ESAs; micro-schools; tutors; safety; rules.

HB2580 - 572R - I Ver

REFERENCE TITLE:
ESAs; micro-schools; tutors; safety; rules.

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 2580

Introduced by

Representatives
Simacek: Abeytia, Aguilar, Blattman, Cavero, Connolly, Contreras P, Crews,
Garcia, Gutierrez, M�rquez, Sandoval, Stahl Hamilton, Travers, Villegas, Volk

AN
ACT

amending sections 15-2401, 15-2402,
15-2403, 15-2404 and 15-2405, Arizona Revised Statutes; relating to Arizona
empowerment scholarship accounts.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Section 15-2401, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-2401.

Definitions

In this chapter, unless the context otherwise requires:

1. "Annual education plan" means an
initial individualized evaluation and subsequent annual reviews that are
developed for a qualified student who meets the criteria specified in paragraph

7
8
, subdivision (a), item
(i), (ii) or (iii) of this section to determine ongoing annual eligibility
through the school year in which the qualified student reaches twenty-two
years of age and whether the student may be eligible pursuant to
section
36-2981

title 36, chapter 29, article 4
and
should be referred for eligibility determination.

2. "Curriculum" means a course of study
for content areas or grade levels, including any supplemental materials
required or recommended by the curriculum, approved by the department.

3. "Department" means the department of
education.

4. "Eligible postsecondary institution"
means a community college as defined in section 15-1401, a university
under the jurisdiction of the Arizona board of regents or an accredited private
postsecondary institution.

5. "Micro-school":

(
a
) means any
person that both:

(
i
) Charges
tuition or fees to one or more qualified students.

(
ii
) Employs,
including employment through a third-party contractor, one or more individuals
to provide instruction in the subjects described in section 15-2402, subsection
B, paragraph 1.

(
b
) Does not
include a public school, private school or qualified school.

5.

6.
"Parent"
means a resident of this state who is the parent, stepparent or legal guardian
of a qualified student.

6.

7.
"Qualified
school" means a nongovernmental primary or secondary school or a preschool
for pupils with disabilities that is located in this state or, for qualified
students who reside within the boundaries of an Indian reservation in this
state, that is located in an adjacent state and that is within two miles of the
border of the state in which the qualified student resides, and that does not
discriminate on the basis of race, color or national origin.

7.

8.
"Qualified
student" means a resident of this state who:

(a) Is any of the following:

(i) Identified as having a disability under section
504 of the rehabilitation act of 1973 (29 United States Code section 794).

(ii) Identified by a
school district or by an independent third party pursuant to section 15-2403,
subsection J as a child with a disability as defined in section 15-731 or
15-761.

(iii) A child with a
disability who is eligible to receive services from a school district under
section 15-763.

(iv) Attending a school or
school district that was assigned a letter grade of D or F pursuant to section
15-241 for the most recent year in which letter grades were assigned or
is currently eligible to attend kindergarten and resides within the attendance
boundary of a school that was assigned a letter grade of D or F pursuant to
section 15-241 for the most recent year in which letter grades were
assigned.� A child who meets the requirements of this item and who meets the
income eligibility requirements for free and reduced-price lunches under
the national school lunch and child nutrition acts (42 United States Code
sections 1751 through 1793) is not subject to subdivision (b) of this
paragraph.

(v) A previous recipient of a scholarship issued
pursuant to this section, unless the qualified student's parent has been
removed from eligibility in the program for failure to comply pursuant to
section 15-2403, subsection C.

(vi) A child of a parent who is a member of the
armed forces of the United States and who is on active duty or was killed in
the line of duty.� A child who meets the requirements of this item is not
subject to subdivision (b) of this paragraph.

(vii) A child who is a ward of the juvenile court
and who is residing with a prospective permanent placement pursuant to section
8-862 and the case plan is adoption or permanent guardianship.

(viii) A child who was a ward of the juvenile court
and who achieved permanency through adoption or permanent guardianship.

(ix) A child who is the sibling of a current or
previous Arizona empowerment scholarship account recipient or of an eligible
qualified student who accepts the terms of and enrolls in an Arizona
empowerment scholarship account.

(x) A child who resides within the boundaries of an
Indian reservation in this state as determined by the department of education
or a tribal government.

(xi) A child of a parent who is legally blind or
deaf or hard of hearing as defined in section 36-1941.

