HB 2110 - azleg.govHB 2110 - 2 - 1 6. "Child" or "children", as used in reference to age of persons,...

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REFERENCE TITLE: universities; governing boards State of Arizona House of Representatives Fifty-third Legislature Second Regular Session 2018

HB 2110

Introduced by Representatives Finchem: Barton, Clodfelter, Cobb, Grantham, John, Kern, Lawrence, Leach, Mitchell, Norgaard, Nutt, Payne, Townsend, Senators

Allen S, Borrelli, Burges, Kavanagh

AN ACT

AMENDING SECTIONS 1-215, 3-121, 3-123, 3-125, 3-126, 3-128, 3-2601, 3-2603, 5-222, 5-572, 9-921, 9-957, 11-256.03, 11-702, 11-703, 11-704, 15-101, 15-121, 15-131, 15-133, 15-135, 15-151, 15-183, 15-185, 15-203, 15-211, 15-249.01, 15-249.06 AND 15-532, ARIZONA REVISED STATUTES; AMENDING SECTION 15-701.01, ARIZONA REVISED STATUTES, AS AMENDED BY LAWS 2015, CHAPTER 1, SECTION 1, CHAPTER 127, SECTION 1 AND CHAPTER 145, SECTION 1; REPEALING SECTION 15-701.01, ARIZONA REVISED STATUTES, AS AMENDED BY LAWS 2017, CHAPTER 210, SECTION 4; AMENDING SECTIONS 15-792.03, 15-795.01, 15-901.07, 15-1042, 15-1601, 15-1621 AND 15-1622, ARIZONA REVISED STATUTES; REPEALING SECTION 15-1623, ARIZONA REVISED STATUTES; AMENDING SECTION 15-1624, ARIZONA REVISED STATUTES; REPEALING SECTION 15-1625, ARIZONA REVISED STATUTES; AMENDING TITLE 15, CHAPTER 13, ARTICLE 2, ARIZONA REVISED STATUTES, BY ADDING A NEW SECTION 15-1625; AMENDING SECTION 15-1626, ARIZONA REVISED STATUTES, AS AMENDED BY LAWS 2016, CHAPTER 238, SECTION 1 AND CHAPTER 372, SECTION 4; REPEALING SECTION 15-1626, ARIZONA REVISED STATUTES, AS AMENDED BY LAWS 2016, CHAPTER 130, SECTION 1; AMENDING SECTIONS 15-1626.01, 15-1627, 15-1628, 15-1629, 15-1630, 15-1631, 15-1633, 15-1634, 15-1635, 15-1635.01, 15-1636, 15-1637, 15-1639, 15-1640, 15-1641, 15-1642, 15-1643, 15-1644, 15-1645, 15-1646, 15-1647, 15-1648, 15-1649, 15-1650, 15-1650.01, 15-1650.02, 15-1650.03, 15-1650.04, 15-1651, 15-1652, 15-1653, 15-1654, 15-1655, 15-1661, 15-1662, 15-1663, 15-1664, 15-1665, 15-1667, 15-1669, 15-1681, 15-1682.03, 15-1741, 15-1743, 15-1747, 15-1754, 15-1781, 15-1802, 15-1804, 15-1805, 15-1806,

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15-1808, 15-1809, 15-1821, 15-1821.01, 15-1822, 15-1823, 15-1824, 15-1825, 15-1831, 15-1851, 15-1861, 15-1891, 15-1895, 15-1896 AND 15-1898, ARIZONA REVISED STATUTES; AMENDING SECTION 15-2401, ARIZONA REVISED STATUTES, AS AMENDED BY LAWS 2016, CHAPTER 112, SECTION 1 AND CHAPTER 353, SECTION 1; AMENDING SECTION 15-2401, ARIZONA REVISED STATUTES, AS AMENDED BY LAWS 2017, CHAPTER 139, SECTION 1; AMENDING SECTIONS 17-491, 18-101, 23-391 AND 23-722.04, ARIZONA REVISED STATUTES; AMENDING SECTION 27-102, ARIZONA REVISED STATUTES, AS AMENDED BY LAWS 2016, CHAPTER 128, SECTION 5; REPEALING SECTION 27-102, ARIZONA REVISED STATUTES, AS AMENDED BY LAWS 2016, CHAPTER 371, SECTION 6; AMENDING SECTIONS 27-104, 27-106, 27-108, 27-110, 28-2412, 28-9102, 34-105, 34-451, 34-461, 35-101, 35-116, 35-120, 35-148, 35-190, 35-515, 35-701, 35-702, 35-703, 35-705, 35-722, 35-771, 36-2102, 36-2903.01, 38-533, 38-611, 38-612, 38-615, 38-618, 38-626, 38-671, 38-727, 38-842, 41-191.09, 41-192, 41-612, 41-706, 41-724, 41-741, 41-742, 41-751, 41-782, 41-791.01, 41-792, 41-793, 41-1002.01, 41-1005, 41-1092.02, 41-1231, 41-1232.08, 41-1371, 41-1502, 41-1829.01, 41-1862, 41-2501, 41-2616, 41-2706, 41-2751, 41-2771, 41-2772 AND 41-3022.12, ARIZONA REVISED STATUTES; AMENDING TITLE 41, CHAPTER 27, ARTICLE 2, ARIZONA REVISED STATUTES, BY ADDING SECTIONS 41-3028.01, 41-3028.02 AND 41-3028.03; AMENDING SECTIONS 41-5404, 42-5032.01, 42-5061, 42-5073, 42-5074, 43-1022, 43-1074.01, 43-1168, 44-7002, 48-4202, 48-4204 AND 48-4235, ARIZONA REVISED STATUTES; APPROPRIATING MONIES; RELATING TO UNIVERSITIES.

(TEXT OF BILL BEGINS ON NEXT PAGE)

HB 2110

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Be it enacted by the Legislature of the State of Arizona: 1 Section 1. Section 1-215, Arizona Revised Statutes, is amended to 2

read: 3 1-215. Definitions 4 In the statutes and laws of this state, unless the context otherwise 5

requires: 6 1. "Action" includes any matter or proceeding in a court, civil or 7

criminal. 8 2. "Adopted rule" means a final rule as defined in section 41-1001. 9 3. "Adult" means a person who has attained eighteen years of age. 10 4. "Alternative fuel" means: 11 (a) Electricity. 12 (b) Solar energy. 13 (c) Liquefied petroleum gas, natural gas, hydrogen or a blend of 14

hydrogen with liquefied petroleum or natural gas that complies with any of 15 the following: 16

(i) Is used in an engine that is certified to meet at a minimum the 17 United States environmental protection agency low emission vehicle 18 standard pursuant to 40 Code of Federal Regulations section 88.104-94 or 19 88.105-94. 20

(ii) Is used in an engine that is certified by the engine modifier 21 to meet the addendum to memorandum 1-A of the United States environmental 22 protection agency as printed in the federal register, volume 62, number 23 207, October 27, 1997, pages 55635 through 55637. 24

(iii) Is used in an engine that is the subject of a waiver for that 25 specific engine application from the United States environmental 26 protection agency's memorandum 1-A addendum requirements and that waiver 27 is documented to the reasonable satisfaction of the director of the 28 department of environmental quality. 29

(d) Only for vehicles that use alcohol fuels before August 21, 30 1998, alcohol fuels that contain not less than eighty-five per cent 31 PERCENT alcohol by volume. 32

(e) A combination of at least seventy per cent PERCENT alternative 33 fuel and no more than thirty per cent petroleum based PERCENT 34 PETROLEUM-BASED fuel that operates in an engine that meets the United 35 States environmental protection agency low emission vehicle standard 36 pursuant to 40 Code of Federal Regulations section 88.104-94 or 88.105-94 37 and that is certified by the engine manufacturer to consume at least 38 seventy per cent PERCENT alternative fuel during normal vehicle 39 operations. 40

5. "Bribe" means anything of value or advantage, present or 41 prospective, asked, offered, given, accepted or promised with a corrupt 42 intent to influence, unlawfully, the person to whom it is given in that 43 person's action, vote or opinion, in any public or official capacity. 44

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6. "Child" or "children", as used in reference to age of persons, 1 means persons under eighteen years of age. 2

7. "Clean burning fuel" means: 3 (a) An emulsion of water-phased hydrocarbon fuel that contains not 4

less than twenty per cent PERCENT water by volume and that complies with 5 any of the following: 6

(i) Is used in an engine that is certified to meet at a minimum the 7 United States environmental protection agency low emission vehicle 8 standard pursuant to 40 Code of Federal Regulations section 88.104-94 or 9 88.105-94. 10

(ii) Is used in an engine that is certified by the engine modifier 11 to meet the addendum to memorandum 1-A of the United States environmental 12 protection agency as printed in the federal register, volume 62, number 13 207, October 27, 1997, pages 55635 through 55637. 14

(iii) Is used in an engine that is the subject of a waiver for that 15 specific engine application from the United States environmental 16 protection agency's memorandum 1-A addendum requirements and that waiver 17 is documented to the reasonable satisfaction of the director of the 18 department of environmental quality. 19

(b) A diesel fuel substitute that is produced from nonpetroleum 20 renewable resources if the qualifying volume of the nonpetroleum renewable 21 resources meets the standards for California diesel fuel as adopted by the 22 California air resources board pursuant to 13 California Code of 23 Regulations sections 2281 and 2282 in effect on January 1, 2000, the 24 diesel fuel substitute meets the registration requirement for fuels and 25 additives established by the United States environmental protection agency 26 pursuant to section 211 of the clean air act as defined in section 27 49-401.01 and the use of the diesel fuel substitute complies with the 28 requirements listed in 10 Code of Federal Regulations part 490, as printed 29 in the federal register, volume 64, number 96, May 19, 1999. 30

(c) A diesel fuel that complies with all of the following: 31 (i) Contains a maximum of fifteen parts per million by weight of 32

sulfur. 33 (ii) Meets ASTM D975. 34 (iii) Meets the registration requirements for fuels and additives 35

established by the United States environmental protection agency pursuant 36 to section 211 of the clean air act as defined in section 49-401.01. 37

(iv) Is used in an engine that is equipped or has been retrofitted 38 with a device that has been certified by the California air resources 39 board diesel emission control strategy verification procedure, the United 40 States environmental protection agency voluntary diesel retrofit program 41 or the United States environmental protection agency verification protocol 42 for retrofit catalyst, particulate filter and engine modification control 43 technologies for highway and nonroad use diesel engines. 44

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(d) A blend of unleaded gasoline that contains at minimum 1 eighty-five per cent PERCENT ethanol by volume or eighty-five per cent 2 PERCENT methanol by volume. 3

(e) Neat methanol. 4 (f) Neat ethanol. 5 8. "Corruptly" means a wrongful design to acquire or cause some 6

pecuniary or other advantage to the person guilty of the act or omission 7 referred to, or to some other person. 8

9. "Daytime" means the period between sunrise and sunset. 9 10. "Depose" includes every manner of written statement under oath 10

or affirmation. 11 11. "Federal poverty guidelines" means the poverty guidelines as 12

updated annually in the federal register by the United States department 13 of health and human services. 14

12. "Grantee" includes every person to whom an estate or interest 15 in real property passes, in or by a deed. 16

13. "Grantor" includes every person from or by whom an estate or 17 interest in real property passes, in or by a deed. 18

14. "Includes" or "including" means not limited to and is not a 19 term of exclusion. 20

15. "Inhabitant" means a resident of a city, town, village, 21 district, county or precinct. 22

16. "Issue", as used in connection with descent of estates, 23 includes all lawful, lineal descendants of the ancestor. 24

17. "Knowingly": 25 (a) Means only a knowledge that the facts exist that bring the act 26

or omission within the provisions of the statute using such word. 27 (b) Does not require any knowledge of the unlawfulness of the act 28

or omission. 29 18. "Magistrate" means an officer having power to issue a warrant 30

for the arrest of a person charged with a public offense and includes the 31 chief justice and justices of the supreme court, judges of the superior 32 court, judges of the court of appeals, justices of the peace and judges of 33 a municipal court. 34

19. "Majority" or "age of majority", as used in reference to age of 35 persons, means eighteen years of age or more. 36

20. "Malice" and "maliciously" mean a wish to vex, annoy or injure 37 another person, or an intent to do a wrongful act, established either by 38 proof or presumption of law. 39

21. "Minor" means a person under the age of eighteen years. 40 22. "Minor children" means persons under the age of eighteen years. 41 23. "Month" means a calendar month unless otherwise expressed. 42 24. "Neglect", "negligence", "negligent" and "negligently" import a 43

want of such attention to the nature or probable consequence of the act or 44

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omission as a prudent man ordinarily bestows in acting in his own 1 concerns. 2

25. "Nighttime" means the period between sunset and sunrise. 3 26. "Oath" includes an affirmation or declaration. 4 27. "Peace officers" means sheriffs of counties, constables, 5

marshals, policemen of cities and towns, commissioned personnel of the 6 department of public safety, personnel who are employed by the state 7 department of corrections and the department of juvenile corrections and 8 who have received a certificate from the Arizona peace officer standards 9 and training board, peace officers who are appointed by a multicounty 10 water conservation district and who have received a certificate from the 11 Arizona peace officer standards and training board, police officers who 12 are appointed by community college district governing boards and who have 13 received a certificate from the Arizona peace officer standards and 14 training board, police officers who are appointed by the Arizona board of 15 regents GOVERNING BOARD OF A UNIVERSITY and who have received a 16 certificate from the Arizona peace officer standards and training board, 17 police officers who are appointed by the governing body of a public 18 airport pursuant to section 28-8426 and who have received a certificate 19 from the Arizona peace officer standards and training board, peace 20 officers who are appointed by a private postsecondary institution pursuant 21 to section 15-1897 and who have received a certificate from the Arizona 22 peace officer standards and training board and special agents from the 23 office of the attorney general, or of a county attorney, and who have 24 received a certificate from the Arizona peace officer standards and 25 training board. 26

28. "Person" includes a corporation, company, partnership, firm, 27 association or society, as well as a natural person. When the word 28 "person" is used to designate the party whose property may be the subject 29 of a criminal or public offense, the term includes the United States, this 30 state, or any territory, state or country, or any political subdivision of 31 this state that may lawfully own any property, or a public or private 32 corporation, or partnership or association. When the word "person" is 33 used to designate the violator or offender of any law, it includes A 34 corporation, A partnership or any association of persons. 35

29. "Personal property" includes money, goods, chattels, things in 36 action and evidences of debt. 37

30. "Population" means the population according to the most recent 38 United States decennial census. 39

31. "Process" means a citation, writ or summons issued in the 40 course of judicial proceedings. 41

32. "Property" includes both real and personal property. 42 33. "Real property" is coextensive with lands, tenements and 43

hereditaments. 44

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34. "Registered mail" includes certified mail. 1 35. "Seal", as used in reference to a paper issuing from a court or 2

public office to which the seal of such court or office is required to be 3 affixed, means an impression of the seal on that paper, an impression of 4 the seal affixed to that paper by a wafer or wax, a stamped seal, a 5 printed seal, a screened seal or a computer generated seal. 6

36. "Signature" or "subscription" includes a mark, if a person 7 cannot write, with the person's name written near it and witnessed by a 8 person who writes the person's own name as witness. 9

37. "State", as applied to the different parts of the United 10 States, includes the District of Columbia, this state and the territories. 11

38. "Testify" includes every manner of oral statement under oath or 12 affirmation. 13

39. "United States" includes the District of Columbia and the 14 territories. 15

40. "Vessel", as used in reference to shipping, includes ships of 16 all kinds, steamboats, steamships, barges, canal boats and every structure 17 adapted to navigation from place to place for the transportation of 18 persons or property. 19

41. "Wilfully" means, with respect to conduct or to a circumstance 20 described by a statute defining an offense, that a person is aware or 21 believes that the person's conduct is of that nature or that the 22 circumstance exists. 23

42. "Will" includes codicils. 24 43. "Workers' compensation" means workmen's compensation as used in 25

article XVIII, section 8, Constitution of Arizona. 26 44. "Writ" means an order or precept in writing issued in the name 27

of the state or by a court or judicial officer. 28 45. "Writing" includes printing. 29 Sec. 2. Section 3-121, Arizona Revised Statutes, is amended to 30

read: 31 3-121. Smith-Lever act accepted; authority of the governing 32

board of the university of Arizona 33 A. The assent of the state is given to the provisions and 34

requirements of an act of Congress entitled "An act to provide for 35 cooperative agricultural extension work between the agricultural colleges 36 in the several states," known as the Smith-Lever act. 37

B. The board of regents of the universities and state college of 38 Arizona GOVERNING BOARD OF THE UNIVERSITY OF ARIZONA is authorized and 39 empowered to receive the grants of money appropriated under that act, and 40 to organize and conduct agricultural extension work in connection with the 41 college of agriculture of the university of Arizona in accordance with the 42 terms and conditions expressed in the act. 43

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Sec. 3. Section 3-123, Arizona Revised Statutes, is amended to 1 read: 2

3-123. Agricultural extension work 3 Cooperative agricultural extension work shall consist of giving 4

practical demonstrations in agriculture and home economics, and imparting 5 information on those subjects through field demonstrations, publications 6 and otherwise. The work shall be carried on in such manner as is mutually 7 agreed upon ON by the board of regents of the universities and state 8 college of Arizona GOVERNING BOARD OF THE UNIVERSITY OF ARIZONA and the 9 county agricultural extension board of each county provided for in this 10 article. 11


3-125. Plan of extension work; annual report 14 The director of the agricultural extension service of the university 15

of Arizona shall annually present a plan of extension work in the state 16 for the ensuing year, for the approval of the board of regents GOVERNING 17 BOARD OF THE UNIVERSITY OF ARIZONA. The county agent-in-charge in each 18 county shall annually present to and for the approval of the board of 19 supervisors of the county and the county agricultural extension board a 20 detailed report of extension activities in the county for the preceding 21 fiscal year, including a detailed report of receipts and disbursements, 22 and a plan of extension work in the county for the ensuing year. The 23 financial reports shall be on forms prescribed by the board of regents 24 GOVERNING BOARD OF THE UNIVERSITY OF ARIZONA. 25


3-126. Annual county agricultural extension budget; tax levy; 28 collection; expenditures 29

A. The Arizona board of regents GOVERNING BOARD OF THE UNIVERSITY 30 OF ARIZONA shall have prepared for each county an annual financial budget 31 covering the total cost including the county's share of the cost of the 32 extension work, which, if adopted by a majority vote of the respective 33 county agricultural extension board at a regularly called meeting, shall 34 be submitted to the board of supervisors of the county who, WHICH shall 35 place such amount of such THE budget as the board of supervisors shall 36 approve APPROVES on the tax rolls of the county for the ensuing year. 37

B. The amount placed on the tax rolls shall be raised by direct 38 taxation. 39

C. The taxes, when collected, shall be transmitted by the county 40 treasurer upon ON A warrant drawn by the board of supervisors to the 41 comptroller of the university of Arizona and shall be expended upon ON 42 claims drawn by the board of regents GOVERNING BOARD OF THE UNIVERSITY OF 43 ARIZONA. 44

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D. All money raised by taxation by a county shall be expended for 1 the use and benefit of that county. 2


3-128. Expenditures of university of Arizona funds 5 A. For the purpose of aiding counties in support of the 6

agricultural extension program, the board of regents GOVERNING BOARD OF 7 THE UNIVERSITY OF ARIZONA shall have prepared an annual financial budget 8 covering the university of Arizona's share of the cost of extension work 9 in each county and after approval thereof may expend such amount of the 10 university of Arizona funds. 11

B. No funds secured through taxation, OR appropriation or from the 12 university of Arizona, as provided in this article, shall be available for 13 any county until plans for the expenditure of the funds have been made and 14 approved by the board of regents GOVERNING BOARD OF THE UNIVERSITY OF 15 ARIZONA. 16

C. All money obtained by taxation, OR appropriation, or from the 17 university of Arizona shall be expended for the use and benefit of the 18 county entitled to receive the fund, and the monies directed to be 19 expended from the university of Arizona funds shall be expended and 20 disbursed upon ON claims drawn by the board of regents GOVERNING BOARD OF 21 THE UNIVERSITY OF ARIZONA showing upon ON their face the county for whose 22 account the funds are expended. 23


3-2601. Definitions 26 In this article, unless the context otherwise requires: 27 1. "ALIRT agreement" means the Arizona livestock incident response 28

team agreement established between the department and a PUBLIC university 29 under the jurisdiction of the Arizona board of regents IN THIS STATE. 30

2. "Brand" means the term, design or trademark and other specific 31 designation under which an individual commercial feed is distributed in 32 this state. 33

3. "Commercial feed" means all materials, except whole seeds 34 unmixed or physically altered entire unmixed seeds, that are distributed 35 for use as feed or for mixing in feed. Commercial feed includes raw 36 agricultural commodities distributed for use as feed or for mixing in feed 37 when the commodities are adulterated within the meaning of section 3-2611. 38

4. "Customer-formula feed" means a mixture of commercial feed or 39 feed materials, or both, each batch of which is mixed according to the 40 specific instructions of the final purchaser. 41

5. "Distribute" means to offer for sale, sell, barter or otherwise 42 supply commercial feeds or customer-formula feeds, but does not include or 43 apply to any feeds supplied for consumption on the premises of the 44 supplier. 45

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6. "Division" means the environmental services division of the 1 Arizona department of agriculture. 2

7. "Feed ingredient" means each of the constituent materials making 3 up a commercial feed. 4

8. "Label" means a display of written, printed or graphic matter on 5 or affixed to the container in which a commercial feed is distributed, or 6 on the invoice or delivery slip with which a commercial feed or 7 customer-formula feed is distributed. 8

9. "Official sample" means any sample of feed taken by the director 9 or the director's agent and designated as official. 10

