department of economic security; continuation

HB2728 - 572R - H Ver

House Engrossed

department
of economic security; continuation

(now:� DES; benefits
administration; continuation)

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HOUSE BILL 2728

AN
ACT

Amending sections 23-634.01, 23-762,
23-763, 23-771, 23-773 and 23-776, Arizona revised statutes; Amending
title 36, chapter 4, article 1, Arizona revised statutes, by adding section
36-407.04; amending title 36, chapter 29, article 1, Arizona revised statutes,
by adding sections 36-2903.18 and 36-2903.19; amending section 41-708, Arizona
revised statutes; amending title 41, chapter 4, article 1, Arizona revised
statutes, by adding section 41-710.04; repealing section 41-3026.21, Arizona
revised statutes; amending title 41, chapter 27, article 2, Arizona revised
statutes, by adding section 41-3030.27; amending title 46, chapter 2, article
2, Arizona revised statutes, by adding sections 46-232, 46-233, 46-234,
46-235 and 46-236, Arizona revised statutes; repealing section 46-236,
Arizona revised statutes; amending section 46-297.01, Arizona revised statutes;
relating to the administration of public benefits.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

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

START_STATUTE
23-634.01.

Denial of benefits for failure to accept suitable work or
actively seek work; definition

A. Notwithstanding section 23-776, an
individual who is found by the department, with respect to any week in an
eligibility period
which

that
begins
from and after April 4, 1981, to have failed to apply for or accept available
suitable work to which
he

the individual
was
referred by the department or to have failed to actively engage in seeking work
is disqualified from receiving extended benefits. The
disqualification shall begin with the week in which the failure occurred and
continue until the individual has been employed in each of four subsequent
weeks, whether or not consecutive, and has earned remuneration equal to
not less than

at least
four times
his

the individual's
weekly benefit
amount.

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

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

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

C. If an individual furnishes evidence satisfactory
to the department that prospects for obtaining work in
his

the individual's
customary occupation within a reasonably
short period are good, the determination of whether any work is suitable with
respect to the individual shall be made in accordance with
the
provisions of
section 23-776 without reference to the definition
contained in this section.

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

E
.

E. For the purposes of this section, an individual
shall be treated as actively engaged in seeking work during any week if the
department finds from tangible evidence provided by the individual that
he

the individual
has engaged in a
systematic and sustained effort to obtain work during such week.

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

that
is suitable work.

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

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

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

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

(b) The state or local minimum wage.
END_STATUTE

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

START_STATUTE
23-762.

Requirements of shared work plan; approval

A. An employer
wishing

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

1. Specifies the employees in the affected group.

2. Applies to only one affected group.

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

workweek
is to be reduced.

4. Includes a certified statement by the employer
that, for the six-month period immediately preceding the date the plan is
submitted, compensation was payable from the shared work employer, or its
predecessors whether or not they were shared work employers, to each employee
in the affected group in an amount equal to or greater than the wages for
insured work in one calendar quarter as provided in section 23-771,
subsection A, paragraph
6

7
. An
employee who joins an affected group after the approval of the shared work plan
is automatically covered under the previously approved plan, effective the week
that the department receives written notice from the shared work employer that
the employee has joined and certification from the employer that the employee
meets the provisions of section 23-771, subsection A, paragraph
6

7
.

5. Includes a certified statement by the employer
that for the duration of the plan the reduction in the total normal weekly
hours of work of the employees in the affected group is instead of layoffs
which

that
otherwise would result in at
least as large a reduction in the total normal weekly hours of
work. The employer shall include an estimate of the number of
layoffs that would have occurred without an approved shared work plan.

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

7. Specifies an expiration date that is
no

not
more than one
year
from

after

the date the employer submits the plan for approval, except that on written
request by the employer, the department may approve an extension of the plan
for a period of not more than one year
from

after
the date of the request.

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

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

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

after
the determination.
END_STATUTE

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

START_STATUTE
23-763.

Shared work benefits; eligibility; requirements

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

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

2. The individual's normal weekly hours of work were
reduced at least ten
per cent

percent
but not more than forty
per cent

percent
.

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

and

4
and 5
.

B. Eligible individuals may participate in training
to enhance job skills, including
employer sponsored

employer-sponsored
training or
worker training funded under the workforce investment act of 1998, if the
training is approved by the department.

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

percent
.

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

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

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

START_STATUTE
23-771.
Eligibility for benefits

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

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

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

3. Is able to work.

4. Is available for work.

4.

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

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

(b) The individual has made at least
one job contact per day on four different days of the week.

actively seeks and applies for suitable work and:

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

(
i
) Submitting
resumes to employers.

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

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

(
iv
) Attending
interviews with potential employers.

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

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

5.

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

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

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

(c) If benefits have been paid in respect to the
week.

6.

7.
Has met one of the following requirements:

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

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

7.

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

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

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

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

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

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

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

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

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

F. For the purposes of subsection A, paragraph
6

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

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

START_STATUTE
23-773.

Examination and determination of claims

A. A representative designated by the department as
a deputy shall promptly examine any claim for benefits and, on the basis of the
facts found by the deputy, shall determine whether
or not

the claim is valid. If the claim is valid, the deputy shall also determine the
week with respect to which the benefit year shall commence, the weekly benefit
amount payable and the maximum duration of the benefit.