(b) And, except as provided in subdivision (a),
items (iv) and (vi) of this paragraph, who meets any of the following
requirements:

(i) Attended a governmental primary or secondary
school as a full-time student as defined in section 15-901 for at
least forty-five days of the current or prior fiscal year and who
transferred from a governmental primary or secondary school under a contract to
participate in an Arizona empowerment scholarship account.� Kindergarten
students who are enrolled in Arizona online instruction must receive one
hundred hours of logged instruction to be eligible pursuant to this
item. First, second and third grade students who are enrolled in
Arizona online instruction must receive two hundred hours of logged instruction
to be eligible pursuant to this item.� Fourth, fifth and sixth grade students
who are enrolled in Arizona online instruction must receive two hundred fifty
hours of logged instruction to be eligible pursuant to this
item. Seventh and eighth grade students who are enrolled in Arizona
online instruction must receive two hundred seventy-five hours of logged
instruction to be eligible pursuant to this item.� High school students who are
enrolled in Arizona online instruction must receive two hundred fifty hours of
logged instruction to be eligible pursuant to this item.

(ii) Previously participated in an Arizona
empowerment scholarship account.

(iii) Received a scholarship under section 43-1505
and who continues to attend a qualified school if the student attended a
governmental primary or secondary school as a full-time student as
defined in section 15-901 for at least ninety days of the prior fiscal
year or one full semester before attending a qualified school.

(iv) Was eligible for an Arizona scholarship for
pupils with disabilities and received monies from a school tuition organization
pursuant to section 43-1505 or received an Arizona scholarship for pupils
with disabilities but did not receive monies from a school tuition organization
pursuant to section 43-1505 and who continues to attend a qualified
school if the student attended a governmental primary or secondary school as a
full-time student as defined in section 15-901 for at least ninety
days of the prior fiscal year or one full semester before attending a qualified
school.

(v) Attended a nonpublic school for pupils with
disabilities in the prior year if placement at the school was approved by the
department of education and contracted for by a public school district.

(vi) Has not previously attended a governmental
primary or secondary school but is currently eligible to enroll in a
kindergarten program in a school district or charter school in this state or
attended a program for preschool children with disabilities. For the
purposes of this item, a child is eligible to enroll in a kindergarten program
if the child is at least five years of age on January 1 of the current school
year, is under seven years of age, has not already completed a kindergarten
program and is not enrolled in grade one of a private or governmental school in
the current year.

(vii) Has not previously attended a governmental
primary or secondary school but is currently eligible to enroll in a program
for preschool children with disabilities in this state.

8.

9.
"Treasurer"
means the office of the state treasurer.
END_STATUTE

Sec. 2. Section 15-2402, Arizona Revised Statutes, is amended to read:

START_STATUTE
15-2402.

Arizona empowerment scholarship accounts; funds

A. Arizona empowerment scholarship accounts are
established to provide options for the education of students in this state.

B. To enroll a qualified student for an Arizona
empowerment scholarship account, the parent of the qualified student must sign
an agreement to do all of the following:

1. Use a portion of the Arizona empowerment
scholarship account monies allocated annually to provide an education for the
qualified student in at least the subjects of reading, grammar, mathematics,
social studies and science, unless the Arizona empowerment scholarship account
is allocated monies according to a transfer schedule other than quarterly
transfers pursuant to section 15-2403, subsection G.

2. Not enroll the qualified student in a school
district or charter school and release the school district from all obligations
to educate the qualified student.� This paragraph does not:

(a) Relieve the school district or charter school
that the qualified student previously attended from the obligation to conduct
an evaluation pursuant to section 15-766.

(b) Require the qualified student to withdraw from
a
any
school district or charter
school before enrolling for an Arizona empowerment scholarship account if the
qualified student withdraws from the school district or charter school before
receiving any monies in the qualified student's Arizona empowerment scholarship
account.

(c) Prevent the qualified student from applying in
advance for an Arizona empowerment scholarship account to be funded beginning
the following school year, subject to section 15-2403, subsection H.

3. Not accept a scholarship from a school tuition
organization pursuant to title 43 concurrently with an Arizona empowerment
scholarship account for the qualified student in the same year a parent signs
the agreement pursuant to this section.