10. "Per cent PERCENT" or "percentage" means percentage by weight. 11 11. "Person" includes an individual, partnership, corporation, 12

firm, association or agent. 13 12. "Sell" or "sale" includes exchange. 14 13. "Ton" means a net weight of two thousand pounds avoirdupois. 15 Sec. 8. Section 3-2603, Arizona Revised Statutes, is amended to 16

read: 17 3-2603. Enforcement and administrative powers 18 A. The associate director may refuse to license or may cancel the 19

license of any distributor in violation of this article. The director 20 shall review the associate director's action on request of any person 21 adversely affected by the action. 22

B. The director may, after a hearing: 23 1. Adopt rules: 24 (a) Requiring the guarantee of substances and elements when claimed 25

present in a commercial feed, and declare the form in which the guarantee 26 shall appear on the label. 27

(b) Setting forth acceptable descriptive terms by which ingredients 28 shall be listed on the labeling when used as ingredients of a commercial 29 feed or customer-formula feed. 30

(c) Requiring a statement of warning and directions for use of 31 commercial feeds and customer-formula feeds containing drugs or chemicals. 32

(d) Establishing limits of viable weed seeds contained in 33 commercial feed. 34

(e) Both administrative and technical, which the director deems 35 necessary for the efficient administration of this article. 36

2. Cooperate with, and enter into agreements with, PUBLIC 37 universities under the jurisdiction of the Arizona board of regents IN 38 THIS STATE, other agencies of this state, other states and agencies of the 39 federal government in order to carry out the purpose and provisions of 40 this article, including the implementation and use of commercial feed 41 trust fund monies to assist the efforts of an ALIRT agreement. 42

3. Exempt from the definition of commercial feed or from specific 43 provisions of this article commodities such as hay, straw, stover, silage, 44 cobs, husks, hulls and individual chemical compounds or substances when 45

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those commodities, compounds or substances are not intermixed or mixed 1 with other materials and are not adulterated within the meaning of section 2 3-2611. 3

4. Define weights in the metric system. 4 Sec. 9. Section 5-222, Arizona Revised Statutes, is amended to 5

read: 6 5-222. Application of this chapter; definition 7 A. This chapter does not apply to any amateur boxing or mixed 8

martial arts contest conducted by the following: 9 1. Any school, community college, college or university or an 10

association or organization composed exclusively of schools, community 11 colleges, colleges or universities when each contestant is a student 12 enrolled in a school, community college, college or university. As used 13 in FOR THE PURPOSES OF this section, "school, community college, college 14 or university" means every school, community college, college or 15 university and every other school, community college, college or 16 university determined by the state board of education, community college 17 districts as defined in section 15-1401 or the Arizona board of regents 18 GOVERNING BOARD OF A UNIVERSITY to be maintained primarily for the giving 19 of general academic education. 20

2. A government unit or agency of the United States, this state or 21 a POLITICAL subdivision of this state or a unit of the United States armed 22 forces or the national guard if all contestants are members of that unit 23 of the armed forces or the national guard. 24

3. An amateur athletic program that is authorized by and sanctioned 25 under the rules, regulations and policies of a national governing body 26 that is recognized by the United States olympic committee in which all 27 contestants are amateur contestants. 28

4. Kickboxing events that are sanctioned by and conducted under the 29 direct supervision of the United States muay thai association or another 30 muay thai sanctioning body that is approved by the commission if all 31 contestants are amateur contestants. 32

5. Any bona fide private school whose primary purpose is 33 instruction and training in the martial arts, if: 34

(a) The contests held in conjunction with the instruction and 35 training are amateur. 36

(b) The contests are of a sparring nature with no official 37 decisions awarded. 38

(c) At least one contestant in each contest has been a member in 39 good standing of the sponsoring private school for at least sixty 40 continuous days before the contest. 41

(d) An admission fee or a mandatory donation or other form of 42 payment is not charged for attendance. 43

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6. Any bona fide private school whose primary purpose is 1 instruction in karate, if the contests held in conjunction with the 2 instruction are amateur. 3

B. An amateur mixed martial arts competitor shall not be licensed 4 as a professional mixed martial arts competitor until the person has 5 completed five or more verified amateur contests that are regulated by the 6 commission or by a sanctioning body that is approved by the commission. 7 The five-contest requirement prescribed by this subsection may be waived 8 by the commission or by the executive director. 9


5-572. Use of monies in state lottery fund; report 12 A. If there are any bonds or bond related obligations payable from 13

the state lottery revenue bond debt service fund, the state lottery 14 revenue bond debt service fund shall be secured by a first lien on the 15 monies in the state lottery fund after the payment of operating costs of 16 the lottery, as prescribed in section 5-555, subsection A, paragraph 1, 17 until the state lottery bond debt service fund contains sufficient monies 18 to meet all the requirements for the current period as required by the 19 bond documents. Debt service for revenue bonds issued pursuant to this 20 chapter shall be paid first from monies that would have otherwise been 21 deposited pursuant to this section in the state general fund. After the 22 requirements for the current period have been satisfied as required by the 23 bond documents, the monies in the state lottery fund shall be expended for 24 the expenses of the commission incurred in carrying out its powers and 25 duties and in the operation of the lottery. 26

B. Of the monies remaining in the state lottery fund each fiscal 27 year after appropriations and deposits authorized in subsection A of this 28 section, ten million dollars shall be deposited in the Arizona game and 29 fish commission heritage fund established by section 17-297. 30

C. Of the monies remaining in the state lottery fund each fiscal 31 year after appropriations and deposits authorized in subsections A and B 32 of this section, five million dollars shall be allocated to the department 33 of child safety for the healthy families program established by section 34 8-481, four million dollars shall be allocated to the Arizona board of 35 regents GOVERNING BOARD OF THE UNIVERSITY OF ARIZONA for the Arizona area 36 health education system established by section 15-1643, three million 37 dollars shall be allocated to the department of health services to fund 38 the teenage pregnancy prevention programs established in Laws 1995, 39 chapter 190, sections 2 and 3, two million dollars shall be allocated to 40 the department of health services for the health start program established 41 by section 36-697, two million dollars shall be deposited in the disease 42 control research fund established by section 36-274 and one million 43 dollars shall be allocated to the department of health services for the 44 federal women, infants and children food program. The allocations in this 45

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subsection shall be adjusted annually according to changes in the GDP 1 price deflator as defined in section 41-563 and the allocations are exempt 2 from the provisions of section 35-190 relating to lapsing of 3 appropriations. If there are not sufficient monies available pursuant to 4 this subsection, the allocation of monies for each program shall be 5 reduced on a pro rata basis. 6

D. If the state lottery director determines that monies available 7 to the state general fund may not equal eighty-four million one hundred 8 fifty thousand dollars in a fiscal year, the director shall not authorize 9 deposits to the Arizona game and fish commission heritage fund pursuant to 10 subsection B of this section until the deposits to the state general fund 11 equal eighty-four million one hundred fifty thousand dollars in a fiscal 12 year. 13

E. Of the monies remaining in the state lottery fund each fiscal 14 year after appropriations and deposits authorized in subsections A 15 through D of this section, one million dollars or the remaining balance in 16 the fund, whichever is less, is appropriated to the department of economic 17 security for grants to nonprofit organizations, including faith based 18 FAITH-BASED organizations, for homeless emergency and transitional 19 shelters and related support services. The department of economic 20 security shall submit a report on the amounts, recipients, purposes and 21 results of each grant to the governor, the speaker of the house of 22 representatives and the president of the senate on or before December 31 23 of each year for the prior fiscal year and shall provide a copy of this 24 report to the secretary of state. 25

F. Of the monies remaining in the state lottery fund each fiscal 26 year after appropriations and deposits authorized in subsections A 27 through E of this section, and after a total of at least ninety-nine 28 million six hundred forty thousand dollars has been deposited in the state 29 general fund, three million five hundred thousand dollars shall be 30 deposited in the Arizona competes fund established by section 41-1545.01. 31 The balance in the state lottery fund remaining after deposits into the 32 Arizona competes fund shall be deposited in the university capital 33 improvement lease-to-own and bond fund established by section 15-1682.03, 34 up to a maximum of eighty percent of the total annual payments of 35 lease-to-own and bond agreements entered into by the Arizona board of 36 regents GOVERNING BOARD OF A UNIVERSITY. 37

G. All monies remaining in the state lottery fund after the 38 appropriations and deposits authorized in this section shall be deposited 39 in the state general fund. 40

H. Except for monies expended for debt service of revenue bonds as 41 provided in subsection A of this section, monies expended under subsection 42 A of this section are subject to legislative appropriation. 43

I. The commission shall transfer monies prescribed in this section 44 on a quarterly basis. 45

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9-921. Powers and duties of the board; audit 3 A. The police pension board shall have exclusive control and 4

management of the police pension fund, subject to this article. It shall 5 make rules, not inconsistent with this article, for its government, the 6 conduct of its proceedings and the management of the fund, and shall do 7 all things necessary to carry out this article. It may compel witnesses 8 to attend hearings, or produce records and papers, and testify with 9 respect to applications for pensions, or on any matter connected with the 10 fund, and any member of the board may administer oaths to such witnesses. 11

B. The board may invest or reinvest, in the name of the board, that 12 portion of the fund which in its judgment is available for investment in 13 such interest-bearing securities as follows: 14

1. Bonds of the United States. 15 2. Federal housing insured mortgage bonds of the United States. 16 3. Bonds, debentures or other obligations issued by the federal 17

land banks, the federal intermediate credit banks or the banks for 18 cooperatives. 19

4. Any bonds on which the payment of interest and principal is 20 guaranteed by the United States. 21

5. Bonds issued by any United States government instrumentality or 22 federal agency that qualify and are acceptable as security for public 23 funds of the United States government. 24

6. General obligation bonds of the state or of the counties, 25 incorporated cities and towns and school districts. 26

7. Revenue bonds of the incorporated cities and towns of this 27 state, the Arizona board of regents GOVERNING BOARD OF A UNIVERSITY, the 28 Arizona power authority or any other legally constituted state authority 29 or agency authorized by law to issue revenue bonds, except revenue bonds 30 for recreational purposes issued by cities and towns. 31

8. Bonds of agricultural improvement districts and agricultural 32 improvement and power districts organized under the laws of this state 33 when issued or guaranteed, with the approval of the secretary of the 34 interior, by corporations operating a United States reclamation project 35 within the state. 36

9. Bonds of incorporated cities or towns of this state issued under 37 sections 48-595, 48-596, 48-597, 48-598, 48-599, 48-600, 48-601, 48-602, 38 48-603, 48-604, 48-605, 48-606, 48-607, 48-608, 48-609, 48-609.01 and 39 48-610. 40

10. First lien bonds of sanitary districts issued pursuant to title 41 48, chapter 14. 42

11. Registered warrants of the state, or registered county or 43 school district warrants when offered as security for monies of the county 44 or school district by which they are issued. 45

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12. Interest-bearing savings accounts or certificates of deposit in 1 banks doing business in this state whose accounts are insured by the 2 federal deposit insurance corporation, but only if such deposits in excess 3 of the insured amount are secured by the depository to the same extent and 4 in the same manner as required by the general depository law of the state. 5

13. Interest-bearing savings accounts or certificates of deposit in 6 savings and loan associations doing business in this state whose accounts 7 are insured by the federal savings and loan insurance corporation, but 8 only if such deposits in excess of the insured amount are secured by the 9 depository to the same extent and in the same manner as required by the 10 general depository law of the state. 11

14. Deposits placed in accordance with the procedures prescribed in 12 section 35-323.01. 13

C. The board shall cause an annual audit and report of the fund to 14 be made by a certified public accountant, and shall also cause actuarial 15 studies of the fund to be made periodically, but not less than once in 16 each three years, by a qualified actuary who is a member of the society of 17 actuaries. The actuary shall make specific recommendations as to the 18 contributions to be made to the fund in accordance with section 9-923, 19 subsection A, paragraph 10 in order to maintain the fund on an actuarially 20 sound basis. 21


9-957. Powers and duties of board; investments; review of 24 decisions 25

A. The board may compel witnesses to attend and testify on any 26 matter pertaining to this article, and its president or any member may 27 administer oaths. The board may provide for payment of its necessary 28 expenses, except that no compensation is payable to members of the board 29 for duties performed under this article. 30

B. Funds that are not immediately required for the payment of 31 pensions or benefits under this article may be invested or reinvested, at 32 the discretion of the board of trustees, by the county treasurer or by the 33 board of trustees, as follows: 34

1. In bonds of the United States. 35 2. In federal housing insured mortgage bonds of the United States. 36 3. In federal land bank bonds. 37 4. Any bonds on which the payment of interest and principal is 38

guaranteed by the United States. 39 5. Bonds issued by any United States government instrumentality or 40

federal agency that qualify and are acceptable as security for public 41 funds of the United States government. 42

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6. General obligation bonds of this state or of the counties, 1 incorporated cities and towns and school districts of this state. 2

7. Revenue bonds of the incorporated cities and towns of this 3 state, the Arizona board of regents GOVERNING BOARD OF A UNIVERSITY, the 4 Arizona power authority or any other legally constituted state authority 5 or agency authorized by law to issue revenue bonds, except revenue bonds 6 for recreational purposes issued by cities and towns. 7

8. Bonds of agricultural improvement districts and agricultural 8 improvement and power districts organized under the laws of this state 9 when issued or guaranteed, with the approval of the secretary of the 10 interior, by corporations operating a United States reclamation project 11 within the state. 12

9. Bonds of incorporated cities or towns of this state issued under 13 sections 48-595, 48-596, 48-597, 48-598, 48-599, 48-600, 48-601, 48-602, 14 48-603, 48-604, 48-605, 48-606, 48-607, 48-608, 48-609, 48-609.01 and 15 48-610. 16

10. First lien bonds of sanitary districts issued pursuant to title 17 48, chapter 14. 18

11. Registered warrants of the state, or registered county or 19 school district warrants when offered as security for monies of the county 20 or school district by which they are issued. 21

12. Interest-bearing savings accounts or certificates of deposit in 22 banks doing business in this state whose accounts are insured by the 23 federal deposit insurance corporation, but only if such deposits in excess 24 of the insured amount are secured by the depository to the same extent and 25 in the same manner as required by the general depository law of the state. 26

13. Interest-bearing savings accounts or certificates of deposit in 27 savings and loan associations doing business in this state, whose accounts 28 are insured by the federal savings and loan insurance corporation, but 29 only if such deposits in excess of the insured amount are secured by the 30 depository to the same extent and in the same manner as required by the 31 general depository law of this state. 32

14. Deposits placed in accordance with the procedures prescribed in 33 section 35-323.01. 34

C. All matters pertaining to the benefits granted by this article 35 to firefighters and their dependents shall be presented to the board, and 36 any person aggrieved by a decision of the board, at any time within thirty 37 days after its decision, may petition for a writ of certiorari, and the 38 court may on final hearing reverse or affirm, wholly or partly, or may 39 modify, the decision reviewed. 40

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Sec. 13. Section 11-256.03, Arizona Revised Statutes, is amended to 1 read: 2

11-256.03. Conveyance of property for health care institution 3 to nonprofit corporation; powers and duties of 4 county and nonprofit corporation; reports; 5 definitions 6

A. The board of supervisors of any county that has a population 7 greater than one million but less than two million persons and that owns 8 and operates a health care institution may enter into an agreement to 9 convey the real property and any improvements thereon and all other 10 property, both tangible and intangible, of such AN institution to a 11 nonprofit corporation established for the purposes of operating a health 12 care institution that includes inpatient services. Any property and 13 improvements conveyed pursuant to this section shall include the service 14 capability as indicated in the license of the health care institution and 15 all outpatient clinics administered by the health care institution at the 16 time of the conveyance and shall be conveyed for at least their fair 17 market value as determined at the time of the conveyance. 18

B. To satisfy the requirements of section 501 of the internal 19 revenue code, any nonprofit corporation to which property is conveyed 20 pursuant to subsection A of this section is declared to be: 21

1. A validly organized and existing body politic and corporate 22 exercising its powers for the benefit of the people, to improve their 23 health and welfare and to increase their prosperity. 24

2. Engaged in a purpose essential to public health care. 25 3. Performing an essential governmental function. 26 C. Any nonprofit corporation to which property is conveyed pursuant 27

to subsection A of this section is exempt from property taxation by this 28 state or any agency or subdivision of this state and possesses and may 29 exercise only those governmental powers of the board of supervisors that 30 are delegated to the nonprofit corporation by the board of supervisors and 31 that are necessary to satisfy the requirements of section 501 of the 32 internal revenue code, as specified in the terms, conditions, restrictions 33 and agreements to the conveyance agreement. These powers are in addition 34 to those powers granted to a nonprofit corporation by title 10, chapters 35 24 through 40. 36

D. Any nonprofit corporation to which property is conveyed pursuant 37 to subsection A of this section may issue bonds and incur obligations and 38 pledge its revenues as security for the payment thereof for health care 39 institutional purposes to the extent provided by the provisions of the 40 conveyance agreement. Nothing in This section shall be construed to DOES 41 NOT authorize the incurrence of a debt by the county within the meaning of 42 any constitutional restriction on debt. 43

E. Except as provided in subsections F and G of this section, a 44 nonprofit corporation to which property is conveyed pursuant to 45

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subsection A of this section may acquire by purchase, lease or otherwise, 1 and may operate, other health care institutions and real and personal 2 property for purposes of providing products and services related to the 3 operation of health care institutions owned, leased or operated by it. 4 Such AN acquisition or operation does not affect the powers, rights, 5 privileges or immunities conferred on such A nonprofit corporation by this 6 section. 7

F. Any nonprofit corporation to which property is conveyed pursuant 8 to subsection A of this section shall not own, lease or operate a health 9 care institution outside the conveying county. 10

G. Until September 1, 1986 neither a board of supervisors nor a 11 nonprofit corporation to which property is conveyed pursuant to 12 subsection A of this section shall enter into any agreement with a 13 nonprofit corporation that is a lessee as described in section 15-1637, 14 subsection A, if the agreement provides for the conveyance of any 15 ownership interest whatever in the nonprofit corporation to which property 16 is conveyed pursuant to subsection A of this section or in the property 17 described in subsection A of this section. After August 31, 1986, any 18 such agreement must be approved by the Arizona board of regents GOVERNING 19 BOARD OF A UNIVERSITY and the state legislature. This subsection does not 20 prevent the grant of an option to purchase such property, provided that 21 the option may not be exercised before September 1, 1986 and the exercise 22 of the option must be approved by the Arizona board of regents GOVERNING 23 BOARD OF A UNIVERSITY and the state legislature. Under no circumstances 24 shall any state general fund monies be used to acquire any interest in 25 such property. 26

H. Any nonprofit corporation to which property is conveyed pursuant 27 to subsection A of this section shall make semiannual progress reports as 28 to its financial status and deliver them on January 1 and July 1 of each 29 year to the president of the senate, the speaker of the house of 30 representatives and the governor. The nonprofit corporation shall present 31 an independently audited financial statement to the auditor general within 32 ninety days of AFTER the close of the previous fiscal year. The auditor 33 general shall review such statements and transmit them together with a 34 report to officers entitled to receive progress reports by this section. 35

I. For the purposes of this section: 36 1. "Health care institution" has the same meaning prescribed in 37

section 36-401. 38 2. "Internal revenue code" has the same meaning prescribed in 39

section 43-105. 40 3. "Nonprofit corporation" means a corporation as defined in 41

section 10-3140. 42

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11-702. Board of directors; conflict of interest prohibited; 3 violation; classification; powers and duties 4

A. The authority shall be governed by a board of directors 5 consisting of fifteen members. In counties having a population of over 6 one million five hundred thousand persons according to the most recent 7 United States decennial census, the board of supervisors shall appoint 8 five members, the president of a state university within the county shall 9 appoint one member and the mayors of the seven most populous cities in 10 that county shall each appoint one member, except that the mayor of the 11 most populous city shall appoint three members. In counties having a 12 population of one million five hundred thousand persons or less according 13 to the most recent United States decennial census, the board of 14 supervisors shall appoint the fifteen members. Directors must be 15 qualified electors of the county. In counties having a population of one 16 million five hundred thousand persons or less according to the most recent 17 United States decennial census, the board of supervisors shall appoint 18 eight members of the initial board of directors to terms of two years and 19 seven members to terms of four years. In counties having a population of 20 over one million five hundred thousand persons according to the most 21 recent United States decennial census, the board of supervisors shall 22 appoint five members of the initial board of directors to terms of four 23 years, the mayor of the most populous city shall appoint three members of 24 the initial board of directors to terms of four years, the president of a 25 state university within the county shall appoint one member of the initial 26 board of directors to a term of two years and the remainder of the MAYORS 27 OF THE REMAINING appointing cities shall EACH appoint one member of the 28 initial board to a term of two years. All subsequent members shall be 29 appointed to terms of four years. A director may not be appointed to more 30 than two consecutive terms. 31

B. Members of the board of directors shall not have any direct or 32 indirect financial interest in, or be employed in any capacity by, an 33 entity with which the authority has a contractual or lessor-lessee 34 relationship other than A UNIVERSITY OR the Arizona board of regents or an 35 institution under the jurisdiction of the board of regents GOVERNING BOARD 36 OF A UNIVERSITY. A violation of this section is a class 1 misdemeanor. 37

C. The board of directors may on behalf of the authority: 38 1. Adopt and use a corporate seal. 39 2. Sue and be sued. 40 3. Enter into contracts, including intergovernmental agreements 41

under chapter 7, article 3 of this title as necessary to carry out the 42 purposes and requirements of this chapter. 43

4. Adopt administrative rules as necessary to administer and 44 operate the authority and any facility under its jurisdiction. 45

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5. Employ an executive director and administrative and clerical 1 employees and prescribe the terms and conditions of their employment as 2 necessary to carry out the purposes of the authority. 3

6. Acquire by any lawful means, except by eminent domain, and 4 operate, maintain, encumber and dispose of real and personal property and 5 interests in property. 6

7. Administer trusts declared or established for the authority, 7 receive and hold in trust or otherwise property located in or out of this 8 state and, if not otherwise provided, dispose of the property for the 9 benefit of the authority. 10