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

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

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

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

3. The reasoning applied in making the
determination.

D. Before the time for appeal as prescribed in
subsection B of this section has expired, an interested party may request a
reconsidered determination.� The department shall examine the request and,
within seven calendar days, deny the request or issue a reconsidered
determination.� The interested party may prove that a response was timely filed
by using evidence of fax records that documents the date and time when a faxed
response was transmitted and received by the department. A request
for reconsideration that is denied shall be treated as an appeal, and the same
procedure shall be followed as provided for in case of appeal from the original
determination. If a reconsidered determination is issued, the time
for appeal shall run from the date of issuance of the reconsidered
determination. The employer and the claimant shall each be
permitted no

allowed not
more than one
request for reconsideration on each case.

E. Before the actual filing of an appeal under
subsection B of this section, but not later than the time
permitted

allowed
to appeal, the department on its own motion may
issue a reconsidered determination.� After the time for appeal has expired, but
within one year after the issuance of the original determination, the
department with authorization of the unemployment insurance program
administrator may issue a reconsidered determination, on the basis of newly
discovered evidence that by due diligence could not have been previously
discovered, if no administrative or judicial review has occurred or is pending
on the original determination. If a redetermination is based on
fraud, the
one year

one-year
limitation
on the issuance of redeterminations does not apply.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

START_STATUTE
23-776.

Disqualification from benefits for failure to accept suitable
work or actively seek work; exceptions

A. An individual shall be disqualified for benefits
if the department finds the individual has failed without cause
either
to apply for available, suitable work, when so directed by the employment
office or the department, to actively engage in seeking work, to accept
suitable work when offered or to return to the individual's customary self-employment
when so directed by the department

to actively seek and
apply for suitable work, to accept an offer of suitable work or to accept
reemployment at the same employer for suitable work, if offered
.

The disqualification shall begin with the week in
which the failure occurred and shall continue for the duration of the
individual's unemployment and until the individual has earned wages in an
amount equivalent to eight times the individual's weekly benefit amount
otherwise payable.

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

1. Refuses to return to work.

2. Refuses to accept an offer of
suitable work.

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

4. Fails to respond to an offer of
employment.

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

B.

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

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

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

C.

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

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

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

3. As a condition of being employed
,

the individual would be required to join a company union or to resign from or
refrain from joining a bona fide labor organization.

D.

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

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

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

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

START_STATUTE
36-407.04.

Hospitals; patient immigration status; data collection; reporting
requirements

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

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

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

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

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

START_STATUTE
36-2903.18.

Data matching agreements; review of member eligibility
information; quarterly eligibility redetermination; waiver requests

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

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

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

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

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

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

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

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

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

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

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

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

START_STATUTE
36-2903.19.

Presumptive eligibility; limits; standards; notification;
training

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

START_STATUTE
41-708.

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

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

and the total amount of salaries for each budget unit for the
prior fiscal year, delineated by:

1. Retirement system.

2. Employee tier.

3. Fund source.

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

B.

C.
For
the purposes of this section:

1. "Budget unit":

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

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

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

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

START_STATUTE
41-710.04.

Agency vacancies; elimination; full-time equivalent
positions; adjustment; definition

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

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

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

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

Sec. 11.
Repeal

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

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

START_STATUTE
41-3030.27.

Department of economic security; termination July 1, 2030

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

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

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

START_STATUTE
46-232.

Supplemental nutrition assistance program; eligibility
evaluations; public posting; definitions

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

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

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

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

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

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

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

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

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

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

(
c
) The amount
of Improper payments and expenditures.

(
d
) The amount
of monies recovered.

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

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

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

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

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

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

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

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

D. For the purposes of this section:

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

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

START_STATUTE
46-233.

Department of economic security; supplemental nutrition
assistance program; work requirement waivers; discretionary exemption
prohibition

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

1. It is required by federal law.

2. It is authorized by state law.

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

START_STATUTE
46-234.

Supplemental nutrition assistance program; mandatory employment
and training

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

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

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

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

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

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

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

START_STATUTE
46-235.

Use of supplemental nutrition assistance benefits; purchases;
waiver; definitions

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

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

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

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

E. For the purposes of this section:

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

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

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

(
c
) Eggs and
egg substitutes.

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

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

(
f
) Cooking
oils and fats.

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

(
h
) One hundred
percent fruit or vegetable juice.

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

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

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

(
b
) Candy and
confectionery products.

(
c
) Snack foods
of minimal nutritional value as defined by the united states department of
agriculture.

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

START_STATUTE
46-236.

Payment error rate; reduction; quarterly reports; requirements;
auditor general

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

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

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

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

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

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

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

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

Sec. 14.
Delayed repeal

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

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

START_STATUTE
46-297.01.

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

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

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

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

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

Sec. 16.
Legislative findings

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

1. Promote access to
nutritious food.

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

3. Ensure responsible
stewardship of taxpayer monies.

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

Sec. 17.
Purpose

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

Sec. 18.
Retroactivity

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

Sec. 19.
Effective Date

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