4. Use monies deposited in the qualified student's
Arizona empowerment scholarship account only for the following expenses of the
qualified student:

(a) Tuition or fees at a qualified school
or micro-school
that requires all teaching staff and
school
personnel who have
unsupervised

contact with students
that is not supervised as defined in
section 15-505
to
meet all of the following
requirements as a condition of employment:

(
i
)
Be
fingerprinted.

(
ii
) Be at
least eighteen YEARS of age.

(
iii
) Not be
the subject of a disciplinary action by the state board of education for
immoral or unprofessional conduct pursuant to section 15-505 or 15-534.04.

(b) Textbooks required by a qualified school
or micro-school
.

(c) If the qualified student meets any of the
criteria specified in section 15-2401, paragraph
7
8
, subdivision (a), item (i), (ii) or (iii) as determined by a
school district or by an independent third party pursuant to section 15-2403,
subsection J, the qualified student may use the following additional services:

(i) Educational therapies from a licensed or
accredited practitioner or provider, including and up to any amount not covered
by insurance if the expense is partially paid by a health insurance policy for
the qualified student.

(ii) A licensed or accredited paraprofessional or
educational aide.

(iii) Tuition for vocational and life skills
education approved by the department.

(iv) Associated goods and services that include
educational and psychological evaluations, assistive technology rentals and
braille translation goods and services approved by the department.

(d) Tutoring or teaching services provided by an
individual who is
fingerprinted, at least eighteen years of age
and
not subject to disciplinary action by the state board of education
for immoral or unprofessional conduct pursuant to section 15-505 or 15-534.04
or a facility that is accredited by a state, regional or national accrediting
organization
and that requires all teaching staff and personnel
who have contact with students that is not supervised as defined in section
15-505 to be fingerprinted, at least eighteen years of age and not subject to
disciplinary action by the state board of education for immoral or
unprofessional conduct pursuant to section 15-505 or 15-534.04
. The
department shall ensure
that
any individual who provides
tutoring or teaching services to one or more qualified students pursuant to
this subdivision is not subject to disciplinary action by the state board of
education.� The department shall also remove any individual who is subject to
disciplinary action by the state board of education from all platforms that the
department provides to parents and qualified students for the purchase of goods
or educational services using account monies.

(e) Curricula and supplementary materials.

(f) Tuition or fees for a nonpublic online learning
program.

(g) Fees for a nationally standardized norm-referenced
achievement test, an advanced placement examination or any exams related to
college or university admission.

(h) Tuition or fees at an eligible postsecondary
institution.

(i) Textbooks required by an eligible postsecondary
institution.

(j) Fees to manage the Arizona empowerment
scholarship account.

(k) Services provided by a public school, including
individual classes and extracurricular programs.

(l) Insurance or surety bond payments.

(m) Uniforms purchased from or through a qualified
school.

(n) If the qualified student meets the criteria
specified in section 15-2401, paragraph
7
8
, subdivision (a), item (i), (ii) or (iii) and if the
qualified student is in the second year prior to the final year of a contract
executed pursuant to this article, costs associated with an annual education
plan conducted by an independent evaluation team. The department
shall prescribe minimum qualifications for independent evaluation teams
pursuant to this subdivision and factors that teams must use to determine
whether the qualified student shall be eligible to continue to receive monies
pursuant to this article through the school year in which the qualified student
reaches twenty-two years of age. An independent evaluation
team that provides an annual education plan pursuant to this subdivision shall
submit a written report that summarizes the results of the evaluation to the
parent of the qualified student and to the department on or before July
31. The written report submitted by the independent evaluation team
is valid for one year. If the department determines that the
qualified student meets the eligibility criteria prescribed in the annual
education plan, the qualified student is eligible to continue to receive monies
pursuant to this article until the qualified student reaches twenty-two
years of age, subject to annual review. A parent may appeal the
department's decision pursuant to title 41, chapter 6, article
10. As an addendum to a qualified student's final-year
contract, the department shall provide the following written information to the
parent of the qualified student:

(i) That the qualified student will not be eligible
to continue to receive monies pursuant to this article unless the results of an
annual education plan conducted pursuant to this subdivision demonstrate that
the qualified student meets the eligibility criteria prescribed in the annual
education plan.

(ii) That the parent is entitled to obtain an annual
education plan pursuant to this subdivision to determine whether the qualified
student meets the eligibility criteria prescribed in the annual education plan.

(iii) A list of independent evaluation teams that
meet the minimum qualifications prescribed by the department pursuant to this
subdivision.