8. Promote events in the public interest that are approved and 11 listed in the budget under section 11-705, subsection A, paragraph 3, 12 subdivision (d). 13

9. Accept gifts. 14 D. The board of directors shall: 15 1. Appoint from among its members a chairman, secretary and 16

treasurer and such other officers as may be necessary to conduct its 17 business. 18

2. Keep and maintain a complete and accurate record of all of its 19 proceedings. All proceedings and records of the board shall be open to 20 the public as required by title 38, chapter 3, article 3.1 and title 39, 21 chapter 1. 22

3. Actively promote the use of the authority's property and lease 23 or sublease the property for professional and amateur sports events and 24 for other suitable activities for the benefit of the public. 25

4. Provide for the maintenance and operation of the properties, 26 facilities, franchises and interests controlled by the authority. 27


11-703. Using university property 30 The board of directors may enter into one or more intergovernmental 31

agreements pursuant to chapter 7, article 3 of this title with the Arizona 32 board of regents or with any institution under its jurisdiction A 33 UNIVERSITY OR THE GOVERNING BOARD OF A UNIVERSITY in the county to lease 34 university real or personal property. Any such lease may authorize the 35 authority to sublease the property for any activity suited to the 36 property, including sporting events. In addition, the board of directors, 37 pursuant to section 11-702, subsection C, paragraph 6, may acquire 38 ownership of or an ownership interest in any such property. Subject to 39 the provisions of title 4, the board of directors may permit and regulate 40 the sale, use and consumption of alcoholic beverages at events held on 41 property acquired, leased or subleased under this section. 42

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11-704. County sports authority fund 3 A. The authority treasurer shall maintain a county sports authority 4

fund consisting of all monies received by the authority, including: 5 1. Payments received from leasing, subleasing or renting 6

facilities. 7 2. Revenues received by the authority from admissions and 8

concessions and other proceeds from events held at facilities leased by 9 the authority. 10

3. Monies received from issuing and selling bonds under article 2 11 of this chapter. 12

4. Interest and other income received from investing monies in the 13 fund. 14

5. Gifts, grants and donations received for that purpose from any 15 private source. 16

B. Monies in the fund may be used only for the following purposes: 17 1. Ordinary and necessary administration and operation expenses of 18

the authority, including: 19 (a) Reasonable salaries and employee related EMPLOYEE-RELATED 20

expenses of employees of the authority. 21 (b) Reasonable reimbursement of expenses of members of the board of 22

directors. 23 2. Making all payments required under any lease or sublease of 24

facilities by the authority. 25 3. Repaying and redeeming bonds issued by the authority, including 26

interest and redemption charges. 27 4. Academic scholarships, established by the board of directors at 28

the end of the fiscal year, to any COMMUNITY college UNDER THE 29 JURISDICTION OF A COMMUNITY COLLEGE DISTRICT GOVERNING BOARD or university 30 under the jurisdiction of the Arizona community college board or the 31 Arizona board of regents GOVERNING BOARD OF A UNIVERSITY. These 32 scholarships shall be funded from unexpended and unencumbered monies 33 remaining in the fund at the end of the fiscal year which are not 34 otherwise required as reserves. 35

C. The treasurer of the authority may invest any unexpended monies 36 in the fund as provided in title 35, chapter 2, including in the local 37 government investment pool, if authorized by the state treasurer. 38 Interest and other income from investments shall be credited to the fund. 39 The treasurer of the authority shall invest the monies so as to mature at 40 the times when the fund assets will be required for the purposes of this 41 article. If the liquid assets in the fund become insufficient to meet the 42 authority's obligations, the board of directors shall direct the treasurer 43 of the authority to liquidate sufficient securities to meet all of the 44 current obligations and immediately notify the board of supervisors, the 45

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attorney general and the auditor general of the insufficiency, and the 1 attorney general and auditor general shall investigate and audit the 2 circumstances surrounding the depletion of the fund and report their 3 findings to the board of supervisors. 4

D. The board of directors shall cause an annual audit to be 5 conducted of the fund by an independent certified public accountant within 6 thirty days after the end of the fiscal year. The board shall immediately 7 file a certified copy of the audit with the auditor general. The auditor 8 general may make such further audits and examinations as he deems 9 necessary, but if he takes no official action within thirty days after the 10 audit is filed, the audit is deemed sufficient. The board of directors 11 shall pay all fees and costs of the certified public accountant and 12 auditor general under this subsection from the fund. 13


15-101. Definitions 16 In this title, unless the context otherwise requires: 17 1. "Accommodation school" means either: 18 (a) A school that is operated through the county board of 19

supervisors and the county school superintendent and that the county 20 school superintendent administers to serve a military reservation or 21 territory that is not included within the boundaries of a school district. 22

(b) A school that provides educational services to homeless 23 children or alternative education programs as provided in section 15-308, 24 subsection B. 25

(c) A school that is established to serve a military reservation, 26 the boundaries of which are coterminous with the boundaries of the 27 military reservation on which the school is located. 28

2. "Assessed valuation" means the valuation derived by applying the 29 applicable percentage as provided in title 42, chapter 15, article 1 to 30 the full cash value or limited property value, whichever is applicable, of 31 the property. 32

3. "Charter holder" means a person that enters into a charter with 33 the state board for charter schools. For the purposes of this paragraph, 34 "person" means an individual, partnership, corporation, association or 35 public or private organization of any kind. 36

4. "Charter school" means a public school established by contract 37 with the state board of education, the state board for charter schools, a 38 PUBLIC university under the jurisdiction of the Arizona board of regents 39 IN THIS STATE, a community college district or a group of community 40 college districts pursuant to article 8 of this chapter to provide 41 learning that will improve pupil achievement. 42

5. "Child with a disability" means a child with a disability as 43 defined in section 15-761. 44

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6. "Class A bonds" means general obligation bonds approved by a 1 vote of the qualified electors of a school district at an election held on 2 or before December 31, 1998. 3

7. "Class B bonds" means general obligation bonds approved by a 4 vote of the qualified electors of a school district at an election held 5 from and after December 31, 1998. 6

8. "Competency" means a demonstrated ability in a skill at a 7 specified performance level. 8

9. "Course" means organized subject matter in which instruction is 9 offered within a given period of time and for which credit toward 10 promotion, graduation or certification is usually given. A course 11 consists of knowledge selected from a subject for instructional purposes 12 in the schools. 13

10. "Course of study" means a list of required and optional 14 subjects to be taught in the schools. 15

11. "Dual enrollment course" means a college-level course that is 16 conducted on the campus of a high school or on the campus of a joint 17 technical education district, that is applicable to an established 18 community college academic degree or certificate program and that is 19 transferable to a PUBLIC university under the jurisdiction of the Arizona 20 board of regents IN THIS STATE. A dual enrollment course that is 21 applicable to a community college occupational degree or certificate 22 program may be transferable to a PUBLIC university under the jurisdiction 23 of the Arizona board of regents IN THIS STATE. 24

12. "Elementary grades" means kindergarten programs and grades one 25 through eight. 26

13. "Fiscal year" means the year beginning July 1 and ending 27 June 30. 28

14. "Governing board" means a body organized for the government and 29 management of the schools within a school district or a county school 30 superintendent in the conduct of an accommodation school. 31

15. "Lease" means an agreement for conveyance and possession of 32 real or personal property. 33

16. "Limited property value" means the value determined pursuant to 34 title 42, chapter 13, article 7. Limited property value shall be used as 35 the basis for assessing, fixing, determining and levying primary property 36 taxes. 37

17. "Nontest" means not relating to knowledge or skills in reading, 38 writing, mathematics, social studies, science or any other course. 39

18. "Parent" means the natural or adoptive parent of a child or a 40 person who has custody of a child. 41

19. "Person who has custody" means a parent or legal guardian of a 42 child, a person to whom custody of the child has been given by order of a 43 court or a person who stands in loco parentis to the child. 44

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20. "Primary property taxes" means all ad valorem taxes except for 1 secondary property taxes. 2

21. "Private school" means a nonpublic institution where 3 instruction is imparted. 4

22. "School" or "public school" means any public institution 5 established for the purposes of offering instruction to pupils in programs 6 for preschool children with disabilities, kindergarten programs or any 7 combination of elementary grades or secondary grades one through twelve. 8

23. "School district" means a political subdivision of this state 9 with geographic boundaries organized for the purpose of the 10 administration, support and maintenance of the public schools or an 11 accommodation school. 12

24. "Secondary grades" means grades nine through twelve. 13 25. "Secondary property taxes" means ad valorem taxes used to pay 14

the principal of and the interest and redemption charges on any bonded 15 indebtedness or other lawful long-term obligation issued or incurred for a 16 specific purpose by a school district or a community college district and 17 amounts levied pursuant to an election to exceed a budget, expenditure or 18 tax limitation. 19

26. "Subject" means a division or field of organized knowledge, 20 such as English or mathematics, or a selection from an organized body of 21 knowledge for a course or teaching unit, such as the English novel or 22 elementary algebra. 23


15-121. School employees; participation in federal retirement 26 plans and deferred compensation plans; prohibition 27 against use of public monies; exceptions 28

A. Employees of school districts, accommodation school employees, 29 employees of the community college districts, employees of the 30 universities and all other certificated and noncertificated employees of 31 the schools of this state, including those located at state institutions, 32 may participate in federal retirement or deferred compensation plans as 33 provided in 26 United States Code sections 401(a), 403(b) and 457(b), if 34 the governing body approves. 35

B. Upon ON election by an employee to participate through salary 36 reduction contributions if permitted under federal law or by election of 37 the governing board to make nonelective employer contributions, the 38 governing board of a school district, the county school superintendent, 39 the community college district governing board, the Arizona board of 40 regents GOVERNING BOARD OF A UNIVERSITY or THE other governing body or 41 employer of the employee shall: 42

1. Invest such an amount as authorized by the employee, to be 43 reduced from the regular annual salary of the employee, in a 26 United 44

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States Code section 403(b) tax sheltered annuity or custodial account or a 1 26 United States Code section 457(b) deferred compensation plan. 2

2. Invest nonelective employer contributions in a 26 United States 3 Code section 401(a) defined contribution plan or a 26 United States Code 4 section 403(b) tax sheltered annuity or custodial account. 5

C. The amount to be invested shall be determined by the employee 6 not less than fifteen days before the employee's first payday in the 7 school year, or at any time during the school year at the option of the 8 governing body. The employing body or county school superintendent shall 9 assume no responsibility other than to make the requested payments during 10 the actual time of the employment of the employee. The employer shall 11 transfer to the fund manager the employee contributions within ten working 12 days after each and every payroll date. Contributions transferred after 13 that date shall include a penalty of six per cent PERCENT a year for each 14 day the contributions are late. The penalty shall be paid by the 15 employer. If the employee changes the employee's employment to another 16 school or school district, the employee may authorize the employee's new 17 employer to continue the payments if the governing body approves. 18

D. State, county, district or other public monies shall not be used 19 in the purchase of any annuity or payment of any deferred compensation 20 authorized by this article, except for monies authorized for the following 21 purposes: 22

1. The recruitment and retention of selected employees, including 23 teachers when there are shortages of teachers. 24

2. As a benefit to encourage teachers specifically selected by the 25 governing board or the board's authorized designee to teach in an 26 underperforming A school THAT IS ASSIGNED A LETTER GRADE OF D PURSUANT TO 27 SECTION 15-241. 28

3. For the reduction of the unfunded liabilities of unused leave 29 pay accruals with in-service nonelective employer contributions. 30

4. For the replacement of unused leave pay or other types of 31 severance pay at the time of severance of employment. 32

5. To buy out the individually negotiated contracts of key 33 employees. 34

6. To provide incentives for the early retirement of selected 35 employees as determined by the governing board. 36

E. If monies are contributed pursuant to subsection D, paragraph 4, 37 5 or 6 OF THIS SECTION, at the discretion of the governing board, those 38 monies may be contributed pursuant to 26 United States Code section 401(a) 39 only in the final year of service, or pursuant to 26 United States Code 40 section 403(b) both in the final year of service and for up to five tax 41 years following the tax year of the final year of service. 42

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15-131. Exchange teacher agreements 3 A. The governing board of any school district in this state or the 4

Arizona board of regents GOVERNING BOARD OF A UNIVERSITY may enter into 5 agreements with any foreign country, state, territory or possession of the 6 United States or other school district within the state for the exchange 7 and employment of teachers or professors having required certificates in 8 this state and teachers or professors in the public schools, universities 9 or colleges of any foreign country, state, territory or possession of the 10 United States or other school district within the state having 11 certification or qualifications equivalent to that of the exchange teacher 12 or professor of this state. 13

B. In all cases of the exchange of any foreign teacher or 14 professor, such AN exchange shall be contracted for and effected 15 exclusively through the teacher exchange program as authorized by federal 16 statutes enacted by the Congress of the United States. 17


15-133. Terms of employment 20 No AN exchange teacher or professor may NOT be employed in this 21

state unless he THE TEACHER OR PROFESSOR has been issued proper 22 certification and may not be employed for more than one school year, 23 except that, by consent of the governing board OF THE SCHOOL DISTRICT or 24 the Arizona board of regents GOVERNING BOARD OF THE UNIVERSITY and the two 25 exchange teachers concerned, the period may be extended to two years. 26


15-135. Deductions for retirement; preservation of rights 29 A. All regular deductions for retirement as required by law shall 30

be made from the salary of the local teacher or professor participating in 31 exchange teaching pursuant to this article. 32

B. No ANY such teacher or professor shall NOT lose any right of 33 certification, retirement, salary status or ANY other benefit provided by 34 law or by the rules of the governing board of the school district or the 35 Arizona board of regents GOVERNING BOARD OF THE UNIVERSITY due to exchange 36 teaching under this article. 37


15-151. Eye protective devices; definition 40 A. Every student, teacher and visitor in public and private 41

schools, community colleges, colleges and universities shall wear 42 appropriate eye protective ware EYEWEAR while participating in or when 43 observing vocational, technical, industrial arts, art or laboratory 44 science activities involving exposure to: 45

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1. Molten metals or other molten materials. 1 2. Cutting, shaping and grinding of materials. 2 3. Heat treatment, tempering or kiln firing of any metal or other 3

materials. 4 4. Welding fabrication processes. 5 5. Explosive materials. 6 6. Caustic solutions. 7 7. Radioactive materials. 8 B. The governing board of every school district, the governing 9

board of every community college district, the Arizona board of regents 10 GOVERNING BOARD OF EACH UNIVERSITY and every person maintaining a private 11 or parochial school in this state shall equip schools within their 12 jurisdiction with eye protective ware EYEWEAR for use as required in this 13 article. 14

C. Standards and rules for the enforcement of this article shall be 15 prescribed by the governing board of every school district, the community 16 college district governing board of each community college district and 17 the Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY. 18

D. Schools, community colleges, colleges and universities may 19 receive and expend federal, state and local monies to provide eye 20 protective devices. 21

E. For purposes of this article, "eye protective wear EYEWEAR" 22 means devices meeting the standards of the American national standards 23 institute's standards for occupational and education eye protection, 24 Z87.1-1989. 25


15-183. Charter schools; application; requirements; immunity; 28 exemptions; renewal of application; reprisal; fee; 29 funds; annual reports 30

A. An applicant seeking to establish a charter school shall submit 31 a written application to a proposed sponsor as prescribed in subsection C 32 of this section. The application, application process and application 33 time frames shall be posted on the sponsor's website and shall include the 34 following, as specified in the application adopted by the sponsor: 35

1. A detailed educational plan. 36 2. A detailed business plan. 37 3. A detailed operational plan. 38 4. Any other materials required by the sponsor. 39 B. The sponsor of a charter school may contract with a public body, 40

private person or private organization for the purpose of establishing a 41 charter school pursuant to this article. 42

C. The sponsor of a charter school may be either the state board of 43 education, the state board for charter schools, a PUBLIC university under 44 the jurisdiction of the Arizona board of regents IN THIS STATE, a 45

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community college district or a group of community college districts, 1 subject to the following requirements: 2

1. An applicant may not submit an application for sponsorship to 3 any person or entity other than those prescribed in this subsection. 4

2. The applicant may submit the application to the state board of 5 education or the state board for charter schools. Notwithstanding any 6 other law, neither the state board for charter schools nor the state board 7 of education shall grant a charter to a school district governing board 8 for a new charter school or for the conversion of an existing district 9 public school to a charter school. The state board of education or the 10 state board for charter schools may approve the application if the 11 application meets the requirements of this article and may approve the 12 charter if the proposed sponsor determines, within its sole discretion, 13 that the applicant is sufficiently qualified to operate a charter school 14 and that the applicant is applying to operate as a separate charter holder 15 by considering factors such as whether: 16

(a) The schools have separate governing bodies, governing body 17 membership, staff, facilities and student population. 18

(b) Daily operations are carried out by different administrators. 19 (c) The applicant intends to have an affiliation agreement for the 20

purpose of providing enrollment preferences. 21 (d) The applicant's charter management organization has multiple 22

charter holders serving varied grade configurations on one physical site 23 or nearby sites serving one community. 24

(e) It is reconstituting an existing school site population at the 25 same or new site. 26

(f) It is reconstituting an existing grade configuration from a 27 prior charter holder with at least one grade remaining on the original 28 site with the other grade or grades moving to a new site. The state board 29 of education or the state board for charter schools may approve any 30 charter schools transferring charters. If the state board of education or 31 the state board for charter schools rejects the preliminary application, 32 the state board of education or the state board for charter schools shall 33 notify the applicant in writing of the reasons for the rejection and of 34 suggestions for improving the application. An applicant may submit a 35 revised application for reconsideration by the state board of education or 36 the state board for charter schools. The applicant may request, and the 37 state board of education or the state board for charter schools may 38 provide, technical assistance to improve the application. 39

3. The applicant may submit the application to a PUBLIC university 40 under the jurisdiction of the Arizona board of regents IN THIS STATE, a 41 community college district or a group of community college districts. A 42 university, a community college district or a group of community college 43 districts shall not grant a charter to a school district governing board 44 for a new charter school or for the conversion of an existing district 45

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public school to a charter school. A university, a community college 1 district or a group of community college districts may approve the 2 application if it meets the requirements of this article and if the 3 proposed sponsor determines, in its sole discretion, that the applicant is 4 sufficiently qualified to operate a charter school. 5

4. Each applicant seeking to establish a charter school shall 6 submit a full set of fingerprints to the approving agency for the purpose 7 of obtaining a state and federal criminal records check pursuant to 8 section 41-1750 and Public Law 92-544. If an applicant will have direct 9 contact with students, the applicant shall possess a valid fingerprint 10 clearance card that is issued pursuant to title 41, chapter 12, 11 article 3.1. The department of public safety may exchange this 12 fingerprint data with the federal bureau of investigation. The criminal 13 records check shall be completed before the issuance of a charter. 14

5. All persons engaged in instructional work directly as a 15 classroom, laboratory or other teacher or indirectly as a supervisory 16 teacher, speech therapist or principal shall have a valid fingerprint 17 clearance card that is issued pursuant to title 41, chapter 12, article 18 3.1, unless the person is a volunteer or guest speaker who is accompanied 19 in the classroom by a person with a valid fingerprint clearance card. A 20 charter school shall not employ a teacher whose certificate has been 21 surrendered or revoked, unless the teacher's certificate has been 22 subsequently reinstated by the state board of education. All other 23 personnel shall be fingerprint checked pursuant to section 15-512, or the 24 charter school may require those personnel to obtain a fingerprint 25 clearance card issued pursuant to title 41, chapter 12, article 3.1. 26 Before employment, the charter school shall make documented, good faith 27 efforts to contact previous employers of a person to obtain information 28 and recommendations that may be relevant to a person's fitness for 29 employment as prescribed in section 15-512, subsection F. The charter 30 school shall notify the department of public safety if the charter school 31 or sponsor receives credible evidence that a person who possesses a valid 32 fingerprint clearance card is arrested for or is charged with an offense 33 listed in section 41-1758.03, subsection B. A person who is employed at a 34 charter school that has met the requirements of this paragraph is not 35 required to meet any additional requirements that are established by the 36 department of education or that may be established by rule by the state 37 board of education. The state board of education may not adopt rules that 38 exceed the requirements for persons qualified to teach in charter schools 39 prescribed in title I of the every student succeeds act (P.L. 114-95) or 40 the individuals with disabilities education improvement act of 2004 41 (P.L. 108-446). Charter schools may hire personnel who have not yet 42 received a fingerprint clearance card if proof is provided of the 43 submission of an application to the department of public safety for a 44

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fingerprint clearance card and if the charter school that is seeking to 1 hire the applicant does all of the following: 2

(a) Documents in the applicant's file the necessity for hiring and 3 placement of the applicant before receiving a fingerprint clearance card. 4

(b) Ensures that the department of public safety completes a 5 statewide criminal records check on the applicant. A statewide criminal 6 records check shall be completed by the department of public safety every 7 one hundred twenty days until the date that the fingerprint check is 8 completed or the fingerprint clearance card is issued or denied. 9

(c) Obtains references from the applicant's current employer and 10 the two most recent previous employers except for applicants who have been 11 employed for at least five years by the applicant's most recent employer. 12

(d) Provides general supervision of the applicant until the date 13 that the fingerprint card is obtained. 14

(e) Completes a search of criminal records in all local 15 jurisdictions outside of this state in which the applicant has lived in 16 the previous five years. 17

(f) Verifies the fingerprint status of the applicant with the 18 department of public safety. 19

6. A charter school that complies with the fingerprinting 20 requirements of this section shall be deemed to have complied with section 21 15-512 and is entitled to the same rights and protections provided to 22 school districts by section 15-512. 23

7. If a charter school operator is not already subject to a public 24 meeting or hearing by the municipality in which the charter school is 25 located, the operator of a charter school shall conduct a public meeting 26 at least thirty days before the charter school operator opens a site or 27 sites for the charter school. The charter school operator shall post 28 notices of the public meeting in at least three different locations that 29 are within three hundred feet of the proposed charter school site. 30

