's jurisdiction.

K. On or before November 1 of each year, the Arizona board of regents shall submit to the joint legislative budget committee and the governor's office of strategic planning and budgeting a report on university debt and obligations, including:

1. Long-term notes and obligations.

2. Certificates of participation and other obligations pursuant to any lease-purchase agreements.

3. Revenue bonds.

4. Bonds issued pursuant to section 15-1682.03.

5. Commercial paper issued pursuant to section 15-1696.

L. The report submitted pursuant to subsection K of this section must contain, for the most recent fiscal year:

1. The aggregate level of outstanding principal and the principal and interest payments, by type of debt or obligation.

2. An itemization, by campus and project, of the amount of yearly principal and interest to be paid in the most recent and the next five fiscal years.

M. The Arizona board of regents may enter into an intergovernmental agreement pursuant to section 15-1747 to manage universities under the board's jurisdiction subject to the terms of the reciprocity agreement.

N. On or before November 1, 2025 and each year thereafter, the Arizona board of regents shall submit to the joint legislative budget committee each of the following for review:

1. The amount of monies that the board retained from each university under the board's jurisdiction to supplement the board's operating budget.

2. The board's expenditure plan for the current fiscal year for monies that the board retained from each university under the board's jurisdiction.

3. An accounting of how the board spent monies that the board retained from the universities under the board's jurisdiction in the immediately preceding fiscal year.

O. The attorney general shall enforce subsection A, paragraphs 23, 25 and 26 of this section. If the arizona board of regents or a university under the jurisdiction of the arizona board of regents does not comply with the requirements prescribed by subsection A, paragraph 23, 25 or 26 of this section, the attorney general may impose a civil penalty of not more than $10,000 for the first violation and not more than $20,000 for any subsequent violation. If an individual fails to disclose to the university or the Arizona board of regents information about a gift that the individual received from a foreign principal or a contract or partnership that the individual enters into with a foreign principal, the attorney general may impose a civil penalty against that individual of not more than one hundred five percent of the monetary value of the gift, contract or partnership. The Arizona board of regents or a university under the jurisdiction of the arizona board of regents may suspend or terminate the employment of any person who knowingly accepts a gift from a foreign principal or enters into a contract or partnership with a foreign principal without approval pursuant to subsection A, paragraph 23 of this section or who violates the requirements prescribed by subsection A, paragraph 25 of this section.

O. P. For the purposes of this section: ,

1. "Foreign principal" has the same meaning prescribed in section 15-1635.02.

2. "University debt and obligations" means debt and obligations, the principal and interest of which are paid in whole or in part with university monies. END_STATUTE

Sec. 2. Title 15, chapter 13, article 2, Arizona Revised Statutes, is amended by adding section 15-1635.02, to read:

START_STATUTE15-1635.02. Research security council; members; powers and duties; annual report; definitions

A. The higher education research security council is established within the Arizona board of regents to promote secure academic research in this state and to mitigate the risks of foreign espionage and interference. The council is composed of the president of the senate, the speaker of the house of representatives, the governor and the executive director of the Arizona board of regents, or their designees, and the following members:

1. A research security officer who is employed by northern Arizona university and appointed by _______.

2. A research security officer who is employed by Arizona state university and appointed by _______.

3. A research security officer who is employed by the university of Arizona and appointed by _______.

B. Each Appointed member serves at the pleasure of the person who appointed that member. Members of the council are not eligible to receive compensation but are eligible for reimbursement of expenses pursuant to title 38, chapter 4, article 2. The Arizona board of regents shall provide office and meeting space and administrative support to the council.

C. The higher education research security council shall:

1. Elect a chairperson from among the council's members.

2. Meet at least once each _______. The chairperson may call additional meetings and shall call a meeting on the request of a majority of the members.

3. Recommend to the board research security policies for the universities under the jurisdiction of the board.

4. Devel0p and provide a training program for research security officers that includes background checks on researchers, academic history checks on researchers, research security and integrity tools and software that prevents the loss of intellectual capital.

5. Recommend to the board whether to approve or disapprove a gift from a foreign principal to a university under the jurisdiction of the board or a proposed contract, academic partnership or research partnership between a foreign principal and a university under the jurisdiction of the board. The council may recommend approval of a proposed partnership only if all of the following apply:

(a) The partnership will comply with all federal laws and REQUIREMENTS.

(b) The university will provide annual training on conflict of interest and conflicts of commitment to all personnel who are involved in the partnership.

(d) The council is not able to identify an alternative institution with which the university may engage to achieve a similar result.

(e) The university has a formalized foreign visitor process and uniform VISITING scholar agreement.

6. On or before December 1 of each even-numbered YEAR, submit a report to the governor, the attorney general and the chairpersons of senate and the house of representatives education committees, or their successor committees, and submit a copy of the report to the secretary of state. The report must include an overview of the status of research security at universities under the jurisdiction of the Arizona board of regents, and any legislative recommendations.

D. For the purposes of this section:

1. "Designated country" means a country that is identified by the United States director of national intelligence as a country that poses a risk to the national security of the United States in each of the three most recent annual threat assessments of the United States intelligence community issued pursuant to section 108b of the national security act of 1947 (50 United States Code section 3043b).

2. "Foreign principal":

(a) means any of the following:

(i) The government or any official of the government from a designated country.

(ii) A political party or member of a political party from a designated country.

(iii) Any individual who is domiciled in a designated country and who is not a citizen or lawful permanent resident of the United States.

(iv) Any business or other entity that is domiciled in a designated country.

(v) Any business or other entity that has a majority owner that is domiciled in a designated country.

(vi) Any business or other entity in which the majority of the board of directors is controlled by an entity that is domiciled in a designated country.

(b) Includes any person acting as an intermediary on behalf of a person listed in subdivision (a) of this paragraph.

3. "Gift" includes any payment or subsidy for costs incurred by a researcher or an employee of a university under the jurisdiction of the Arizona board of regents for travel to a designated country in the researcher's or employee's official capacity. END_STATUTE

Sec. 3. Arizona board of regents; report; review; delayed repeal

A. Not later than ninety days after the effective date of this act, the Arizona board of regents shall submit a report to the speaker of the house of representatives, the president of the senate and the governor, and submit a copy of the report to the secretary of state and post a copy of the report on the board's website, that includes all of the information required by section 15-1626, subsection A, paragraph 24, Arizona Revised Statutes, as added by this act, for:

1. Each gift that a university under the jurisdiction of the Arizona board of regents received from a foreign principal as defined in section 15-1635.02, Arizona Revised Statutes, as added by this act, between December 31, 2019 and the effective date of this act.

2. Each contract, academic partnership or research partnership between a foreign principal and a university under the jurisdiction of the Arizona board of regents that was in effect at any time between December 31, 2019 and the effective date of this act.

B. The Arizona board of regents shall review all products and services that are used by the board and each university under the jurisdiction of the board to identify any product or service that is provided by a foreign principal as defined in section 15-1635.02, Arizona Revised Statutes, as added by this act. The Arizona board of regents shall develop and implement a plan to eliminate the use of any product or service that is identified as a product or service provided by a foreign principal pursuant to this subsection as soon as is practicable.

C. This section is repealed from and after December 31, 2027.

Sec. 4. Short title

This act may be cited as the "Research and Education Protection Act of 2026".