(o) Public transportation services in this state,
including a commuter pass for the qualified student, or transportation network
services as defined in section 28-9551 between the qualified student's
residence and a qualified school
or micro-school
in which
the qualified student is enrolled.

(p) Computer hardware and technological devices
primarily used for an educational purpose. For the purposes of this
subdivision, "computer hardware and technological devices":

(i) Includes calculators, personal computers,
laptops, tablet devices, microscopes, telescopes and printers.

(ii) Does not include entertainment and other
primarily noneducational devices, including televisions, telephones, video game
consoles and accessories, and home theatre and audio equipment.

5. Not file an affidavit of intent to homeschool
pursuant to section 15-802, subsection B, paragraph 2 or 3.

6. Not use monies deposited in the qualified
student's account for any of the following:

(a) Computer hardware or other technological
devices, except as otherwise allowed under paragraph 4, subdivision (c) or (p)
of this subsection.

(b) Transportation of the pupil, except for
transportation services described in paragraph 4, subdivision (o) of this
subsection.

C. In exchange for the parent's agreement pursuant
to subsection B of this section, the department shall transfer from the monies
that would otherwise be allocated to a recipient's prior school district, or if
the child is currently eligible to attend a preschool program for children with
disabilities, a kindergarten program or any of grades one through twelve, the
monies that the department determines would otherwise be allocated to a
recipient's expected school district of attendance, to the treasurer for
deposit into an Arizona empowerment scholarship account an amount that is
equivalent to ninety percent of the sum of the base support level and
additional assistance prescribed in sections 15-185 and 15-943 for
that particular student if that student were attending a charter school.

D. The department of education empowerment
scholarship account fund is established consisting of monies appropriated by
the legislature. The department shall administer the
fund. Monies in the fund are subject to legislative
appropriation. Monies in the fund shall be used for the department's
costs in administering Arizona empowerment scholarship accounts under this
chapter. Monies in the fund are exempt from the provisions of
section 35-190 relating to lapsing of appropriations. If the
number of Arizona empowerment scholarship accounts significantly increases
after fiscal year 2020-2021, the department may request an increase in
the amount appropriated to the fund in any subsequent fiscal year in the budget
estimate submitted pursuant to section 35-113. The department
shall list monies in the fund as a separate line item in its budget estimate.

E. The state treasurer empowerment scholarship
account fund is established consisting of monies appropriated by the
legislature. The state treasurer shall administer the fund.� Monies
in the fund shall be used for the state treasurer's costs in administering the
Arizona empowerment scholarship accounts under this chapter. If the
number of Arizona empowerment scholarship accounts significantly increases
after fiscal year 2020-2021, the state treasurer may request an increase
in the amount appropriated to the fund in any subsequent fiscal year in the
budget estimate submitted pursuant to section 35-113. Monies
in the fund are subject to legislative appropriation.� Monies in the fund are
exempt from the provisions of section 35-190 relating to lapsing of
appropriations. The state treasurer shall list monies in the fund as
a separate line item in its budget estimate.

F. A parent must renew the qualified student's
Arizona empowerment scholarship account on an annual basis. The
department of education shall verify that the parent's child is a qualified
student as defined in section 15-2401 or 15-2401.01 in the year for
which the parent seeks to renew the Arizona empowerment scholarship account.� This
subsection does not require the department to annually verify the child's
disability for the purpose of section 15-2401, paragraph
7
8
, subdivision (a), item (i), (ii) or (iii), if applicable.

G. Notwithstanding any changes to the student's
multidisciplinary evaluation team plan, a student who has previously qualified
for an Arizona empowerment scholarship account remains eligible to apply for
renewal until the student finishes high school.

H. If a parent does not renew the qualified
student's Arizona empowerment scholarship account for a period of three
academic years, the department shall notify the parent that the qualified
student's account will be closed in sixty calendar days. The
notification must be sent
through
by

certified mail, email and telephone, if applicable.� The parent has sixty
calendar days to renew the qualified student's Arizona empowerment scholarship
account. If the parent chooses not to renew or does not respond
in
within
sixty calendar days, the
department shall close the account and any remaining monies shall be returned
to
the
this
state.