8. A person who is employed by a charter school or who is an 31 applicant for employment with a charter school, who is arrested for or 32 charged with a nonappealable offense listed in section 41-1758.03, 33 subsection B and who does not immediately report the arrest or charge to 34 the person's supervisor or potential employer is guilty of unprofessional 35 conduct and the person shall be immediately dismissed from employment with 36 the charter school or immediately excluded from potential employment with 37 the charter school. 38

9. A person who is employed by a charter school and who is 39 convicted of any nonappealable offense listed in section 41-1758.03, 40 subsection B or is convicted of any nonappealable offense that amounts to 41 unprofessional conduct under section 15-550 shall immediately do all of 42 the following: 43

(a) Surrender any certificates issued by the department of 44 education. 45

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(b) Notify the person's employer or potential employer of the 1 conviction. 2

(c) Notify the department of public safety of the conviction. 3 (d) Surrender the person's fingerprint clearance card. 4 D. An entity that is authorized to sponsor charter schools pursuant 5

to this article has no legal authority over or responsibility for a 6 charter school sponsored by a different entity. This subsection does not 7 apply to the state board of education's duty to exercise general 8 supervision over the public school system pursuant to section 15-203, 9 subsection A, paragraph 1. 10

E. The charter of a charter school shall do all of the following: 11 1. Ensure compliance with federal, state and local rules, 12

regulations and statutes relating to health, safety, civil rights and 13 insurance. The department of education shall publish a list of relevant 14 rules, regulations and statutes to notify charter schools of their 15 responsibilities under this paragraph. 16

2. Ensure that it is nonsectarian in its programs, admission 17 policies and employment practices and all other operations. 18

3. Ensure that it provides a comprehensive program of instruction 19 for at least a kindergarten program or any grade between grades one and 20 twelve, except that a school may offer this curriculum with an emphasis on 21 a specific learning philosophy or style or certain subject areas such as 22 mathematics, science, fine arts, performance arts or foreign language. 23

4. Ensure that it designs a method to measure pupil progress toward 24 the pupil outcomes adopted by the state board of education pursuant to 25 section 15-741.01, including participation in the statewide assessment and 26 the nationally standardized norm-referenced achievement test as designated 27 by the state board and the completion and distribution of an annual report 28 card as prescribed in chapter 7, article 3 of this title. 29

5. Ensure that, except as provided in this article and in its 30 charter, it is exempt from all statutes and rules relating to schools, 31 governing boards and school districts. 32

6. Ensure that, except as provided in this article, it is subject 33 to the same financial and electronic data submission requirements as a 34 school district, including the uniform system of financial records as 35 prescribed in chapter 2, article 4 of this title, procurement rules as 36 prescribed in section 15-213 and audit requirements. The auditor general 37 shall conduct a comprehensive review and revision of the uniform system of 38 financial records to ensure that the provisions of the uniform system of 39 financial records that relate to charter schools are in accordance with 40 commonly accepted accounting principles used by private business. A 41 school's charter may include exceptions to the requirements of this 42 paragraph that are necessary as determined by the university, the 43 community college district, the group of community college districts, the 44 state board of education or the state board for charter schools. The 45

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department of education or the office of the auditor general may conduct 1 financial, program or compliance audits. 2

7. Ensure compliance with all federal and state laws relating to 3 the education of children with disabilities in the same manner as a school 4 district. 5

8. Ensure that it provides for a governing body for the charter 6 school that is responsible for the policy decisions of the charter school. 7 Notwithstanding section 1-216, if there is a vacancy or vacancies on the 8 governing body, a majority of the remaining members of the governing body 9 constitute a quorum for the transaction of business, unless that quorum is 10 prohibited by the charter school's operating agreement. 11

9. Ensure that it provides a minimum of one hundred eighty 12 instructional days before June 30 of each fiscal year unless it is 13 operating on an alternative calendar approved by its sponsor. The 14 superintendent of public instruction shall adjust the apportionment 15 schedule accordingly to accommodate a charter school utilizing an 16 alternative calendar. 17

F. A charter school shall keep in the personnel file of all current 18 employees who provide instruction to pupils at the charter school 19 information about the employee's educational and teaching background and 20 experience in a particular academic content subject area. A charter 21 school shall inform parents and guardians of the availability of the 22 information and shall make the information available for inspection on 23 request of parents and guardians of pupils enrolled at the charter school. 24 This subsection does not require any charter school to release personally 25 identifiable information in relation to any teacher or employee, including 26 the teacher's or employee's address, salary, social security number or 27 telephone number. 28

G. The charter of a charter school may be amended at the request of 29 the governing body of the charter school and on the approval of the 30 sponsor. 31

H. Charter schools may contract, sue and be sued. 32 I. The charter is effective for fifteen years from the first day of 33

the fiscal year as specified in the charter, subject to the following: 34 1. At least eighteen months before the expiration of the charter, 35

the sponsor shall notify the charter school that the charter school may 36 apply for renewal and shall make the renewal application available to the 37 charter school. A charter school that elects to apply for renewal shall 38 file a complete renewal application at least fifteen months before the 39 expiration of the charter. A sponsor shall give written notice of its 40 intent not to renew the charter school's request for renewal to the 41 charter school at least twelve months before the expiration of the 42 charter. The sponsor shall make data used in making renewal decisions 43 available to the school and the public and shall provide a public report 44 summarizing the evidence basis for each decision. The sponsor may deny 45

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the request for renewal if, in its judgment, the charter holder has failed 1 to do any of the following: 2

(a) Meet or make sufficient progress toward the academic 3 performance expectations set forth in the performance framework. 4

(b) Meet the operational performance expectations set forth in the 5 performance framework or any improvement plans. 6

(c) Complete the obligations of the contract. 7 (d) Comply with this article or any provision of law from which the 8

charter school is not exempt. 9 2. A charter operator may apply for early renewal. At least nine 10

months before the charter school's intended renewal consideration, the 11 operator of the charter school shall submit a letter of intent to the 12 sponsor to apply for early renewal. The sponsor shall review fiscal 13 audits and academic performance data for the charter school that are 14 annually collected by the sponsor, review the current contract between the 15 sponsor and the charter school and provide the qualifying charter school 16 with a renewal application. On submission of a complete application, the 17 sponsor shall give written notice of its consideration of the renewal 18 application. The sponsor may deny the request for early renewal if, in 19 the sponsor's judgment, the charter holder has failed to do any of the 20 following: 21



(c) Complete the obligations of the contract. 26 (d) Comply with this article or any provision of law from which the 27

charter school is not exempt. 28 3. A sponsor shall review a charter at five-year intervals using a 29

performance framework adopted by the sponsor and may revoke a charter at 30 any time if the charter school breaches one or more provisions of its 31 charter or if the sponsor determines that the charter holder has failed to 32 do any of the following: 33



(c) Comply with this article or any provision of law from which the 38 charter school is not exempt. 39

4. In determining whether to renew or revoke a charter holder, the 40 sponsor must consider making sufficient progress toward the academic 41 performance expectations set forth in the sponsor's performance framework 42 as one of the most important factors. 43

5. At least sixty days before the effective date of the proposed 44 revocation, the sponsor shall give written notice to the operator of the 45

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charter school of its intent to revoke the charter. Notice of the 1 sponsor's intent to revoke the charter shall be delivered personally to 2 the operator of the charter school or sent by certified mail, return 3 receipt requested, to the address of the charter school. The notice shall 4 incorporate a statement of reasons for the proposed revocation of the 5 charter. The sponsor shall allow the charter school at least sixty days 6 to correct the problems associated with the reasons for the proposed 7 revocation of the charter. The final determination of whether to revoke 8 the charter shall be made at a public hearing called for such purpose. 9

J. The charter may be renewed for successive periods of twenty 10 years. 11

K. A charter school that is sponsored by the state board of 12 education, the state board for charter schools, a university, a community 13 college district or a group of community college districts may not be 14 located on the property of a school district unless the district governing 15 board grants this authority. 16

L. A governing board or a school district employee who has control 17 over personnel actions shall not take unlawful reprisal against another 18 employee of the school district because the employee is directly or 19 indirectly involved in an application to establish a charter school. A 20 governing board or a school district employee shall not take unlawful 21 reprisal against an educational program of the school or the school 22 district because an application to establish a charter school proposes the 23 conversion of all or a portion of the educational program to a charter 24 school. For the purposes of this subsection, "unlawful reprisal" means an 25 action that is taken by a governing board or a school district employee as 26 a direct result of a lawful application to establish a charter school and 27 that is adverse to another employee or an education program and: 28

1. With respect to a school district employee, results in one or 29 more of the following: 30

(a) Disciplinary or corrective action. 31 (b) Detail, transfer or reassignment. 32 (c) Suspension, demotion or dismissal. 33 (d) An unfavorable performance evaluation. 34 (e) A reduction in pay, benefits or awards. 35 (f) Elimination of the employee's position without a reduction in 36

force by reason of lack of monies or work. 37 (g) Other significant changes in duties or responsibilities that 38

are inconsistent with the employee's salary or employment classification. 39 2. With respect to an educational program, results in one or more 40

of the following: 41 (a) Suspension or termination of the program. 42 (b) Transfer or reassignment of the program to a less favorable 43

department. 44

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(c) Relocation of the program to a less favorable site within the 1 school or school district. 2

(d) Significant reduction or termination of funding for the 3 program. 4

M. Charter schools shall secure insurance for liability and 5 property loss. The governing body of a charter school that is sponsored 6 by the state board of education or the state board for charter schools may 7 enter into an intergovernmental agreement or otherwise contract to 8 participate in an insurance program offered by a risk retention pool 9 established pursuant to section 11-952.01 or 41-621.01 or the charter 10 school may secure its own insurance coverage. The pool may charge the 11 requesting charter school reasonable fees for any services it performs in 12 connection with the insurance program. 13

N. Charter schools do not have the authority to acquire property by 14 eminent domain. 15

O. A sponsor, including members, officers and employees of the 16 sponsor, is immune from personal liability for all acts done and actions 17 taken in good faith within the scope of its authority. 18

P. Charter school sponsors and this state are not liable for the 19 debts or financial obligations of a charter school or persons who operate 20 charter schools. 21

Q. The sponsor of a charter school shall establish procedures to 22 conduct administrative hearings on determination by the sponsor that 23 grounds exist to revoke a charter. Procedures for administrative hearings 24 shall be similar to procedures prescribed for adjudicative proceedings in 25 title 41, chapter 6, article 10. Except as provided in section 26 41-1092.08, subsection H, final decisions of the state board of education 27 and the state board for charter schools from hearings conducted pursuant 28 to this subsection are subject to judicial review pursuant to title 12, 29 chapter 7, article 6. 30

R. The sponsoring entity of a charter school shall have oversight 31 and administrative responsibility for the charter schools that it 32 sponsors. In implementing its oversight and administrative 33 responsibilities, the sponsor shall ground its actions in evidence of the 34 charter holder's performance in accordance with the performance framework 35 adopted by the sponsor. The performance framework shall be publicly 36 available, shall be placed on the sponsoring entity's website and shall 37 include: 38

1. The academic performance expectations of the charter school and 39 the measurement of sufficient progress toward the academic performance 40 expectations. 41

2. The operational expectations of the charter school, including 42 adherence to all applicable laws and obligations of the charter contract. 43

3. Intervention and improvement policies. 44

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S. Charter schools may pledge, assign or encumber their assets to 1 be used as collateral for loans or extensions of credit. 2

T. All property accumulated by a charter school shall remain the 3 property of the charter school. 4

U. Charter schools may not locate a school on property that is less 5 than one-fourth mile from agricultural land regulated pursuant to section 6 3-365, except that the owner of the agricultural land may agree to comply 7 with the buffer zone requirements of section 3-365. If the owner agrees 8 in writing to comply with the buffer zone requirements and records the 9 agreement in the office of the county recorder as a restrictive covenant 10 running with the title to the land, the charter school may locate a school 11 within the affected buffer zone. The agreement may include any 12 stipulations regarding the charter school, including conditions for future 13 expansion of the school and changes in the operational status of the 14 school that will result in a breach of the agreement. 15

V. A transfer of a charter to another sponsor, a transfer of a 16 charter school site to another sponsor or a transfer of a charter school 17 site to a different charter shall be completed before the beginning of the 18 fiscal year that the transfer is scheduled to become effective. An entity 19 that sponsors charter schools may accept a transferring school after the 20 beginning of the fiscal year if the transfer is approved by the 21 superintendent of public instruction. The superintendent of public 22 instruction shall have the discretion to consider each transfer during the 23 fiscal year on a case-by-case basis. A charter holder seeking to transfer 24 sponsors shall comply with the current charter terms regarding assignment 25 of the charter. A charter holder transferring sponsors shall notify the 26 current sponsor that the transfer has been approved by the new sponsor. 27

W. Notwithstanding subsection V of this section, a charter holder 28 on an improvement plan must notify parents or guardians of registered 29 students of the intent to transfer the charter and the timing of the 30 proposed transfer. On the approved transfer, the new sponsor shall 31 enforce the improvement plan but may modify the plan based on performance. 32

X. Notwithstanding subsection Y of this section, the state board 33 for charter schools shall charge a processing fee to any charter school 34 that amends its contract to participate in Arizona online instruction 35 pursuant to section 15-808. The charter Arizona online instruction 36 processing fund is established consisting of fees collected and 37 administered by the state board for charter schools. The state board for 38 charter schools shall use monies in the fund only for the processing of 39 contract amendments for charter schools participating in Arizona online 40 instruction. Monies in the fund are continuously appropriated. 41

Y. The sponsoring entity may not charge any fees to a charter 42 school that it sponsors unless the sponsor has provided services to the 43 charter school and the fees represent the full value of those services 44 provided by the sponsor. On request, the value of the services provided 45

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by the sponsor to the charter school shall be demonstrated to the 1 department of education. 2

Z. Charter schools may enter into an intergovernmental agreement 3 with a presiding judge of the juvenile court to implement a law-related 4 education program as defined in section 15-154. The presiding judge of 5 the juvenile court may assign juvenile probation officers to participate 6 in a law-related education program in any charter school in the county. 7 The cost of juvenile probation officers who participate in the program 8 implemented pursuant to this subsection shall be funded by the charter 9 school. 10

AA. The sponsor of a charter school shall modify previously 11 approved curriculum requirements for a charter school that wishes to 12 participate in the board examination system prescribed in chapter 7, 13 article 6 of this title. 14

BB. If a charter school decides not to participate in the board 15 examination system prescribed in chapter 7, article 6 of this title, 16 pupils enrolled at that charter school may earn a Grand Canyon diploma by 17 obtaining a passing score on the same board examinations. 18

CC. Notwithstanding subsection Y of this section, a sponsor of 19 charter schools may charge a new charter application processing fee to any 20 applicant. The application fee shall fully cover the cost of application 21 review and any needed technical assistance. Authorizers may approve 22 policies that allow a portion of the fee to be returned to the applicant 23 whose charter is approved. 24

DD. A charter school may choose to provide a preschool program for 25 children with disabilities pursuant to section 15-771. 26

EE. Pursuant to the prescribed graduation requirements adopted by 27 the state board of education, the governing body of a charter school 28 operating a high school may approve a rigorous computer science course 29 that would fulfill a mathematics course required for graduation from high 30 school. The governing body may approve a rigorous computer science course 31 only if the rigorous computer science course includes significant 32 mathematics content and the governing body determines the high school 33 where the rigorous computer science course is offered has sufficient 34 capacity, infrastructure and qualified staff, including competent teachers 35 of computer science. 36

FF. A charter school may permit the use of school property, 37 including school buildings, grounds, buses and equipment, by any person, 38 group or organization for any lawful purpose, including a recreational, 39 educational, political, economic, artistic, moral, scientific, social, 40 religious or other civic or governmental purpose. The charter school may 41 charge a reasonable fee for the use of the school property. 42

GG. A charter school and its employees, including the governing 43 body, or chief administrative officer, are immune from civil liability 44 with respect to all decisions made and actions taken to allow the use of 45

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school property, unless the charter school or its employees are guilty of 1 gross negligence or intentional misconduct. This subsection does not 2 limit any other immunity provisions that are prescribed by law. 3

HH. Sponsors authorized pursuant to this section shall submit an 4 annual report to the auditor general on or before October 1. The report 5 shall include: 6

1. The current number of charters authorized and the number of 7 schools operated by authorized charter holders. 8

2. The academic and operational performance of the sponsor's 9 charter portfolio as measured by the sponsor's adopted performance 10 framework. 11

3. For the prior year, the number of new charters approved, the 12 number of charter schools closed and the reason for the closure. 13

4. The sponsor's application, amendment, renewal and revocation 14 processes, charter contract template and current performance framework as 15 required by this section. 16

II. The auditor general shall prescribe the format for the annual 17 report required by subsection HH of this section and may require that the 18 annual report be submitted electronically. The auditor general shall 19 review the submitted annual reports to ensure that the reports include the 20 required items in subsection HH of this section and shall make the annual 21 reports available on request. If the auditor general finds significant 22 noncompliance or if a sponsor fails to submit the annual report required 23 by subsection HH of this section, on or before December 31 of each year 24 the auditor general shall report to the governor, the president of the 25 senate, the speaker of the house of representatives and the chairs of the 26 senate and house education committees or their successor committees, and 27 the legislature shall consider revoking the sponsor's authority to sponsor 28 charter schools. 29


15-185. Charter schools; financing; civil penalty; 32 transportation; definition 33

A. A school district is not financially responsible for any charter 34 school that is sponsored by the state board of education, the state board 35 for charter schools, a PUBLIC university under the jurisdiction of the 36 Arizona board of regents IN THIS STATE, a community college district or a 37 group of community college districts. 38

B. Financial provisions for a charter school that is sponsored by 39 the state board of education, the state board for charter schools, a 40 university, a community college district or a group of community college 41 districts are as follows: 42

1. The charter school shall calculate a base support level as 43 prescribed in section 15-943, except that: 44

(a) Section 15-941 does not apply to these charter schools. 45

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(b) The small school weights prescribed in section 15-943, 1 paragraph 1 apply if a charter holder, as defined in section 15-101, holds 2 one charter for one or more school sites and the average daily membership 3 for the school sites are combined for the calculation of the small school 4 weight. The small school weight shall not be applied individually to a 5 charter holder if one or more of the following conditions exist and the 6 combined average daily membership derived from the following conditions is 7 greater than six hundred: 8

(i) The organizational structure or management agreement of the 9 charter holder requires the charter holder or charter school to contract 10 with a specific management company. 11

(ii) The governing body of the charter holder has identical 12 membership to another charter holder in this state. 13

(iii) The charter holder is a subsidiary of a corporation that has 14 other subsidiaries that are charter holders in this state. 15

(iv) The charter holder holds more than one charter in this state. 16 (c) Notwithstanding subdivision (b) of this paragraph, for fiscal 17

years 2015-2016 and 2016-2017 the department of education shall reduce by 18 thirty-three percent the amount provided by the small school weight for 19 charter schools prescribed in subdivision (b) of this paragraph. 20

2. Notwithstanding paragraph 1 of this subsection, the student 21 count shall be determined initially using an estimated student count based 22 on actual registration of pupils before the beginning of the school year. 23 Notwithstanding section 15-1042, subsection F, student level data 24 submitted to the department may be used to determine estimated student 25 counts. After the first forty days, one hundred days or two hundred days 26 in session, as applicable, the charter school shall revise the student 27 count to be equal to the actual average daily membership, as defined in 28 section 15-901, of the charter school. Before the fortieth day, one 29 hundredth day or two hundredth day in session, as applicable, the state 30 board of education, the state board for charter schools, the sponsoring 31 university, the sponsoring community college district or the sponsoring 32 group of community college districts may require a charter school to 33 report periodically regarding pupil enrollment and attendance, and the 34 department of education may revise its computation of equalization 35 assistance based on the report. A charter school shall revise its student 36 count, base support level and charter additional assistance before May 15. 37 A charter school that overestimated its student count shall revise its 38 budget before May 15. A charter school that underestimated its student 39 count may revise its budget before May 15. 40

3. A charter school may utilize section 15-855 for the purposes of 41 this section. The charter school and the department of education shall 42 prescribe procedures for determining average daily membership. 43

4. Equalization assistance for the charter school shall be 44 determined by adding the amount of the base support level and charter 45

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additional assistance. The amount of the charter additional assistance is 1 one thousand seven hundred seventy-five dollars five cents per student 2 count in preschool programs for children with disabilities, kindergarten 3 programs and grades one through eight and two thousand sixty-eight dollars 4 seventy-nine cents per student count in grades nine through twelve. 5

5. The state board of education shall apportion state aid from the 6 appropriations made for such purposes to the state treasurer for 7 disbursement to the charter schools in each county in an amount as 8 determined by this paragraph. The apportionments shall be made as 9 prescribed in section 15-973, subsection B. 10

6. The charter school shall not charge tuition for pupils who 11 reside in this state, levy taxes or issue bonds. A charter school may 12 admit pupils who are not residents of this state and shall charge tuition 13 for those pupils in the same manner prescribed in section 15-823. 14

7. Not later than noon on the day preceding each apportionment date 15 established by paragraph 5 of this subsection, the superintendent of 16 public instruction shall furnish to the state treasurer an abstract of the 17 apportionment and shall certify the apportionment to the department of 18 administration, which shall draw its warrant in favor of the charter 19 schools for the amount apportioned. 20

C. If a pupil is enrolled in both a charter school and a public 21 school that is not a charter school, the sum of the daily membership, 22 which includes enrollment as prescribed in section 15-901, subsection A, 23 paragraph 1, subdivisions (a) and (b) and daily attendance as prescribed 24 in section 15-901, subsection A, paragraph 5, for that pupil in the school 25 district and the charter school shall not exceed 1.0. If a pupil is 26 enrolled in both a charter school and a public school that is not a 27 charter school, the department of education shall direct the average daily 28 membership to the school with the most recent enrollment date. On 29 validation of actual enrollment in both a charter school and a public 30 school that is not a charter school and if the sum of the daily membership 31 or daily attendance for that pupil is greater than 1.0, the sum shall be 32 reduced to 1.0 and shall be apportioned between the public school and the 33 charter school based on the percentage of total time that the pupil is 34 enrolled or in attendance in the public school and the charter 35 school. The uniform system of financial records shall include guidelines 36 for the apportionment of the pupil enrollment and attendance as provided 37 in this section. 38

D. Charter schools are allowed to accept grants and gifts to 39 supplement their state funding, but it is not the intent of the charter 40 school law to require taxpayers to pay twice to educate the same pupils. 41 The base support level for a charter school or for a school district 42 sponsoring a charter school shall be reduced by an amount equal to the 43 total amount of monies received by a charter school from a federal or 44 state agency if the federal or state monies are intended for the basic 45

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maintenance and operations of the school. The superintendent of public 1 instruction shall estimate the amount of the reduction for the budget year 2 and shall revise the reduction to reflect the actual amount before May 15 3 of the current year. If the reduction results in a negative amount, the 4 negative amount shall be used in computing all budget limits and 5 equalization assistance, except that: 6

1. Equalization assistance shall not be less than zero. 7 2. For a charter school sponsored by the state board of education, 8

the state board for charter schools, a university, a community college 9 district or a group of community college districts, the total of the base 10 support level and the charter additional assistance shall not be less than 11 zero. 12

E. If a charter school was a district public school in the prior 13 year and sponsored by the state board of education, the state board for 14 charter schools, a university, a community college district or a group of 15 community college districts, the reduction in subsection D of this section 16 applies. The reduction to the base support level of the charter school 17 shall equal the sum of the base support level and the charter additional 18 assistance received in the current year for those pupils who were enrolled 19 in the traditional public school in the prior year and are now enrolled in 20 the charter school in the current year. 21

F. Equalization assistance for charter schools shall be provided as 22 a single amount based on average daily membership without categorical 23 distinctions between maintenance and operations or capital. 24

G. At the request of a charter school, the county school 25 superintendent of the county where the charter school is located may 26 provide the same educational services to the charter school as prescribed 27 in section 15-308, subsection A. The county school superintendent may 28 charge a fee to recover costs for providing educational services to 29 charter schools. 30

H. If the sponsor of the charter school determines at a public 31 meeting that the charter school is not in compliance with federal law, 32 with the laws of this state or with its charter, the sponsor of a charter 33 school may submit a request to the department of education to withhold up 34 to ten percent of the monthly apportionment of state aid that would 35 otherwise be due the charter school. The department of education shall 36 adjust the charter school's apportionment accordingly. The sponsor shall 37 provide written notice to the charter school at least seventy-two hours 38 before the meeting and shall allow the charter school to respond to the 39 allegations of noncompliance at the meeting before the sponsor makes a 40 final determination to notify the department of education of 41 noncompliance. The charter school shall submit a corrective action plan 42 to the sponsor on a date specified by the sponsor at the meeting. The 43 corrective action plan shall be designed to correct deficiencies at the 44 charter school and to ensure that the charter school promptly returns to 45

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compliance. When the sponsor determines that the charter school is in 1 compliance, the department of education shall restore the full amount of 2 state aid payments to the charter school. 3

I. In addition to the withholding of state aid payments pursuant to 4 subsection H of this section, the sponsor of a charter school may impose a 5 civil penalty of one thousand dollars per occurrence if a charter school 6 fails to comply with the fingerprinting requirements prescribed in section 7 15-183, subsection C or section 15-512. The sponsor of a charter school 8 shall not impose a civil penalty if it is the first time that a charter 9 school is out of compliance with the fingerprinting requirements and if 10 the charter school provides proof within forty-eight hours of written 11 notification that an application for the appropriate fingerprint check has 12 been received by the department of public safety. The sponsor of the 13 charter school shall obtain proof that the charter school has been 14 notified, and the notification shall identify the date of the deadline and 15 shall be signed by both parties. The sponsor of a charter school shall 16 automatically impose a civil penalty of one thousand dollars per 17 occurrence if the sponsor determines that the charter school subsequently 18 violates the fingerprinting requirements. Civil penalties pursuant to 19 this subsection shall be assessed by requesting the department of 20 education to reduce the amount of state aid that the charter school would 21 otherwise receive by an amount equal to the civil penalty. The amount of 22 state aid withheld shall revert to the state general fund at the end of 23 the fiscal year. 24

J. A charter school may receive and spend monies distributed by the 25 department of education pursuant to section 42-5029, subsection E and 26 section 37-521, subsection B. 27

K. If a school district transports or contracts to transport pupils 28 to the Arizona state schools for the deaf and the blind during any fiscal 29 year, the school district may transport or contract with a charter school 30 to transport sensory impaired pupils during that same fiscal year to a 31 charter school if requested by the parent of the pupil and if the distance 32 from the pupil's place of actual residence within the school district to 33 the charter school is less than the distance from the pupil's place of 34 actual residence within the school district to the campus of the Arizona 35 state schools for the deaf and the blind. 36

L. Notwithstanding any other law, a PUBLIC university under the 37 jurisdiction of the Arizona board of regents IN THIS STATE, a community 38 college district or a group of community college districts shall not 39 include any student in the student count of the university, community 40 college district or group of community college districts for state funding 41 purposes if that student is enrolled in and attending a charter school 42 sponsored by the university, community college district or group of 43 community college districts. 44

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M. The governing body of a charter school shall transmit a copy of 1 its proposed budget or the summary of the proposed budget and a notice of 2 the public hearing to the department of education for posting on the 3 department of education's website no later than ten days before the 4 hearing and meeting. If the charter school maintains a website, the 5 charter school governing body shall post on its website a copy of its 6 proposed budget or the summary of the proposed budget and a notice of the 7 public hearing. 8

N. The governing body of a charter school shall collaborate with 9 the private organization that is approved by the state board of education 10 pursuant to section 15-792.02 to provide approved board examination 11 systems for the charter school. 12

O. If permitted by federal law, a charter school may opt out of 13 federal grant opportunities if the charter holder or the appropriate 14 governing body of the charter school determines that the federal 15 requirements impose unduly burdensome reporting requirements. 16

P. For the purposes of this section, "monies intended for the basic 17 maintenance and operations of the school" means monies intended to provide 18 support for the educational program of the school, except that it does not 19 include supplemental assistance for a specific purpose or title VIII of 20 the elementary and secondary education act of 1965 monies. The auditor 21 general shall determine which federal or state monies meet this 22 definition. 23


15-203. Powers and duties 26 A. The state board of education shall: 27 1. Exercise general supervision over and regulate the conduct of 28

the public school system and adopt any rules and policies it deems 29 necessary to accomplish this purpose. 30

2. Keep a record of its proceedings. 31 3. Make rules for its own government. 32 4. Determine the policy and work undertaken by it. 33 5. Subject to title 41, chapter 4, article 4, employ staff. 34 6. Prescribe and supervise the duties of its employees pursuant to 35

title 41, chapter 4, article 4, if not otherwise prescribed by statute. 36 7. Delegate to the superintendent of public instruction the 37

execution of board policies and rules. 38 8. Recommend to the legislature changes or additions to the 39

statutes pertaining to schools. 40 9. Prepare, publish and distribute reports concerning the 41

educational welfare of this state. 42 10. Prepare a budget for expenditures necessary for proper 43

maintenance of the board and accomplishment of its purposes and present 44 the budget to the legislature. 45

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11. Aid in the enforcement of laws relating to schools. 1 12. Prescribe a minimum course of study in the common schools, 2

minimum competency requirements for the promotion of pupils from the third 3 grade and minimum course of study and competency requirements for the 4 promotion of pupils from the eighth grade. The state board of education 5 shall prepare a fiscal impact statement of any proposed changes to the 6 minimum course of study or competency requirements and, on completion, 7 shall send a copy to the director of the joint legislative budget 8 committee and the executive director of the school facilities board. The 9 state board of education shall not adopt any changes in the minimum course 10 of study or competency requirements in effect on July 1, 1998 that will 11 have a fiscal impact on school capital costs. 12

13. Prescribe minimum course of study and competency requirements 13 for the graduation of pupils from high school. The state board of 14 education shall prepare a fiscal impact statement of any proposed changes 15 to the minimum course of study or competency requirements and, on 16 completion, shall send a copy to the director of the joint legislative 17 budget committee and the executive director of the school facilities 18 board. The state board of education shall not adopt any changes in the 19 minimum course of study or competency requirements in effect on July 1, 20 1998 that will have a fiscal impact on school capital costs. 21

14. Supervise and control the certification of persons engaged in 22 instructional work directly as any classroom, laboratory or other teacher 23 or indirectly as a supervisory teacher, speech therapist, principal or 24 superintendent in a school district, including school district preschool 25 programs, or any other educational institution below the community 26 college, college or university level, and prescribe rules for 27 certification. The rules: 28

(a) Shall provide for a variety of alternative teacher and 29 administrator preparation programs that allow for variations in program 30 sequence and design to apply for program approval. The state board shall 31 adopt rules pursuant to this subdivision designed to allow for a variety 32 of formats and shall not require a prescribed answer or design from the 33 program provider in order to obtain approval from the state board. Any 34 rules adopted by the state board pursuant to this subdivision shall be 35 substantially different from the rules adopted for the approval of 36 traditional preparation programs and may not unnecessarily restrict a 37 variety of alternative preparation programs from operating and providing 38 instruction in this state. The state board shall evaluate each program 39 provider based on the program's ability to prepare teachers and 40 administrators and to recruit teachers and administrators with a variety 41 of experiences and talents. The state board shall permit PUBLIC 42 universities under the jurisdiction of the Arizona board of regents IN 43 THIS STATE, community colleges in this state, private postsecondary 44 institutions licensed by this state, school districts, charter schools, 45

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professional organizations, nonprofit organizations and private entities 1 to apply for program approval and shall create application procedures and 2 certification criteria that are substantially less restrictive than those 3 for traditional preparation programs. At the completion of an alternative 4 preparation program, graduates shall: 5

(i) Hold a bachelor's degree from an accredited postsecondary 6 education institution. 7

(ii) If applicable, demonstrate professional knowledge and subject 8 knowledge proficiency pursuant to section 15-533. 9

(iii) Obtain a fingerprint clearance card pursuant to section 10 15-534. 11

(iv) If applicable, complete training in structured English 12 immersion as prescribed by the state board pursuant to section 15-756.09. 13

(v) If applicable, complete training in research-based systematic 14 phonics instruction as prescribed in subdivision (b) of this paragraph. 15

(vi) Demonstrate the required proficiency in the Constitutions of 16 the United States and Arizona as prescribed in section 15-532. 17

(b) Shall require applicants for all certificates for common school 18 instruction to complete a minimum of forty-five classroom hours or three 19 college level COLLEGE-LEVEL credit hours, or the equivalent, of training 20 in research-based systematic phonics instruction from a public or private 21 provider. 22

(c) Shall not require a teacher to obtain a master's degree or to 23 take any additional graduate courses as a condition of certification or 24 recertification. 25

(d) Shall allow a general equivalency diploma to be substituted for 26 a high school diploma in the certification of emergency substitute 27 teachers. 28

(e) Shall allow but shall not require the superintendent of a 29 school district to obtain certification from the state board of education. 30

(f) Shall provide for the issuance of a subject matter expert 31 standard teaching certificate to persons who have expertise in a content 32 area or subject matter. Persons who are certified pursuant to this 33 subdivision shall complete training, if applicable, in structured English 34 immersion as prescribed by the state board pursuant to section 15-756.09. 35 Persons who are certified pursuant to this subdivision are exempt from the 36 subject knowledge proficiency requirements prescribed in section 15-533 37 and from the proficiency requirements prescribed in section 15-532 on the 38 Constitutions of the United States and Arizona. Persons pursuant WHO ARE 39 SUBJECT to item (i) of this subdivision are also exempt from the 40 professional knowledge proficiency requirements pursuant to section 41 15-533. A person who obtains a subject matter expert standard teaching 42 certificate pursuant to this subdivision may provide instruction in the 43 person's field of expertise in grades six through twelve at any public 44 school in this state. Issuance of the subject matter expert standard 45

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teaching certificate may not be conditioned on the person's employment 1 with a local education agency. A person who meets the requirements of 2 this subdivision shall be issued a subject matter expert standard teaching 3 certificate without having to demonstrate professional knowledge 4 proficiency pursuant to section 15-533, except that the person shall have 5 at least two years to demonstrate professional knowledge proficiency 6 pursuant to section 15-533. School districts shall evaluate and provide 7 support pursuant to section 15-537 to teachers WHO ARE certified pursuant 8 to this subdivision. If a person fails to meet the professional knowledge 9 requirements of this section within two years, the department of education 10 or state board of education may temporarily suspend the subject matter 11 expert standard teaching certificate. A certificate that is temporarily 12 suspended pursuant to this subdivision is not considered a disciplinary 13 action, and a person shall be allowed to correct the deficiency within the 14 remaining time of the subject matter expert standard teaching 15 certification. This subdivision does not require a person who has 16 obtained another type of teaching certificate from the state board to 17 obtain a subject matter expert standard teaching certificate pursuant to 18 this subdivision in order to provide instruction in grades six through 19 twelve. A person is eligible for a subject matter expert standard 20 teaching certificate pursuant to this subdivision if the person obtains a 21 valid fingerprint clearance card that is issued pursuant to title 41, 22 chapter 12, article 3.1 and meets any of the following requirements: 23

(i) Has taught courses relevant to a content area or subject matter 24 for the last two consecutive years and for a total of at least three years 25 at one or more regionally or nationally accredited public or private 26 postsecondary institutions. A THE person shall demonstrate compliance 27 with this requirement by providing the state board with written proof of 28 employment for specific durations from one or more qualifying 29 postsecondary institutions. 30

(ii) Has either a baccalaureate degree, a master's degree or a 31 doctoral degree in a specific subject area that is directly relevant to a 32 content area or subject matter taught in public schools. 33

(iii) Demonstrates expertise through relevant work experience of at 34 least five years in a field that is relevant to a content area or subject 35 matter taught in public schools. A THE person shall demonstrate 36 compliance with this requirement by providing the state board with written 37 proof of employment. 38

(g) Notwithstanding section 15-533, shall exempt persons applying 39 for a secondary education certificate from the subject knowledge portion 40 of the proficiency examination if the state board determines that the 41 person has work experience in science, technology, engineering or 42 mathematics and can demonstrate adequate knowledge of a particular subject 43 through a postsecondary education degree or twenty-four credit hours of 44 relevant coursework. 45

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(h) Shall allow for all standard certificates issued to a person 1 pursuant to this section to be both issued and renewed for at least twelve 2 years and may not require more than fifteen hours of continuing education 3 credits each year in order to renew any certificate issued pursuant to 4 this section. 5

(i) Shall allow a certificate, and any endorsement or approved area 6 related to that certificate, to be renewed at least two years but not more 7 than ten years after that certificate expires without any other 8 requirements adopted by the state board of education or the department of 9 education if the person is in good standing, has at least ten years of 10 verified full-time experience in this state in the area IN WHICH the 11 person is seeking renewed certification and possesses a valid fingerprint 12 clearance card issued pursuant to section 15-534. A certificate renewed 13 pursuant to this subdivision shall be identical to the expired 14 certificate. 15

15. Adopt a list of approved tests for determining special 16 education assistance to gifted pupils as defined in and as provided in 17 chapter 7, article 4.1 of this title. The adopted tests shall provide 18 separate scores for quantitative reasoning, verbal reasoning and nonverbal 19 reasoning and shall be capable of providing reliable and valid scores at 20 the highest ranges of the score distribution. 21

16. Adopt rules governing the methods for the administration of all 22 proficiency examinations. 23

17. Adopt proficiency examinations for its use. The state board of 24 education shall determine the passing score for the proficiency 25 examinations. 26

18. Include within its budget the cost of contracting for the 27 purchase, distribution and scoring of the examinations as provided in 28 paragraphs 16 and 17 of this subsection. 29

19. Supervise and control the qualifications of professional 30 nonteaching school personnel and prescribe standards relating to 31 qualifications. The standards shall not require the business manager of a 32 school district to obtain certification from the state board of education. 33

20. Impose such disciplinary action, including the issuance of a 34 letter of censure, suspension, suspension with conditions or revocation of 35 a certificate, on a finding of immoral or unprofessional conduct. 36

21. Establish an assessment, data gathering and reporting system 37 for pupil performance as prescribed in chapter 7, article 3 of this title. 38

22. Adopt a rule to promote braille literacy pursuant to section 39 15-214. 40

23. Adopt rules prescribing procedures for the investigation by the 41 department of education of every written complaint alleging that a 42 certificated person has engaged in immoral conduct. 43

24. For purposes of federal law, serve as the state board for 44 vocational and technological education and meet at least four times each 45

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year solely to execute the powers and duties of the state board for 1 vocational and technological education. 2

25. Develop and maintain a handbook for use in the schools of this 3 state that provides guidance for the teaching of moral, civic and ethical 4 education. The handbook shall promote existing curriculum frameworks and 5 shall encourage school districts to recognize moral, civic and ethical 6 values within instructional and programmatic educational development 7 programs for the general purpose of instilling character and ethical 8 principles in pupils in kindergarten programs and grades one through 9 twelve. 10

26. Require pupils to recite the following passage from the 11 declaration of independence for pupils in grades four through six at the 12 commencement of the first class of the day in the schools, except that a 13 pupil shall not be required to participate if the pupil or the pupil's 14 parent or guardian objects: 15

We hold these truths to be self-evident, that all men 16 are created equal, that they are endowed by their creator with 17 certain unalienable rights, that among these are life, liberty 18 and the pursuit of happiness. That to secure these rights, 19 governments are instituted among men, deriving their just 20 powers from the consent of the governed. . . . 21 27. Adopt rules that provide for certification reciprocity for 22

certificates issued pursuant to this section. The rules for certification 23 reciprocity shall include a requirement that the applicant possess a 24 comparable valid certification from another state and be in good standing 25 with that other state. An applicant who possesses a valid certification 26 from another state and a fingerprint clearance card pursuant to section 27 15-534 and who is in good standing with that other state shall be issued a 28 comparable standard certificate without any other requirements from the 29 state board of education or the department of education. A person who is 30 issued a certificate pursuant to this paragraph is not required to meet 31 any requirement prescribed in section 15-533. 32

28. Adopt rules that provide for the presentation of an honorary 33 high school diploma to a person who has never obtained a high school 34 diploma and who meets both of the following requirements: 35

(a) Currently resides in this state. 36 (b) Provides documented evidence from the department of veterans' 37

services that the person enlisted in the armed forces of the United States 38 and served in World War I, World War II, the Korean conflict or the 39 Vietnam conflict. 40

29. Cooperate with the Arizona-Mexico commission in the governor's 41 office and with researchers at universities in this state to collect data 42 and conduct projects in the United States and Mexico on issues that are 43 within the scope of the duties of the department of education and that 44 relate to quality of life, trade and economic development in this state in 45

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a manner that will help the Arizona-Mexico commission to assess and 1 enhance the economic competitiveness of this state and of the 2 Arizona-Mexico region. 3

30. Adopt rules to define and provide guidance to schools as to the 4 activities that would constitute immoral or unprofessional conduct of 5 certificated persons. 6

31. Adopt guidelines to encourage pupils in grades nine, ten, 7 eleven and twelve to volunteer for twenty hours of community service 8 before graduation from high school. A school district that complies with 9 the guidelines adopted pursuant to this paragraph is not liable for 10 damages resulting from a pupil's participation in community service unless 11 the school district is found to have demonstrated wanton or reckless 12 disregard for the safety of the pupil and other participants in community 13 service. For the purposes of this paragraph, "community service" may 14 include service learning. The guidelines shall include the following: 15

(a) A list of the general categories in which community service may 16 be performed. 17

(b) A description of the methods by which community service will be 18 monitored. 19

(c) A consideration of risk assessment for community service 20 projects. 21

(d) Orientation and notification procedures of community service 22 opportunities for pupils entering grade nine, including the development of 23 a notification form. The notification form shall be signed by the pupil 24 and the pupil's parent or guardian, except that a pupil shall not be 25 required to participate in community service if the parent or guardian 26 notifies the principal of the pupil's school in writing that the parent or 27 guardian does not wish the pupil to participate in community service. 28

(e) Procedures for a pupil in grade nine to prepare a written 29 proposal that outlines the type of community service that the pupil would 30 like to perform and the goals that the pupil hopes to achieve as a result 31 of community service. The pupil's written proposal shall be reviewed by a 32 faculty advisor, a guidance counselor or any other school employee who is 33 designated as the community service program coordinator for that school. 34 The pupil may alter the written proposal at any time before performing 35 community service. 36

(f) Procedures for a faculty advisor, a guidance counselor or any 37 other school employee who is designated as the community service program 38 coordinator to evaluate and certify the completion of community service 39 performed by pupils. 40

32. To facilitate the transfer of military personnel and their 41 dependents to and from the public schools of this state, pursue, in 42 cooperation with the Arizona board of regents GOVERNING BOARD OF EACH 43 UNIVERSITY, reciprocity agreements with other states concerning the 44

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transfer credits for military personnel and their dependents. A 1 reciprocity agreement entered into pursuant to this paragraph shall: 2

(a) Address procedures for each of the following: 3 (i) The transfer of student records. 4 (ii) Awarding credit for completed coursework. 5 (iii) Permitting a student to satisfy the graduation requirements 6

prescribed in section 15-701.01 through the successful performance on 7 comparable exit-level assessment instruments administered in another 8 state. 9

(b) Include appropriate criteria developed by the state board of 10 education and the Arizona board of regents GOVERNING BOARD OF EACH 11 UNIVERSITY. 12

33. Adopt guidelines that school district governing boards shall 13 use in identifying pupils who are eligible for gifted programs and in 14 providing gifted education programs and services. The state board of 15 education shall adopt any other guidelines and rules that it deems 16 necessary in order to carry out the purposes of chapter 7, article 4.1 of 17 this title. 18