I. A signed agreement under this section constitutes
school attendance required by section 15-802.

J. A qualified school
, a micro-school

or a provider of services purchased pursuant to subsection B, paragraph 4 of
this section may not share, refund or rebate any Arizona empowerment
scholarship account monies with the parent or qualified student in any manner.
� A micro-school may not do either of the following:

1. Allow any employee of the micro-school
to provide instruction, tutoring or teaching services to a qualified student if
all of the following apply:

(
a
) The
employee is providing instruction, tutoring or teaching services in the
employee's official capacity.

(
b
) The
employee is a member of the family as defined in section 15-1871 of the
qualified student's parent.

(
c
) The
micro-school charges the qualified student for tuition or fees.

2. Charge tuition or fees to a
qualified student if the micro-school is owned or controlled by a member
of the family as defined in section 15-1871 of the qualified student's
parent.�

K. Notwithstanding subsection H of this section, on
the qualified student's graduation from a postsecondary institution or after
any period of four consecutive years after high school graduation in which the
student is not enrolled in an eligible postsecondary institution, but not
before this time as long as the account holder continues using a portion of
account monies for allowable expenses each year and is in good standing, the
qualified student's Arizona empowerment scholarship account shall be closed and
any remaining monies shall be returned to the state.

L. Monies received pursuant to this article do not
constitute taxable income to the parent of the qualified student.
END_STATUTE

Sec. 3. Section 15-2403, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-2403.

Arizona empowerment scholarship accounts; administration;
appeals; risk-based audits; rules; policy handbook

A. The treasurer may contract with private financial
management firms to manage Arizona empowerment scholarship accounts.

B. The department shall conduct or contract for
annual audits of Arizona empowerment scholarship accounts to ensure compliance
with section 15-2402, subsection B, paragraph 4. The
department shall also conduct or contract for random, quarterly and annual
audits of Arizona empowerment scholarship accounts as needed to ensure
compliance with section 15-2402, subsection B,
paragraph 4. The department, in consultation with the office of
the auditor general, shall develop risk-based auditing procedures for
audits conducted pursuant to this subsection.

C. The department shall annually review a sample of
Arizona empowerment scholarship accounts, selected at random, to determine
whether the parent or qualified student is in compliance with the terms of the
contract, applicable laws, rules and orders relating to the Arizona empowerment
scholarship accounts program. The Arizona empowerment scholarship
account of a parent or qualified student who is in good standing may be
randomly selected pursuant to this subsection only one time during any five-year
period. The department may remove any parent or qualified student
from eligibility for an Arizona empowerment scholarship account if the parent
or qualified student fails to comply with the terms of the contract or
applicable laws, rules or orders or knowingly misuses monies or knowingly fails
to comply with the terms of the contract with intent to defraud and shall
notify the treasurer. The department shall notify the treasurer to
suspend the account of a parent or qualified student and shall notify the parent
or qualified student in writing that the account has been suspended and that no
further transactions will be allowed or disbursements made. The
notification shall specify the reason for the suspension and state that the
parent or qualified student has fifteen days, not including weekends, to
respond and take corrective action. If the parent or qualified
student refuses or fails to contact the department, furnish any information or
make any report that may be required for reinstatement within the fifteen-day
period, the department may remove the parent or qualified student pursuant to
this subsection.

D. A parent may appeal to the state board of
education any administrative decision the department makes pursuant to this
article, including determinations of allowable expenses, removal from the
program or enrollment eligibility. The department shall notify the
parent in writing that the parent may appeal any administrative decision under
this article and the process by which the parent may appeal at the same time
the department notifies the parent of an administrative decision under this
article. The state board of education shall establish an appeals
process, and the department shall post this information on the department's
website in the same location as the policy handbook developed pursuant to
subsection K of this section.

E. A parent may represent himself or herself or
designate a representative, not necessarily an attorney, before any appeals
hearing held pursuant to this section. Any designated representative
who is not an attorney admitted to practice may not charge for any services
rendered in connection with the hearing. The fact that a
representative participated in the hearing or assisted the account holder is
not grounds for reversing any administrative decision or order if the evidence
supporting the decision or order is substantial, reliable and probative.

F. The state board of education may refer cases of
substantial misuse of monies to the attorney general for the purpose of
collection or for the purpose of a criminal investigation if the state board of
education obtains evidence of fraudulent use of an account.

G. The department shall make quarterly transfers of
the amount calculated pursuant to section 15-2402, subsection C to the
treasurer for deposit in the Arizona empowerment scholarship account of each
qualified student, except the department may make transfers according to
another transfer schedule if the department determines a transfer schedule other
than quarterly transfers is necessary to operate the Arizona empowerment
scholarship account.