34. For each of the alternative textbook formats of human-voiced 19 audio, large-print and braille, designate alternative media producers to 20 adapt existing standard print textbooks or to provide specialized 21 textbooks, or both, for pupils with disabilities in this state. Each 22 alternative media producer shall be capable of producing alternative 23 textbooks in all relevant subjects in at least one of the alternative 24 textbook formats. The board shall post the designated list of alternative 25 media producers on its website. 26

35. Adopt a list of approved professional development training 27 providers for use by school districts as provided in section 15-107, 28 subsection J. The professional development training providers shall meet 29 the training curriculum requirements determined by the state board of 30 education in at least the areas of school finance, governance, employment, 31 staffing, inventory and human resources, internal controls and 32 procurement. 33

36. Adopt rules to prohibit a person who violates the notification 34 requirements prescribed in section 15-183, subsection C, paragraph 8 or 35 section 15-550, subsection C from certification pursuant to this title 36 until the person is no longer charged or is acquitted of any offenses 37 listed in section 41-1758.03, subsection B. The STATE board shall also 38 adopt rules to prohibit a person who violates the notification 39 requirements, certification surrender requirements or fingerprint 40 clearance card surrender requirements prescribed in section 15-183, 41 subsection C, paragraph 9 or section 15-550, subsection D from 42 certification pursuant to this title for at least ten years after the date 43 of the violation. 44

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37. Adopt rules for the alternative certification of teachers of 1 nontraditional foreign languages that allow for the passing of a 2 nationally accredited test to substitute for the education coursework 3 required for certification. 4

38. Adopt and maintain a model framework for a teacher and 5 principal evaluation instrument that includes quantitative data on student 6 academic progress that accounts for between thirty-three percent and fifty 7 percent of the evaluation outcomes. The framework shall include four 8 performance classifications, designated as highly effective, effective, 9 developing and ineffective, and guidelines for school districts and 10 charter schools to use in their evaluation instruments. The state board 11 of education shall adopt best practices for professional development and 12 evaluator training. The state board of education may periodically make 13 adjustments to align the model framework for teacher and principal 14 evaluations with assessment or data changes at the state level. School 15 districts and charter schools shall use an instrument that meets the data 16 requirements established by the state board of education to annually 17 evaluate individual teachers and principals. School districts and charter 18 schools shall adopt definitions for the performance classifications 19 adopted by the state board of education in a public meeting and apply the 20 performance classifications to their evaluation instruments in a manner 21 designed to improve principal and teacher performance. For charter 22 holders, the principal evaluation instrument applies to each charter 23 school's instructional leader whose primary responsibility is to oversee 24 the academic performance of the charter school. This paragraph does not 25 apply to an officer, director, member or partner of the charter holder. 26 The school district governing board shall discuss at a public meeting at 27 least annually its aggregate performance classifications of principals and 28 teachers. 29

39. Adopt rules to define competency-based educational pathways for 30 college and career readiness that may be used by schools. The rules shall 31 include the following components: 32

(a) The establishment of learning outcomes that will be expected 33 for students in a particular subject. 34

(b) A process and criteria by which assessments may be identified 35 or established to determine if students have reached the desired 36 competencies in a particular subject. 37

(c) A mechanism to allow pupils in grades seven through twelve who 38 have demonstrated competency in a subject to immediately obtain credit for 39 the mastery of that subject. The rules shall include a list of applicable 40 subjects, including the level of competency required for each subject. 41

40. In consultation with the department of health services, the 42 department of education, medical professionals, school health 43 professionals, school administrators and an organization that represents 44

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school nurses in this state, adopt rules that prescribe the following for 1 school districts and charter schools: 2

(a) Annual training in the administration of auto-injectable 3 epinephrine, as directed on the prescription protocol, for designated 4 medical and nonmedical school personnel. The annual training prescribed 5 in this subdivision is optional during any fiscal year in which sufficient 6 monies are not appropriated by the legislature during that fiscal year to 7 provide for the purchase of two juvenile doses and two adult doses of 8 epinephrine auto-injectors at each public school in this state and if the 9 school does not stock two juvenile doses and two adult doses of 10 epinephrine auto-injectors at the school during that fiscal year. 11

(b) Annual training for all school site personnel on the 12 recognition of anaphylactic shock symptoms and the procedures to follow 13 when anaphylactic shock occurs, following the national guidelines of the 14 American academy of pediatrics. The annual training prescribed in this 15 subdivision is optional during any fiscal year in which sufficient monies 16 are not appropriated by the legislature during that fiscal year to provide 17 for the purchase of two juvenile doses and two adult doses of epinephrine 18 auto-injectors at each public school in this state and if the school does 19 not stock two juvenile doses and two adult doses of epinephrine 20 auto-injectors at the school during that fiscal year. 21

(c) Procedures for the administration of epinephrine auto-injectors 22 in emergency situations, as directed on the prescription protocol. 23

(d) Procedures for annually requesting a standing order for 24 epinephrine auto-injectors pursuant to section 15-157 from the chief 25 medical officer of the department of health services, the chief medical 26 officer of a county health department, a doctor of medicine licensed 27 pursuant to title 32, chapter 13 or a doctor of osteopathic medicine 28 licensed pursuant to title 32, chapter 17. 29

(e) Procedures for reporting the use of epinephrine auto-injectors 30 to the department of health services. 31

41. In consultation with the department of education, medical 32 professionals, school health professionals, school administrators and an 33 organization that represents school nurses in this state, adopt rules that 34 prescribe the following for school districts and charter schools that 35 elect to administer inhalers: 36

(a) Annual training in the recognition of respiratory distress 37 symptoms and the procedures to follow when respiratory distress occurs, in 38 accordance with good clinical practice, and the administration of 39 inhalers, as directed on the prescription protocol, by designated medical 40 and nonmedical school personnel. 41

(b) Requirements for school districts and charter schools that 42 elect to administer inhalers to designate at least two employees at each 43 school to be trained in the recognition of respiratory distress symptoms 44 and the procedures to follow when respiratory distress occurs, in 45

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accordance with good clinical practice, and at least two employees at each 1 school to be trained in the administration of inhalers, as directed on the 2 prescription protocol. 3

(c) Procedures for the administration of inhalers in emergency 4 situations, as directed on the prescription protocol. 5

(d) Procedures for annually requesting a standing order for 6 inhalers and spacers or holding chambers pursuant to section 15-158 from 7 the chief medical officer of a county health department, a physician 8 licensed pursuant to title 32, chapter 13 or 17 or a nurse practitioner 9 licensed pursuant to title 32, chapter 15. 10

(e) Procedures for notifying a parent once an inhaler has been 11 administered. 12

B. The state board of education may: 13 1. Contract. 14 2. Sue and be sued. 15 3. Distribute and score the tests prescribed in chapter 7, article 16

3 of this title. 17 4. Provide for an advisory committee to conduct hearings and 18

screenings to determine whether grounds exist to impose disciplinary 19 action against a certificated person, whether grounds exist to reinstate a 20 revoked or surrendered certificate and whether grounds exist to approve or 21 deny an initial application for certification or a request for renewal of 22 a certificate. The board may delegate its responsibility to conduct 23 hearings and screenings to its advisory committee. Hearings shall be 24 conducted pursuant to title 41, chapter 6, article 6. 25

5. Proceed with the disposal of any complaint requesting 26 disciplinary action or with any disciplinary action against a person 27 holding a certificate as prescribed in subsection A, paragraph 14 of this 28 section after the suspension or expiration of the certificate or surrender 29 of the certificate by the holder. 30

6. Assess costs and reasonable attorney fees against a person who 31 files a frivolous complaint or who files a complaint in bad faith. Costs 32 assessed pursuant to this paragraph shall not exceed the expenses incurred 33 by the department of education in the investigation of the complaint. 34

C. Placement decisions of teaching intern certificate holders 35 issued pursuant to subsection A, paragraph 14, subdivision (a) of this 36 section and section 15-552 shall be based on agreements between the 37 teacher preparation provider, the provider's partner organizations and the 38 local education agency. The practices of the department of education and 39 the rules and policies of the state board of education may not restrict 40 placement of teaching intern certification holders based on local 41 education agency instructional models and may only consider the academic 42 quality of the school, the effectiveness of the teaching intern 43 certification holder's on-site mentor and the opportunity for a wide 44

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variety of schools and school models to access teaching intern 1 certification holders. 2


15-211. K-3 reading program; receipt and use of monies; 5 additional funding; report; program termination 6

A. The department of education shall administer a K-3 reading 7 program to improve the reading proficiency of pupils in kindergarten 8 programs and grades one, two and three in the public schools of this 9 state. 10

B. Each school district and charter school shall submit to the 11 department of education a plan for improving the reading proficiency of 12 its pupils in kindergarten programs and grades one, two and three. The 13 plan shall include baseline data on the reading proficiency of its pupils 14 in kindergarten programs and grades one, two and three and a budget for 15 spending monies from both the K-3 support level weight and the K-3 reading 16 support level weight established in section 15-943. Each school district 17 and charter school shall annually submit to the department of education on 18 or before October 1 an updated K-3 reading program plan that includes data 19 on program expenditures and results, except that beginning in fiscal year 20 2016-2017, a school district or charter school that is assigned a letter 21 grade of A or B pursuant to section 15-241 shall submit this plan only in 22 odd-numbered years. 23

C. School districts and charter schools shall use monies generated 24 by the K-3 reading support level weight established in section 15-943 only 25 on instructional purposes intended to improve reading proficiency for 26 pupils in kindergarten programs and grades one, two and three with 27 particular emphasis on pupils in kindergarten programs and grades one and 28 two. 29

D. Each school district and charter school that is assigned a 30 letter grade of C, D or F pursuant to section 15-241 or that has more than 31 ten percent of its pupils in grade three who do not demonstrate sufficient 32 reading skills as established by the state board of education according 33 to the reading portion of the statewide assessment shall receive monies 34 generated by the K-3 reading support level weight established in section 35 15-943 only after the K-3 reading program plan of the school district or 36 charter school has been submitted, reviewed and recommended for approval 37 by the department of education and approved by the state board of 38 education. The state board of education must give approval to a school 39 district or charter school before any portion of the monies generated by 40 the K-3 reading support level weight may be distributed to the school 41 district or charter school pursuant to this subsection. 42

E. Pupils in a charter school that is in its first year of 43 operation and that is sponsored by the state board of education, the state 44 board for charter schools, a PUBLIC university under the jurisdiction of 45

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the Arizona board of regents IN THIS STATE, a community college district 1 or a group of community college districts are eligible for the K-3 reading 2 support level weight. 3

F. The department of education shall solicit gifts, grants and 4 donations from any lawful public or private source in order to provide 5 additional funding for the K-3 reading program. 6

G. The state board of education may establish rules and policies 7 for the K-3 reading program, including: 8

1. The proper use of monies in accordance with subsection C of this 9 section. 10

2. The distribution of monies by the department of education in 11 accordance with subsection B of this section. 12

3. The compliance of reading proficiency plans submitted pursuant 13 to subsection B of this section with section 15-704. 14

H. Pursuant to subsection G of this section, the department of 15 education shall develop program implementation guidance for school 16 districts and charter schools to assist schools in administering an 17 effective K-3 reading program plan. This guidance shall include 18 identifying and recommending appropriate program expenditures, providing 19 technical oversight and assistance for annually updating reading program 20 plans, selecting and adopting evidence-based reading curricula and 21 providing and promoting teacher professional development that is based on 22 evidence-based reading research. The department shall prioritize supports 23 and interventions, including enrollment in reading trainings and 24 professional development, for school districts and charter schools that 25 have the highest percentage of pupils who do not demonstrate sufficient 26 reading skills as established by the state board of education. The 27 department shall deposit any monies received for offering reading 28 trainings or professional development into the department of education 29 professional development revolving fund established by section 15-237.01. 30

I. On or before December 15, the department of education shall 31 submit an annual report on the K-3 reading program to the governor, the 32 president of the senate and the speaker of the house of representatives 33 and shall provide a copy of this annual report to the secretary of state, 34 the state board of education and the chairpersons of the education 35 committees of the senate and the house of representatives. The report 36 shall contain all of the following: 37

1. Information on the improvement of K-3 reading in this state, 38 including achievement data statewide and achievement data at the school 39 district and charter school level. The information pursuant to this 40 paragraph shall include data and information on continued proficiency on 41 the statewide assessment in subsequent grades. 42

2. A description of the activities of the department to support 43 school districts and charter schools in improving K-3 reading. 44

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3. Specific findings on methods by which the department may 1 continue to improve support and assistance for school districts and 2 charter schools in the administration of K-3 reading program plans. 3

4. Information and data on K-3 reading program plans throughout 4 this state and the expenditure of K-3 reading monies by school districts 5 and charter schools. 6

5. Data reported pursuant to section 15-701, subsection A, 7 paragraph 2, subdivision (d). 8

J. The program established by this section ends on July 1, 2022 9 pursuant to section 41-3102. 10


15-249.01. Data governance commission; membership; terms; 13 duties; commission termination 14

A. The data governance commission is established in the department 15 of education consisting of: 16

1. The chief technology managers, or the managers' designees, of 17 each of the PUBLIC universities under the jurisdiction of the Arizona 18 board of regents IN THIS STATE. 19

2. The chief technology manager, or the manager's designee, of a 20 community college district located in a county with a population of eight 21 hundred thousand persons or more who has expertise in technology and who 22 is appointed by the governor. 23

3. The chief technology manager, or the manager's designee, of a 24 community college district located in a county with a population of less 25 than eight hundred thousand persons who has expertise in technology and 26 who is appointed by the governor. 27

4. The chief executive officer of the Arizona early childhood 28 development and health board or the chief executive officer's designee. 29

5. An officer or employee of a school district located in a county 30 with a population of eight hundred thousand persons or more who has 31 expertise in technology and who is appointed by the governor. 32

6. An officer or employee of a school district located in a county 33 with a population of less than eight hundred thousand persons who has 34 expertise in technology and who is appointed by the governor. 35

7. An officer or employee of a charter school located in a county 36 with a population of eight hundred thousand persons or more who has 37 expertise in technology and who is appointed by the president of the 38 senate. 39

8. An officer or employee of a charter school located in a county 40 with a population of less than eight hundred thousand persons who has 41 expertise in technology and who is appointed by the speaker of the house 42 of representatives. 43

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9. Two representatives of the business community, one of whom is 1 appointed by the president of the senate and one of whom is appointed by 2 the speaker of the house of representatives. 3

10. The director of the department of administration or the 4 director's designee. 5

11. The superintendent of public instruction or the 6 superintendent's designee. 7

B. The initial appointed members shall assign themselves by lot to 8 terms of two, three and four years in office. All subsequent appointed 9 members of the commission shall serve four-year terms. The chairperson 10 shall notify the governor, the speaker of the house of representatives and 11 the president of the senate on appointments of these terms. Members of 12 the commission shall elect a chairperson from among the members of the 13 commission. Members of the commission shall not receive compensation. 14 The department of education shall provide adequate staff support for the 15 commission. 16

C. The commission shall identify, examine and evaluate the needs of 17 public institutions that provide instruction to pupils in preschool 18 programs, kindergarten programs, grades one through twelve and 19 postsecondary programs in Arizona and shall: 20

1. Establish guidelines related to the following: 21 (a) Managed data access. 22 (b) Technology. 23 (c) Privacy and security. 24 (d) Adequacy of training. 25 (e) Adequacy of data model implementation. 26 (f) Prioritization of funding opportunities. 27 (g) Resolution of data conflicts. 28 (h) The form and format of data elements that are required for 29

state and federal reporting and interagency data sharing. 30 2. Provide recommendations on technology spending. 31 3. Provide analyses and recommendations of the following: 32 (a) The control of data confidentiality and data security for 33

stored data and data in transmission. 34 (b) Access privileges and access management. 35 (c) Data audit management, including data quality metrics, 36

sanctions and incentives for data quality improvement. 37 (d) Data standards for stored data and data in transmission, 38

including rules for definition, format, source, provenance, element level 39 and contextual integrity. 40

(e) Documentation standards for data elements and systems 41 components. 42

(f) Data archival and retrieval management systems, including 43 change control and change tracking. 44

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(g) Publication of standard and ad hoc reports for state and local 1 level use on student achievement. 2

(h) Publication of implementation timelines and progress. 3 4. Ensure that the guidelines and recommendations adopted pursuant 4

to this subsection reduce duplication and administrative requirements for 5 public schools, postsecondary institutions and public agencies. 6

5. Submit an annual report on or before December 1 regarding the 7 commission's activities to the governor, the speaker of the house of 8 representatives and the president of the senate. The data governance 9 commission shall provide copies of this report to the secretary of state. 10

D. The commission established by this section ends on July 1, 2020 11 pursuant to section 41-3103. 12


15-249.06. College credit by examination incentive program; 15 incentive bonuses; report; program termination 16

A. The college credit by examination incentive program is 17 established within the department of education to provide an incentive 18 bonus to teachers, school districts and charter schools for students who 19 obtain a passing score on a qualifying examination for college credit 20 while in high school. 21

B. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY 22 shall maintain a list of qualifying examinations that a high school 23 student may take in order to receive college credit in mathematics, 24 English language arts or science from any THAT university under the 25 jurisdiction of the Arizona board of regents and the passing scores 26 required on those examinations in order to receive college credit. On or 27 before September 1 of each year, the Arizona board of regents GOVERNING 28 BOARD OF EACH UNIVERSITY shall provide the list of qualifying examinations 29 and passing scores to the department of education and shall submit this 30 list to the joint legislative budget committee for review. 31

C. Beginning in fiscal year 2017-2018, the department of education 32 shall pay an incentive bonus to school districts and charter schools for 33 each student in grades nine through twelve who receives a passing score 34 during the previous fiscal year on a qualifying examination identified by 35 the Arizona board of regents GOVERNING BOARD OF A UNIVERSITY pursuant to 36 subsection B of this section. A student who receives a passing score on a 37 qualifying examination and who is enrolled in a school where fifty percent 38 or more of the students are eligible for free or reduced price lunches 39 shall generate for the school district or charter school a bonus of four 40 hundred fifty dollars per passing score on a qualifying examination. A 41 student who receives a passing score on a qualifying examination and who 42 is enrolled in a school where less than fifty percent of the students are 43 eligible for free or reduced price lunches shall generate for the school 44 district or charter school a bonus of three hundred dollars per passing 45

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score on a qualifying examination. If the statewide sum of per student 1 bonuses awarded pursuant to this subsection exceeds the amount of 2 available monies appropriated for incentive bonuses, the bonus monies 3 shall be reduced proportionally to cover all eligible bonus awards. 4

D. A school district or charter school that receives an incentive 5 bonus pursuant to this section shall distribute at least fifty percent of 6 the bonus monies to the associated classroom teacher for each student who 7 passes a qualifying examination. Bonus monies awarded to a teacher 8 pursuant to this subsection shall be in addition to any regular wage, 9 compensation or other bonus the teacher receives or is scheduled to 10 receive. The remainder of any bonus monies received by a school district 11 or charter school shall be used for teacher professional development or 12 student instructional support or materials. Any bonus monies received by 13 a school district or charter school pursuant to this subsection shall be 14 separately accounted for in the school district's or charter school's 15 annual financial report. 16

E. Incentive bonuses distributed to and any bonus monies received 17 by a school district or charter school pursuant to this section are not 18 subject to collective bargaining. 19

F. On or before December 15, 2018 and on or before December 15 of 20 each year thereafter, the department of education shall submit to the 21 president of the senate, the speaker of the house of representatives, the 22 governor and the secretary of state and to the joint legislative budget 23 committee for review a report on all of the following: 24

1. The number of students who took a qualifying examination at each 25 school. 26

2. The number of students who received a passing score on a 27 qualifying examination and the number of incentive bonus awards 28 distributed. 29

3. The number and types of qualifying examinations taken by 30 students. 31

4. The amount of bonus monies received by each school. 32 G. Incentive bonuses distributed to and any bonus monies received 33

by a teacher are not compensation as defined in section 38-711. 34 H. The program established by this section ends on July 1, 2026 35

pursuant to section 41-3102. 36 Sec. 29. Section 15-532, Arizona Revised Statutes, is amended to 37

read: 38 15-532. Examination on state and United States constitutions; 39

reciprocity requirement; exemption; 40 intergovernmental agreement or contract for 41 administration and evaluation 42

A. A person who is applying for a certificate authorizing the 43 person to become a teacher in a school, in addition to fingerprinting and 44 other requirements, shall either complete the required classes or pass a 45

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satisfactory examination on the provisions and principles of the 1 Constitutions of the United States and Arizona. 2

B. A person who has not met the requirements of this section at the 3 time application is made but who has met all other requirements shall be 4 granted a certificate for at least three years, except that a person who 5 has not met the requirements of this section but who has met all other 6 requirements and who applies for a certificate authorizing the person to 7 teach an academic course that focuses predominantly on history, 8 government, social studies, citizenship, law or civics shall be granted a 9 certificate for not more than one year. No additional certificate may be 10 granted until all requirements have been fulfilled as provided by the 11 regulations of the state board of education governing certification of 12 teachers. A person who is applying for reciprocity pursuant to section 13 15-203, subsection A, paragraph 27 shall be issued a standard TEACHING 14 certificate and demonstrate completion of the requirements pursuant to the 15 timelines established in this section. The department of education or 16 state board of education may temporarily suspend the standard TEACHING 17 certificate of a person who fails to meet the requirements of this section 18 within the prescribed time frames. A certificate that is temporarily 19 suspended pursuant to this subsection is not considered a disciplinary 20 action and a person shall be allowed to correct the deficiency within the 21 remaining time of the standard certification. 22

C. A noncertified person, qualified under the federal and state 23 plans for vocational education, shall be exempt from this section for the 24 purpose of acting as an instructor for special adult and evening classes. 25

D. The state board of education may enter into intergovernmental 26 agreements or contracts pursuant to title 11, chapter 7, article 3 for the 27 administration and evaluation of the examination on the provisions and 28 principles of the Constitutions of the United States and Arizona. 29 Notwithstanding section 15-531, the intergovernmental agreement or 30 contract shall specify the fee for the administration and evaluation of 31 the examination and may provide for the retention of all or part of the 32 monies by the contractor administering and evaluating the examination. 33

E. A PUBLIC university under the jurisdiction of the Arizona board 34 of regents IN THIS STATE shall offer the classes required by this section 35 to students who are pursuing a bachelor of arts degree in education or a 36 bachelor of science degree in education at that university. 37

Sec. 30. Section 15-701.01, Arizona Revised Statutes, as amended by 38 Laws 2015, chapter 1, section 1, chapter 127, section 1 and chapter 145, 39 section 1, is amended to read: 40

15-701.01. High school; graduation; requirements; community 41 college or university courses; transfer from 42 other schools; academic credit 43

A. The state board of education shall: 44

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1. Prescribe a minimum course of study, as defined in section 1 15-101 and incorporating the academic standards adopted by the state board 2 of education, for the graduation of pupils from high school. 3

2. Prescribe competency requirements for the graduation of pupils 4 from high school incorporating the academic standards in at least the 5 areas of reading, writing, mathematics, science and social studies. The 6 academic standards prescribed by the state board of education in social 7 studies shall include personal finance. This paragraph does not allow the 8 state board of education to establish a required separate personal finance 9 course for the purpose of the graduation of pupils from high school. 10 Beginning in the 2016-2017 school year, the competency requirements for 11 social studies shall include a requirement that, in order to graduate from 12 high school or obtain a high school equivalency diploma, a pupil must 13 correctly answer at least sixty of the one hundred questions listed on a 14 test that is identical to the civics portion of the naturalization test 15 used by the United States citizenship and immigration services. A 16 district school or charter school shall document on the pupil's transcript 17 that the pupil has passed a test that is identical to the civics portion 18 of the naturalization test used by the United States citizenship and 19 immigration services as required by this section. 20

3. Develop and adopt competency tests pursuant to section 15-741. 21 English language learners who are subject to article 3.1 of this chapter 22 are subject to the assessments prescribed in section 15-741. 23

B. The governing board of a school district shall: 24 1. Prescribe curricula that include the academic standards in the 25

required subject areas pursuant to subsection A, paragraph 1 of this 26 section. 27

2. Prescribe criteria for the graduation of pupils from the high 28 schools in the school district. These criteria shall include 29 accomplishment of the academic standards in at least reading, writing, 30 mathematics, science and social studies, as determined by district 31 assessment. Other criteria may include additional measures of academic 32 achievement and attendance. Pursuant to the prescribed graduation 33 requirements adopted by the state board of education, the governing board 34 may approve a rigorous computer science course that would fulfill a 35 mathematics course required for graduation from high school. The 36 governing board may approve a rigorous computer science course only if the 37 rigorous computer science course includes significant mathematics content 38 and the governing board determines the high school where the rigorous 39 computer science course is offered has sufficient capacity, infrastructure 40 and qualified staff, including competent teachers of computer science. 41 The school district governing board or charter school governing body may 42 determine the method and manner in which to administer a test that is 43 identical to the civics portion of the naturalization test used by the 44 United States citizenship and immigration services. A pupil who does not 45

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obtain a passing score on the test that is identical to the civics portion 1 of the naturalization test may retake the test until the pupil obtains a 2 passing score. 3

C. The governing board may prescribe the course of study and 4 competency requirements for the graduation of pupils from high school that 5 are in addition to or higher than the course of study and competency 6 requirements that the state board prescribes. 7

D. The governing board may prescribe competency requirements for 8 the passage of pupils in courses that are required for graduation from 9 high school. 10

E. A teacher shall determine whether to pass or fail a pupil in a 11 course in high school as provided in section 15-521, paragraph 4 on the 12 basis of the competency requirements, if any have been prescribed. The 13 governing board, if it reviews the decision of a teacher to pass or fail a 14 pupil in a course in high school as provided in section 15-342, paragraph 15 11, shall base its decision on the competency requirements, if any have 16 been prescribed. 17

F. Graduation requirements established by the governing board may 18 be met by a pupil who passes courses in the required or elective subjects 19 at a community college or university, if the course is at a higher level 20 than the course taught in the high school attended by the pupil or, if the 21 course is not taught in the high school, the level of the course is equal 22 to or higher than the level of a high school course. The governing board 23 shall determine if the subject matter of the community college or 24 university course is appropriate to the specific requirement the pupil 25 intends it to fulfill and if the level of the community college or 26 university course is less than, equal to or higher than a high school 27 course, and the governing board shall award one-half of a Carnegie unit 28 for each three semester hours of credit THAT the pupil earns in an 29 appropriate community college or university course. If a pupil is not 30 satisfied with the decision of the governing board regarding the amount of 31 credit granted or the subjects for which credit is granted, the pupil may 32 request that the state board of education review the decision of the 33 governing board, and the state board shall make the final determination of 34 the amount of credit to be given the pupil and for which subjects. The 35 governing board shall not limit the number of credits that is required for 36 high school graduation and that may be met by taking community college or 37 university courses. For the purposes of this subsection: 38

1. "Community college" means an educational institution that is 39 operated by a community college district as defined in section 15-1401 or 40 a postsecondary educational institution under the jurisdiction of an 41 Indian tribe recognized by the United States department of the interior. 42

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2. "University" means a PUBLIC university under the jurisdiction of 1 the Arizona board of regents IN THIS STATE. 2

G. A pupil who transfers from a private school shall be provided 3 with a list that indicates those credits that have been accepted and 4 denied by the school district. A pupil may request to take an examination 5 in each particular course in which credit has been denied. The school 6 district shall accept the credit for each particular course in which the 7 pupil takes an examination and receives a passing score on a test designed 8 and evaluated by a teacher in the school district who teaches the subject 9 matter on which the examination is based. In addition to the above 10 requirements, the governing board of a school district may prescribe 11 requirements for the acceptance of the credits of pupils who transfer from 12 a private school. 13

H. If a pupil who was previously enrolled in a charter school or 14 school district enrolls in a school district in this state, the school 15 district shall accept credits earned by the pupil in courses or 16 instructional programs at the charter school or school district. The 17 governing board of a school district may adopt a policy concerning the 18 application of transfer credits for the purpose of determining whether a 19 credit earned by a pupil who was previously enrolled in a school district 20 or charter school will be assigned as an elective or core credit. 21

I. A pupil who transfers credit from a charter school, A school 22 district or Arizona online instruction shall be provided with a list that 23 indicates which credits have been accepted as an elective credit CREDITS 24 and which credits have been accepted as a core credit CREDITS by the 25 school district or charter school. Within ten school days after receiving 26 the list, a THE pupil may request to take an examination in each 27 particular course in which core credit has been denied. The school 28 district or charter school shall accept the credit as a core credit for 29 each particular course in which the pupil takes an examination and 30 receives a passing score on a test, THAT IS aligned to the competency 31 requirements adopted pursuant to this section, AND THAT IS designed and 32 evaluated by a teacher in the school district or charter school who 33 teaches the subject matter on which the examination is based. If a pupil 34 is enrolled in a school district or charter school and that pupil also 35 participates in Arizona online instruction between May 1 and July 31, the 36 school district or charter school shall not require proof of payment as a 37 condition of the school district or charter school accepting credits 38 earned from the online course provider. 39

J. The state board of education shall adopt rules to allow high 40 school pupils who can demonstrate competency in a particular academic 41 course or subject to obtain academic credit for the course or subject 42 without enrolling in the course or subject. 43

K. Pupils who earn a Grand Canyon diploma pursuant to article 6 of 44 this chapter are exempt from the graduation requirements prescribed in 45

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this section. Pupils who earn a Grand Canyon diploma are entitled to all 1 the rights and privileges of persons who graduate with a high school 2 diploma issued pursuant to this section, including access to postsecondary 3 scholarships and other forms of student financial aid and access to all 4 forms of postsecondary education. Notwithstanding any other law, a pupil 5 who is eligible for a Grand Canyon diploma may elect to remain in high 6 school through grade twelve and shall not be prevented from enrolling at a 7 high school after the pupil becomes eligible for a Grand Canyon diploma. 8 A pupil who is eligible for a Grand Canyon diploma and who elects not to 9 pursue one of the options prescribed in section 15-792.03 may only be 10 readmitted to that high school or another high school in this state 11 pursuant to policies adopted by the school district of readmission. 12

Sec. 31. Repeal 13 Section 15-701.01, Arizona Revised Statutes, as amended by Laws 14

2017, chapter 210, section 4, is repealed. 15 Sec. 32. Section 15-792.03, Arizona Revised Statutes, is amended to 16

read: 17 15-792.03. Grand Canyon diploma 18 A. The private organization selected pursuant to section 15-792.02 19

shall develop the Grand Canyon diploma to be approved and adopted by the 20 state board of education. School districts and charter schools in this 21 state may choose to offer a Grand Canyon diploma beginning in the 22 2012-2013 school year. A high school student who is enrolled in a school 23 district or charter school that offers a Grand Canyon diploma may choose 24 to pursue a Grand Canyon diploma. 25

B. Students are eligible for the Grand Canyon diploma and may be 26 awarded the Grand Canyon diploma at the end of grade ten or during or at 27 the end of grade eleven or twelve if the students meet the criteria. 28 Students who elect to pursue a Grand Canyon diploma shall participate in a 29 board examination system that consists of internationally benchmarked 30 instructional programs of study chosen by an interstate compact on board 31 examination systems. 32

C. Students who are eligible for a Grand Canyon diploma shall have 33 multiple pathways available to them and may: 34

1. Enroll the following semester in a community college under the 35 jurisdiction of a community college district in this state. Community 36 colleges under the jurisdiction of a community college district in this 37 state shall admit students who obtain a Grand Canyon diploma and who 38 otherwise meet the qualifications for admission. The school district or 39 charter school from which the student earned the Grand Canyon diploma 40 shall include that student in the school district's or charter school's 41 average daily membership and shall continue to receive per pupil funding 42 for a student who earns a Grand Canyon diploma until that student would 43 otherwise have graduated at the end of grade twelve, as long as that 44 student is enrolled as a full-time student in a community college under 45

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the jurisdiction of a community college district in this state. The 1 school district or charter school shall subtract twenty per cent PERCENT 2 of its average daily membership amount and reimburse the community college 3 if the student has earned a Grand Canyon diploma and is attending a 4 community college as a full-time student. If the student attends 5 community college on a community college campus, the school district or 6 charter school shall reimburse the community college district for the 7 amount of operating and capital outlay full-time student equivalency 8 monies. For the purposes of this paragraph, the amount of operating 9 full-time student equivalency monies shall be equivalent to the average 10 appropriation per full-time student equivalent for all community college 11 districts as calculated pursuant to section 15-1466, subsection C, 12 paragraph 2. Fifty per cent PERCENT of the remaining balance of the per 13 pupil funding shall be used for teacher and pupil incentives, including 14 scholarship programs, to offset the costs of board examinations and to 15 provide customized programs of assistance for students who do not pass the 16 board examinations. The other fifty per cent PERCENT shall be used for 17 maintenance and operations, including capital. Under this paragraph, a 18 student who earns a Grand Canyon diploma is responsible for tuition. A 19 student who earns a Grand Canyon diploma may enroll in community college 20 courses offered on a community college campus or a high school campus, or 21 both. Notwithstanding any other law, community college districts shall 22 not classify a student who remains in high school pursuant to this 23 paragraph as a full-time equivalent student. Students who take courses on 24 high school campuses pursuant to this paragraph shall be eligible to 25 participate in extracurricular activities, including interscholastic 26 sports, through the end of grade twelve. The expenditure by community 27 college districts of payments from the school district or charter school 28 to the community colleges under this section shall not be included under 29 the district expenditure limitation prescribed pursuant to article IX, 30 section 21, Constitution of Arizona. If the instruction provided under 31 this paragraph is offered on a community college campus, the funding and 32 implementation mechanics between the school district or charter school and 33 the community college shall be determined by agreement between the school 34 district or charter school and the community college. 35

2. Remain in high school and enroll in additional advanced 36 preparation board examination programs that are designed to prepare those 37 students for admission to selective postsecondary institutions that offer 38 baccalaureate degree programs. These board examination programs shall be 39 selected from a list approved by an interstate compact for board 40 examination systems. The school district or charter school from which the 41 student became eligible for the Grand Canyon diploma shall include that 42 student in the school district's or charter school's average daily 43 membership and shall continue to receive per pupil funding for a student 44 who is eligible for a Grand Canyon diploma until that student would 45

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otherwise have graduated at the end of grade twelve, as long as that 1 student is enrolled in approved advanced preparation board examination 2 programs at that school district or charter school. Students who elect to 3 remain in high school pursuant to this paragraph shall not be prevented 4 from enrolling at a high school after the pupil becomes eligible for a 5 Grand Canyon diploma and shall be eligible to participate in 6 extracurricular activities, including interscholastic sports, through the 7 end of grade twelve. 8

3. Enroll in a full-time career and technical education program 9 offered on a high school campus or a joint technical education district 10 campus, or any combination of these campuses. Students who elect to 11 remain in high school pursuant to this paragraph shall not be prevented 12 from enrolling at a high school after the pupil becomes eligible for a 13 Grand Canyon diploma and shall be eligible to participate in 14 extracurricular activities, including interscholastic sports, through the 15 end of grade twelve. The school district or charter school from which the 16 student became eligible for the Grand Canyon diploma shall include that 17 student in the school district's or charter school's average daily 18 membership and shall continue to receive per pupil funding for a student 19 who is eligible for a Grand Canyon diploma until that student would 20 otherwise have graduated at the end of grade twelve, as long as that 21 student is enrolled in an approved full-time career and technical 22 education program. Notwithstanding any other law, if the instruction 23 provided under this paragraph is provided by a joint technical education 24 district in a full-time career and technical education program that is 25 designed to lead to a certificate that is awarded by an industry or 26 recognized as meeting industry standards, the sum of the average daily 27 membership for that pupil shall not exceed 1.25, and the average daily 28 membership shall be apportioned at 1.0 for the joint technical education 29 district and 0.25 for the school district. 30

4. Remain in high school without completing the next level of board 31 examination systems and participate in programs of study available to the 32 students through the school district or charter school. The school 33 district or charter school will continue to include the students in the 34 school district's or charter school's count and shall continue to receive 35 per pupil funding for the students until those students would have 36 otherwise graduated at the end of grade twelve, as long as those students 37 are enrolled in approved programs of study at that school district or 38 charter school. Students who elect to remain in high school pursuant to 39 this paragraph shall be eligible to participate in extracurricular 40 activities, including interscholastic sports. 41

5. If accepted for admission to a PUBLIC university under the 42 jurisdiction of the Arizona board of regents IN THIS STATE, enroll in the 43 university after completion of additional high school coursework designed 44 to prepare students for admission to selective postsecondary institutions 45

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that offer baccalaureate degrees. The school district or charter school 1 from which the student earned the Grand Canyon diploma shall include that 2 student in the school district's or charter school's average daily 3 membership and shall continue to receive per pupil funding for a student 4 who earns a Grand Canyon diploma until that student would otherwise have 5 graduated at the end of grade twelve for as long as that student is 6 enrolled as a full-time student in the university. One-third of the 7 school district's or charter school's average daily membership amount 8 shall be retained by the school district or the operator of the charter 9 school. One-third of the school district's or charter school's average 10 daily membership amount shall be retained for use at the school site. 11 One-third of the school district's or charter school's average daily 12 membership amount shall be distributed as follows: 13

(a) One-half shall be deposited in a scholarship account 14 established and managed by the school district from which the student 15 graduated specifically for a student who qualifies for the Grand Canyon 16 diploma and who attends a PUBLIC university under the jurisdiction of the 17 Arizona board of regents IN THIS STATE as a full-time student. 18

(b) One-half shall be retained by the university where the student 19 is enrolled. 20

D. Students who pursue but do not meet the eligibility requirements 21 for a Grand Canyon diploma at the end of grade ten or eleven shall receive 22 a customized program of assistance during the next school year that 23 addresses areas in which the student demonstrated deficiencies in the 24 approved board examinations. These students may retake the board 25 examinations at the next available examination administration. Students 26 may choose to return to a traditional academic program without completing 27 the board examination system curriculum. 28

E. The private organization selected pursuant to section 15-792.02 29 shall develop detailed requirements for students to become eligible for 30 the Grand Canyon diploma, as approved and adopted by the state board of 31 education, that include at least the following: 32

1. Demonstrated skills and knowledge in English and mathematical 33 literacy to be successful in college level courses offered by the 34 community colleges in this state that count toward a degree or certificate 35 without taking remedial or developmental coursework as determined by an 36 interstate compact on board examination systems. 37

2. Satisfactory grades on approved board examinations in subjects 38 determined to be necessary to prepare a student to enter community college 39 without remedial or developmental coursework and that do not include 40 coursework required exclusively for entry into an institution that awards 41 baccalaureate degrees. 42

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15-795.01. Competency-based college-ready educational 3 pathways 4

In accordance with the rules adopted by the state board of education 5 pursuant to section 15-203, subsection A, paragraph 39, students who are 6 eligible for a high school diploma through the fulfillment of a defined 7 competency-based college-ready educational pathway shall have multiple 8 pathways available to them and may: 9

1. Enroll the following fall semester in a community college under 10 the jurisdiction of a community college district in this state. Community 11 colleges under the jurisdiction of a community college district in this 12 state shall admit students who obtain a high school diploma through the 13 fulfillment of a defined competency-based educational pathway and who 14 otherwise meet the qualifications for admission. The school district or 15 charter school from which the student earned the high school diploma shall 16 include that student in the school district's or charter school's student 17 count and shall continue to receive per pupil funding for a student who 18 earns a high school diploma until that student would otherwise have 19 graduated at the end of grade twelve, as long as that student is enrolled 20 as a full-time student in a community college under the jurisdiction of a 21 community college district in this state. The school district or charter 22 school shall subtract twenty per cent PERCENT of its average daily 23 membership amount and reimburse the community college if the student has 24 earned a high school diploma and is attending a community college as a 25 full-time student. If the student attends community college on a 26 community college campus, the school district or charter school shall 27 reimburse the community college district for the amount of operating and 28 capital outlay full-time student equivalency monies. For the purposes of 29 this paragraph, the amount of operating full-time student equivalency 30 monies shall be equivalent to the average appropriation per full-time 31 student equivalent for all community college districts as calculated 32 pursuant to section 15-1466, subsection C, paragraph 2. Fifty per cent 33 PERCENT of the remaining balance of the per pupil funding shall be used 34 for teacher and pupil incentives, including scholarship programs, to 35 offset the costs of competency-based pathways and to provide customized 36 programs of assistance for students who do not demonstrate mastery. The 37 other fifty per cent PERCENT shall be used for maintenance and operations, 38 including capital. Under this paragraph, a student who earns a high 39 school diploma is responsible for tuition. A student who earns a high 40 school diploma may enroll in community college courses offered on a 41 community college campus or a high school campus, or both. 42 Notwithstanding any other law, community college districts shall not 43 classify a student who remains in high school pursuant to this paragraph 44 as a full-time equivalent student. Students who take courses on high 45

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school campuses pursuant to this paragraph shall be eligible to 1 participate in extracurricular activities, including interscholastic 2 sports, through the end of grade twelve. The expenditure by community 3 college districts of payments from the school district or charter school 4 to the community colleges under this section shall not be included under 5 the district expenditure limitation prescribed pursuant to article IX, 6 section 21, Constitution of Arizona. If the instruction provided under 7 this paragraph is offered on a community college campus, the funding and 8 implementation mechanics between the school district or charter school and 9 the community college shall be determined by agreement between the school 10 district or charter school and the community college. 11

2. Remain in high school and participate in programs of study 12 available to students through the school district or charter school. The 13 school district or charter school shall continue to include that student 14 in the school district's or charter school's student count and shall 15 continue to receive per pupil funding for a student who is eligible for a 16 high school diploma until that student would otherwise have graduated at 17 the end of grade twelve, as long as that student is enrolled in approved 18 advanced preparation programs of study at that school district or charter 19 school. Students who elect to remain in high school pursuant to this 20 paragraph shall not be prevented from enrolling at a high school after the 21 student becomes eligible for a high school diploma and shall be eligible 22 to participate in extracurricular activities, including interscholastic 23 sports, through the end of grade twelve. 24

3. Enroll in a full-time career and technical education program 25 offered on a high school campus or a joint technical education district 26 campus, or any combination of these campuses. A student who elects to 27 remain in high school pursuant to this paragraph shall not be prevented 28 from enrolling at a high school after the pupil becomes eligible for a 29 high school diploma and shall be eligible to participate in 30 extracurricular activities, including interscholastic sports, through the 31 end of grade twelve. The school district or charter school from which the 32 student became eligible for the high school diploma shall include that 33 student in the school district's or charter school's student count and 34 shall continue to receive per pupil funding for a student who is eligible 35 for a high school diploma until that student would otherwise have 36 graduated at the end of grade twelve, as long as that student is enrolled 37 in an approved full-time career and technical education program. 38 Notwithstanding any other law, if the instruction provided under this 39 paragraph is provided by a joint technical education district in a 40 full-time career and technical education program that is designed to lead 41 to a certificate that is awarded by an industry or recognized as meeting 42 industry standards, the sum of the average daily membership for that pupil 43 shall not exceed 1.25, and the average daily membership shall be 44

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apportioned at 1.0 for the joint technical education district and 0.25 for 1 the school district. 2

4. If accepted for admission to a PUBLIC university under the 3 jurisdiction of the Arizona board of regents IN THIS STATE, enroll in the 4 university after completion of additional high school coursework designed 5 to prepare students for admission to selective postsecondary institutions 6 that offer baccalaureate degrees. The school district or charter school 7 from which the student earned the high school diploma shall include that 8 student in the school district's or charter school's student count and 9 shall continue to receive per pupil funding for a student who earns a high 10 school diploma until that student would otherwise have graduated at the 11 end of grade twelve for as long as that student is enrolled as a full-time 12 student in the university. One-third of the school district's or charter 13 school's average daily membership amount shall be retained by the school 14 district or the operator of the charter school. One-third of the school 15 district's or charter school's average daily membership amount shall be 16 retained for use at the school site. One-third of the school district's 17 or charter school's average daily membership amount shall be distributed 18 as follows: 19