H. The department shall accept applications between
July 1 and June 30 of each year. The department shall issue an award
letter to eligible applicants within thirty days after receipt of a completed
application and all required documentation. If an eligible applicant
completes an application in advance for an Arizona empowerment scholarship
account to be funded beginning on a later date, the department may enroll the
eligible applicant on the later date, except that the department may not enroll
the applicant more than two fiscal quarters after the fiscal quarter in which
the application is completed or on a date that is after March 31 and before
July 1. If an eligible applicant completes an application after
March 31 and before July 1, the department shall enroll the applicant on or
after July 1. The department shall enroll all other eligible
applicants when the department issues an award letter pursuant to this
subsection. This subsection does not allow a qualified student to
receive monies in an Arizona empowerment scholarship account while the
qualified student is enrolled in a school district or charter school.� On or
before September 1 and November 1 of each year, the department shall furnish to
the joint legislative budget committee and the governor's office of strategic
planning and budgeting an estimate of the amount required to fund Arizona
empowerment scholarship accounts for the following fiscal year. The
department shall include in its budget request for the following fiscal year
the amount estimated pursuant to section 15-2402, subsection C for each
qualified student.

I. The state board of education
:

1.
May adopt rules and
policies necessary to administer Arizona empowerment scholarship accounts,
including rules and policies:

1.

(
a
)
For establishing an appeals process pursuant to
subsection D of this section.

2.

(
b
)
For conducting or contracting for examinations of
the use of account monies, consistent with subsection L of this section.

3.

(
c
)
For conducting or contracting for random,
quarterly and annual reviews of accounts.

4.

(
d
)
For establishing or contracting for the
establishment of an online anonymous fraud reporting service.

5.

(
e
)
For establishing an anonymous telephone hotline
for fraud reporting.

6.

(
f
)
That require a surety bond or insurance for
account holders.

(
g
) That
promote financial transparency for qualified schools and micro-schools.

(
h
) That are
necessary to ensure that each parent of a qualified student uses monies
deposited in the qualified student's Arizona empowerment scholarship account
only for qualified schools, micro-schools and tutoring or teaching services
providers that comply with the personnel requirements prescribed by section
15-2402, subsection B, paragraph 4, subdivision (
a
) or (
d
) or section 15-2402, subsection J.

2. Shall adopt rules relating to
safety, including rules that require qualified schools and micr0-schools to do
all of the following:

(
a
) Comply with
all applicable fire codes, safety codes and food safety and sanitation laws.

(
b
) Conduct a
fingerprint check and background check on all teaching staff and school
personnel who have contact with students that is not supervised as defined in
section 15-505.

(
c
) Secure any
heavy machinery, tools or weapons that are located on the premises.

(
d
) Install and
maintain an enclosure around A swimming pool or other contained body of water,
as prescribed by section 36-1681, subsection A.

(
e
) Prohibit
all individuals who have access to the premises from possessing illegal drugs
or alcohol on the premises.

J. The department shall contract with an independent
third party for the purposes of determining whether a qualified student is
eligible to receive educational therapies or services pursuant to section 15-2402,
subsection B, paragraph 4, subdivision (c).� If during any period on or after
January 1, 2023 the department fails to ensure that a contract with an
independent third party is in effect, during that period:

1. The county school superintendent of each county
may approve a list of independent third parties within the county whose
evaluation may be used to determine whether a qualified student who resides
within the county is eligible to receive educational therapies or services
pursuant to section 15-2402, subsection B, paragraph 4, subdivision (c).

2. If the county school superintendent of a county
does not provide a list of approved independent third parties within ninety
days after the beginning of any period during which the department does not
have a contract with an independent third party in effect as described in this
subsection, the parent of a qualified student who resides within the county has
the right to obtain an independent educational evaluation from a qualified
examiner to determine whether the qualified student is eligible to receive
educational therapies or services pursuant to section 15-2402,
subsection B, paragraph 4, subdivision (c). The expense for an
educational evaluation undertaken pursuant to this paragraph shall be provided
by the school district within which the qualified student resides and that
serves the grade level of the qualified student. For the purposes of
this paragraph, "qualified examiner" means a licensed physician,
psychiatrist or psychologist.

K. On or before July 1 of each year, the department
shall develop an applicant and participant handbook that includes information
relating to policies and processes of Arizona empowerment scholarship
accounts.� The policy handbook shall comply with the rules adopted by the state
board of education pursuant to this section. The department shall
post the handbook on the department's website.

L. The department shall:

1. Establish and maintain an online database of
allowable and disallowed categories of expenses and provide a link to the
database on the department's website.

2. Allow the use of account monies to reimburse the
parent of a qualified student or a qualified student for the purchase of a good
or educational service that is an allowable expense pursuant to section 15-2402,
subsection B.

M. Except for cases in which the attorney general
determines that a parent or account holder has committed fraud, any expenditure
from an Arizona empowerment scholarship account for a purchase that the
department determines is not an allowable expense pursuant to section 15-2402
and that is subsequently repaid by the parent or account holder shall be
credited back to the Arizona empowerment scholarship account balance within
thirty days after the receipt of payment.

N. If, in response to an appeal of an administrative
decision made by the department, the state board of education issues a stay of
an Arizona empowerment scholarship account suspension pursuant to rules adopted
by the board, the department may not withhold funding or contract renewal for
the account holder because of the appealed administrative decision during the
stay unless directed by the board to do so.
END_STATUTE

Sec. 4. Section 15-2404, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-2404.

State control over nonpublic schools; prohibition; application

A.
Except as provided in section
15-2403,
this chapter does not
permit

allow
any government agency to exercise control or supervision
over any nonpublic school or homeschool.

B. A qualified school that accepts a payment from a
parent pursuant to this chapter is not an agent of the state or federal
government.

C. A qualified school shall not be required to alter
its creed, practices, admissions policy or curriculum in order to accept
students whose parents pay tuition or fees from an
arizona
empowerment
scholarship account pursuant to this chapter in order to participate as a
qualified school.

D. In any legal proceeding challenging
the application of this chapter to a qualified school, the state bears the
burden of establishing that the law is necessary and does not impose any undue
burden on qualified schools.

END_STATUTE

Sec. 5. Section 15-2405, Arizona Revised
Statutes, is amended to read:

START_STATUTE
15-2405.

Arizona empowerment scholarship accounts parent oversight
committee; membership; duties

A. The Arizona empowerment scholarship accounts
parent oversight committee is established consisting of six members who are
parents of qualified students who receive Arizona empowerment scholarship
account monies under this chapter.� The members shall be appointed as follows:

1. One member who is appointed by the president of
the senate.

2. One member who is appointed by the speaker of the
house of representatives.

3. One member who is appointed by the minority
leader of the senate.

4. One member who is appointed by the minority
leader of the house of representatives.

5. Two members who are appointed by the governor.

B. At a minimum, the members appointed pursuant to
subsection A, paragraphs 1, 2, 3 and 4 of this section shall be parents of
qualified students who both:

1. Meet any of the criteria specified in section 15-2401,
paragraph
7
8
, subdivision
(a), item (i), (ii) or (iii) as determined by an independent third party
pursuant to section 15-2403, subsection
I
j
.

2. Use monies deposited in the qualified student's
Arizona empowerment scholarship account for expenses as prescribed in section
15-2402, subsection B, paragraph 4, subdivision (c).

C. The members of the committee shall annually elect
a chairperson from among its members.

D. The committee shall meet at least once each
calendar quarter. A majority of the membership constitutes a quorum for the
transaction of business.

E. The committee shall collaborate and interact with
the department, the state board of education, the attorney general and, as
appropriate, the auditor general to review all of the following:

1. The implementation of policies and procedures
relating to the Arizona empowerment scholarship account program under this
chapter and the program's effectiveness.

2. The concerns of parents of qualified students who
receive Arizona empowerment scholarship account monies under this chapter.

3. The work of the ombudsman-citizens aide on
complaints associated with administering the Arizona empowerment scholarship
account program.

F. A parent may not serve on the committee if any of
the following applies:

1. The parent is an employee or the relative of an
employee of the department.

2. The parent receives monies or compensation from
or is otherwise associated in any manner with a lobbyist organization, a school
choice advocacy group or a private financial management firm that manages
Arizona empowerment scholarship accounts pursuant to section 15-2403,
subsection A.

3. The parent provides goods or services to
qualified students that are purchased pursuant to section 15-2402,
subsection B, paragraph 4.
END_STATUTE