(a) Fifty per cent PERCENT of this amount shall be deposited in a 20 scholarship account established and managed by the school district or 21 charter school from which the student graduated specifically for a student 22 who qualifies for a diploma and who attends a PUBLIC university under the 23 jurisdiction of the Arizona board of regents IN THIS STATE as a full-time 24 student. 25

(b) Fifty per cent PERCENT of this amount shall be retained by the 26 university where the student is enrolled. 27


15-901.07. Concurrent coursework; calculation of average 30 daily membership; definition 31

A. A school district or a charter school may include students 32 enrolled in concurrent coursework for the purposes of calculating average 33 daily membership if the school district has received approval from the 34 state board of education or the charter school has received approval from 35 its sponsor to offer concurrent coursework and all of the following apply: 36

1. A student earns at least three semester hours of credit per 37 semester in the community college or university course. 38

2. A student is awarded academic credit by the school district or 39 charter school for the concurrent coursework pursuant to section 40 15-701.01. 41

3. The concurrent coursework is at a higher level than the course 42 taught at the school district or charter school in grades nine through 43 twelve. 44

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4. A student who is enrolled in concurrent coursework also attends 1 at least one course offered at the school district or charter school per 2 semester. 3

5. The concurrent coursework is applicable to an established 4 community college academic degree or certificate program that is 5 transferable to a PUBLIC university under the jurisdiction of the Arizona 6 board of regents IN THIS STATE. Concurrent coursework that is applicable 7 to a community college occupational degree or certificate program may be 8 transferable to a PUBLIC university under the jurisdiction of the Arizona 9 board of regents IN THIS STATE. 10

6. The school district or charter school pays the community college 11 or university for the tuition cost of the concurrent coursework or 12 reimburses the student for the tuition cost of the concurrent coursework. 13

B. A course at a community college or university of three semester 14 hours of credit or more is considered a subject for the purposes of 15 meeting the definition of full-time student prescribed in section 15-901. 16 A course at a community college or university of three semester hours of 17 credit or more is not required to meet one hundred twenty-three hours a 18 year, or the equivalent, to be considered a subject. 19

C. Instructional hours provided by a community college or 20 university to a student in concurrent coursework shall be included in the 21 calculation of the average daily membership for that student pursuant to 22 section 15-901. 23

D. Notwithstanding the subject requirements prescribed in section 24 15-901, the hours in which a student who is enrolled in concurrent 25 coursework attends a high school shall be included in the calculation of 26 the average daily membership for that student. 27

E. Average daily membership shall be based on the combined hours 28 that the student is enrolled in at the school district or charter school 29 and at the community college or university. Average daily membership 30 shall be calculated by dividing the combined hours by seven hundred 31 twenty, except that if a student in grade nine through twelve participates 32 in Arizona online instruction, average daily membership shall be 33 calculated by dividing the combined hours by nine hundred. Except as 34 otherwise provided by law, for a full-time high school student who attends 35 concurrent enrollment courses pursuant to this section, the average daily 36 membership may not exceed 1.0. 37

F. For the purposes of this section, "concurrent coursework" means 38 courses at a community college under the jurisdiction of a community 39 college district in this state or at a university under the jurisdiction 40 of the Arizona board of regents in the required or elective subjects that 41 satisfy high school graduation requirements pursuant to section 15-701.01. 42

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15-1042. Student level data; timeline for submittal; 3 confidentiality; definition 4

A. The department of education shall notify school districts, joint 5 technical education districts and charter schools of electronic data 6 submission procedures and shall distribute a list of the specific student 7 level data elements, including the statutory or regulatory reference for 8 each data element, that school districts, joint technical education 9 districts and charter schools are required to submit. The department of 10 education shall not make any changes to the student level data elements to 11 be collected unless the student level data element has been reviewed and 12 adopted by the data governance commission established by section 13 15-249.01. 14

B. Each school district, joint technical education district and 15 charter school shall submit electronic data on a school by school 16 SCHOOL-BY-SCHOOL basis, including student level data, to the department of 17 education in order for the school district, joint technical education 18 district or charter school to receive monies for the cost of educating 19 students pursuant to this title. 20

C. The department of education shall grant a school district, joint 21 technical education district or charter school an extension to the 22 deadline for the submission of student level data or may provide for an 23 alternative method for the submission of student level data if the school 24 district, joint technical education district or charter school proves that 25 good cause exists for the extension, and the school district, joint 26 technical education district or charter school shall continue to receive 27 monies for the cost of educating students pursuant to this title. The 28 request for an extension of the deadline for the submission of student 29 level data pursuant to this subsection shall include a justification for 30 the extension and the status of current efforts towards TOWARD complying 31 with the submission of student level data. 32

D. A pupil or the parent or guardian of a pupil shall not be 33 required to submit data that does not relate to the provision of 34 educational services or assistance to the pupil. 35

E. Unless otherwise prescribed, school districts, joint technical 36 education districts and charter schools shall begin to report new data 37 elements on July 1 of the year that follows the effective date of the law 38 that requires the collection of the data. 39

F. Student level data items submitted to the department of 40 education by school districts, joint technical education districts and 41 charter schools pursuant to this section shall not be used to adjust 42 funding levels or calculate the average daily membership for the purpose 43 of funding school districts at any time other than the fortieth, one 44 hundredth and two hundredth days of the school year. 45

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G. A school district, joint technical education district or charter 1 school is not required to submit student level data to the department of 2 education more often than once every twenty school days. 3

H. Notwithstanding subsection J of this section, the student level 4 data shall include reasons for the withdrawal if reasons are provided by 5 the withdrawing pupil or the pupil's parent or guardian. For the purposes 6 of this subsection, the department of education shall include in the 7 specific student level data elements that school districts, joint 8 technical education districts and charter schools are required to submit 9 data relating to students who withdraw from school because the student is 10 pregnant or because the student is the biological parent of a child. 11

I. All student level data collected pursuant to this section is 12 confidential and is not a public record. The data collected may be used 13 for aggregate research and reporting and for providing access of student 14 level data to school districts, joint technical education districts, 15 charter schools, community colleges and PUBLIC universities under the 16 jurisdiction of the Arizona board of regents IN THIS STATE. 17

J. For the purposes of this section, "student level data" means all 18 data elements that are compiled and submitted for each student in this 19 state and that are necessary for the completion of the statutory 20 requirements of the department of education and the state board of 21 education relating to the calculation of funding for public education, the 22 determination of student academic progress as measured by student testing 23 programs in this state, state and federal reporting requirements and other 24 duties prescribed to the department of education or the state board of 25 education by law. Student level data does not include data elements 26 related to student behavior, discipline, criminal history, medical 27 history, religious affiliation, personal physical descriptors or family 28 information not authorized by the parent or guardian of the pupil or 29 otherwise required by law. 30


15-1601. State universities; location; faculty powers; 33 governing boards; powers and duties; annual report 34

A. The Arizona board of regents shall maintain state universities 35 SHALL BE LOCATED at Flagstaff in Coconino county, at Tempe in Maricopa 36 county and at Tucson in Pima county, and the universities are respectively 37 designated northern Arizona university, Arizona state university and the 38 university of Arizona. The GOVERNING board OF ARIZONA STATE UNIVERSITY 39 shall maintain an Arizona state university campus in western Maricopa 40 county designated as Arizona state university west campus and an Arizona 41 state university campus in eastern Maricopa county designated as Arizona 42 state university east campus. The board may establish and maintain Other 43 colleges and universities MAY BE ESTABLISHED subject to legislative 44 authority. Subject to review by the joint committee on capital review, 45

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the GOVERNING board OF A UNIVERSITY may establish new campuses that are 1 separate from any location in existence on July 1, 2007. The Arizona 2 state university campus at Tempe shall provide administrative support for 3 the Arizona state university campuses in western Maricopa county and in 4 eastern Maricopa county. 5

B. The universities EACH UNIVERSITY shall have colleges, schools 6 and departments and give courses of study and academic degrees as the ITS 7 GOVERNING board approves. Subject to the responsibilities and powers of 8 the board GOVERNING BOARDS and the university presidents, the faculty 9 members of the universities, through their elected faculty 10 representatives, shall share responsibility for academic and educational 11 activities and matters related to faculty personnel. The faculty members 12 of each university, through their elected faculty representatives, shall 13 participate in the governance of their respective universities and shall 14 actively participate in the development of university policy. 15

C. EACH UNIVERSITY SHALL BE GOVERNED BY A GOVERNING BOARD FOR THAT 16 UNIVERSITY. THE GOVERNING BOARD MEMBERS OF EACH UNIVERSITY SHALL BE 17 APPOINTED BY THE GOVERNOR PURSUANT TO SECTION 38-211 AND SHALL CONSIST OF 18 FOUR BUSINESS REPRESENTATIVES AND THREE ACADEMIC REPRESENTATIVES. EACH 19 GOVERNING BOARD SHALL ELECT A CHAIRPERSON FROM AMONG ITS MEMBERS. SUBJECT 20 TO LEGISLATIVE APPROVAL, THE INITIAL MEMBERS OF THE GOVERNING BOARD SHALL 21 ASSIGN THEMSELVES BY LOT TO THREE TERMS OF ONE YEAR AND FOUR TERMS OF TWO 22 YEARS, TO BEGIN AND END ON THE THIRD MONDAY IN JANUARY. THE CHAIRPERSON 23 SHALL NOTIFY THE GOVERNOR'S OFFICE ON APPOINTMENTS OF THESE TERMS. ALL 24 SUBSEQUENT GOVERNING BOARD MEMBERS SHALL SERVE TWO-YEAR TERMS OF OFFICE, 25 TO BEGIN AND END ON THE THIRD MONDAY IN JANUARY. AN EXISTING GOVERNING 26 BOARD MEMBER MAY BE REAPPOINTED TO ONE ADDITIONAL TERM ON THE SAME 27 GOVERNING BOARD. 28

D. THE GOVERNING BOARD OF EACH UNIVERSITY IS A BODY CORPORATE WITH 29 PERPETUAL SUCCESSION AND MAY: 30

1. ADOPT A CORPORATE SEAL. 31 2. CONTRACT. 32 3. SUE AND BE SUED. 33 4. PURCHASE, RECEIVE, HOLD, MAKE AND TAKE LEASES AND LONG-TERM 34

LEASES OF AND SELL REAL AND PERSONAL PROPERTY FOR THE BENEFIT OF THIS 35 STATE AND FOR THE USE OF THE UNIVERSITY. 36

E. MEMBERS OF THE GOVERNING BOARD OF EACH UNIVERSITY ARE IMMUNE 37 FROM PERSONAL LIABILITY WITH RESPECT TO ALL ACTS DONE AND ACTIONS TAKEN IN 38 GOOD FAITH WITHIN THE SCOPE OF THEIR AUTHORITY DURING DULY CONSTITUTED 39 REGULAR AND SPECIAL MEETINGS WITH APPROVAL OF A MAJORITY OF THE BOARD. 40

F. GOVERNING BOARD MEMBERS ARE NOT ENTITLED TO COMPENSATION BUT ARE 41 ELIGIBLE FOR REIMBURSEMENT OF EXPENSES. A GOVERNING BOARD MAY NOT 42 REIMBURSE A TOTAL AMOUNT OF EXPENSES THAT EXCEEDS ONE HUNDRED SEVENTY 43 THOUSAND DOLLARS IN ANY FISCAL YEAR. 44

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G. EACH UNIVERSITY SHALL PROVIDE ADEQUATE STAFFING FOR THE 1 GOVERNING BOARD OF THAT UNIVERSITY. 2

H. IN ADDITION TO CARRYING OUT THE PURPOSES OF THIS ARTICLE, THE 3 GOVERNING BOARD OF EACH UNIVERSITY SHALL: 4

1. REGULARLY REVIEW THAT UNIVERSITY'S PERFORMANCE BASED ON A REVIEW 5 OF THE GOALS, EFFICIENCIES, ELIMINATION OF INEFFICIENCIES AND MEASURES OF 6 QUALITY. 7

2. MAKE A PRESENTATION AT LEAST TWICE EACH YEAR TO THE ARIZONA 8 BOARD OF REGENTS PURSUANT TO SECTION 15-1625, SUBSECTION A. 9

C. I. On or before November 15 of each year, Arizona state 10 university shall report to the joint legislative budget committee, the 11 governor's office of strategic planning and budgeting, the speaker of the 12 house of representatives and the president of the senate for each of its 13 separate campuses all of the following: 14

1. The capital expenditure history made to each campus for each of 15 the two previous fiscal years. 16

2. The actual number of full-time equivalent students at each 17 campus of Arizona state university as of the twenty-first day after 18 classes begin for the fall semester and the total headcount enrollment at 19 each campus. 20

3. Any revenues or allocations made to each campus of Arizona state 21 university that are available to report. 22

4. Any long-term capital or expansion plans for each campus. 23 Sec. 37. Heading change 24 The article heading of title 15, chapter 13, article 2, Arizona 25

Revised Statutes, is changed from "ARIZONA BOARD OF REGENTS" to "GOVERNING 26 BOARDS OF UNIVERSITIES". 27


15-1621. Arizona board of regents; members; immunity 30 A. The Arizona board of regents SHALL SERVE AS SCHOOL TRUSTEES AND 31

consists of ten appointive members, including two student members, and the 32 governor and the superintendent of public instruction as ex officio 33 members THE GOVERNOR, THE PRESIDENT OF THE SENATE, THE SPEAKER OF THE 34 HOUSE OF REPRESENTATIVES, THE MAJORITY LEADER OF THE SENATE, THE MAJORITY 35 LEADER OF THE HOUSE OF REPRESENTATIVES, THE MINORITY LEADER OF THE SENATE 36 AND THE MINORITY LEADER OF THE HOUSE OF REPRESENTATIVES. THE GOVERNOR 37 SHALL APPOINT THE LEGISLATIVE MEMBERS ON THE SECOND TUESDAY OF EACH TERM 38 OF THE LEGISLATURE. 39

B. Appointive members, except the student members, shall be 40 appointed by the governor pursuant to section 38-211. The term of each 41 appointive member, except the student members, is eight years, to begin 42 and end on the third Monday in January. 43

C. The governor shall appoint two student members to serve 44 staggered terms. Each year the governor shall designate on a rotation 45

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basis a university under the jurisdiction of the Arizona board of regents 1 to submit a list of nominees for the position of student member. The 2 associated students' organization of the designated university, by 3 majority vote of its governing body, shall select three nominees for 4 student member. The governor shall consider the three nominees when 5 making the appointment of the student member but may appoint any qualified 6 student. Before adjournment of the regular session of the legislature, 7 the governor shall submit to the senate for consent of the senate the name 8 of the nominee for student member whose term is to begin on July 1. A 9 student nominated for a full term may not serve until confirmed by the 10 senate. A student member must be a person who is legally domiciled in 11 this state and attends a university under the jurisdiction of the Arizona 12 board of regents on a full-time basis. In the first year of the term the 13 student member may exercise all rights and privileges of a board member, 14 except the right to vote. In the second year of the term the student 15 member may exercise all rights and privileges of a board member, including 16 the right to vote. The term of each student member is two years, 17 beginning on July 1. The governor may remove the student members for 18 cause. A student member who graduates with no more than seven months 19 remaining in the second year of a term may serve the remainder of the 20 term. A vacancy in the office of student member shall be filled as 21 follows: 22

1. If a vacancy occurs during the first year of a student member's 23 term, the office shall be filled for the unexpired term. A student member 24 nominated by the governor to fill a vacancy pursuant to this paragraph may 25 serve the balance of the term without being confirmed by the senate. 26

2. If a vacancy occurs during the second year of a student member's 27 term, the remaining student member shall assume all rights and privileges 28 of a board member, including the right to vote. A new student member 29 shall be nominated to a two year term to begin on July 1 as provided in 30 this subsection. 31

D. On expiration of the term in January 2008 of two members of the 32 Arizona board of regents, the governor shall appoint two members who 33 reside in a county with a population of less than eight hundred thousand 34 persons pursuant to section 38-211. One member shall be selected from 35 Apache, Coconino, Gila, Mohave, Navajo or Yavapai county and one member 36 shall be selected from Cochise, Graham, Greenlee, La Paz, Pinal, Santa 37 Cruz or Yuma county. Notwithstanding subsection B of this section, the 38 initial term of one of the members appointed pursuant to this subsection 39 shall be four years to begin and end on the third Monday in January. 40 Thereafter, the governor shall appoint each member pursuant to this 41 subsection for terms beginning on the third Monday of January of the year 42 of the expiration of the term and ending on the third Monday of January 43 eight years thereafter. This subsection does not preclude the governor 44 from appointing more than two members who reside in a county with a 45

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population of less than eight hundred thousand persons at one time to the 1 Arizona board of regents. The governor shall make subsequent appointments 2 to replace the terms of members pursuant to this subsection in the same 3 manner. 4

E. Each appointive member of the board shall take the oath of 5 office before entering upon the duties of the member's office. 6

F. B. Members of the board are immune from personal liability with 7 respect to all acts done and actions taken in good faith within the scope 8 of their authority during duly constituted regular and special meetings 9 with approval of a majority of the board. 10


15-1622. Arizona board of regents; officers; organization; 13 quorum 14

A. The ARIZONA board OF REGENTS shall select from its membership a 15 president, secretary, AND treasurer and such other officers it deems 16 necessary. The same person shall not hold the offices of secretary and 17 treasurer. The board may require the treasurer to give AN additional 18 bond. 19

B. A majority of the membership of the ARIZONA board OF REGENTS 20 shall constitute a quorum for THE transaction of business at any meeting 21 regularly called, but a number less than a quorum may adjourn from time to 22 time. 23

Sec. 40. Repeal 24 Section 15-1623, Arizona Revised Statutes, is repealed. 25 Sec. 41. Section 15-1624, Arizona Revised Statutes, is amended to 26

read: 27 15-1624. Meetings of governing board advisory committees; 28

student records; executive session 29 Notwithstanding the provisions of section 38-431.01, subsection A, 30

meetings of advisory committees to the GOVERNING board OF EACH UNIVERSITY 31 involving student records may be held in executive session. A student 32 whose records are to be considered may request that the meeting be held as 33 a public meeting, in which case the meeting pertaining to such THE 34 student's records shall not be in executive session. 35

Sec. 42. Repeal 36 Section 15-1625, Arizona Revised Statutes, is repealed. 37 Sec. 43. Title 15, chapter 13, article 2, Arizona Revised Statutes, 38

is amended by adding a new section 15-1625, to read: 39 15-1625. Arizona board of regents; meetings; prohibition; 40

limitation 41 A. THE ARIZONA BOARD OF REGENTS SHALL MEET TWICE EACH YEAR TO: 42 1. REVIEW THE ACTIONS OF EACH UNIVERSITY GOVERNING BOARD. 43 2. RECEIVE PRESENTATIONS FROM THE GOVERNING BOARD OF EACH 44

UNIVERSITY PURSUANT TO SECTION 15-1601, SUBSECTION H. THE ARIZONA BOARD 45

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OF REGENTS SHALL PRESCRIBE THE SCOPE OF WORK, WORK RULES AND THE WORK 1 PRODUCT EXPECTATION FOR THE GOVERNING BOARD PRESENTATIONS. 2

B. MEMBERS OF THE ARIZONA BOARD OF REGENTS ARE NOT ENTITLED TO 3 COMPENSATION. 4

C. THE ARIZONA BOARD OF REGENTS MAY NOT HIRE, EMPLOY OR TERMINATE 5 THE EMPLOYMENT OF STAFF. 6

D. NOTWITHSTANDING ANY OTHER LAW, THE ONLY RESPONSIBILITIES, 7 POWERS, DUTIES AND AUTHORITY PRESCRIBED TO THE ARIZONA BOARD OF REGENTS 8 ARE THOSE RESPONSIBILITIES, POWERS, DUTIES AND AUTHORITY SPECIFICALLY 9 PRESCRIBED IN THIS SECTION. 10

Sec. 44. Section 15-1626, Arizona Revised Statutes, as amended by 11 Laws 2016, chapter 238, section 1 and chapter 372, section 4, is amended 12 to read: 13

15-1626. General administrative powers and duties of 14 university governing boards; definition 15

A. The GOVERNING board OF EACH UNIVERSITY shall: 16 1. Have and exercise the powers necessary for the effective 17

governance and administration of the institutions UNIVERSITY under its 18 control. To that end, the GOVERNING board OF EACH UNIVERSITY may adopt, 19 and authorize each THE university to adopt, such regulations, policies, 20 rules or measures as are deemed necessary and may delegate in writing to 21 its THE GOVERNING BOARD'S committees, to its THE university presidents 22 PRESIDENT, or their designees THE PRESIDENT'S DESIGNEE, or to other 23 entities under its THE GOVERNING BOARD'S control, any part of its THE 24 GOVERNING BOARD'S authority for the administration and governance of such 25 institutions THAT UNIVERSITY, including those powers enumerated in section 26 15-1625, subsection B, paragraphs 2 and 4, paragraphs 3, 4, 8, 9, 11 and 27 12 of this subsection and subsection B of this section. Any delegation of 28 authority may be rescinded by the GOVERNING board at any time in whole or 29 in part. 30

2. Appoint and employ and determine the compensation of presidents 31 THE PRESIDENT with such power and authority and for such purposes in 32 connection with the operation of the institutions UNIVERSITY as the 33 GOVERNING board deems necessary. 34

3. Appoint and employ and determine the compensation of 35 vice-presidents VICE PRESIDENTS, deans, professors, instructors, 36 lecturers, fellows and such other officers and employees with such power 37 and authority and for such purposes in connection with the operation of 38 the institutions UNIVERSITY as the GOVERNING board deems necessary, or 39 delegate its THE GOVERNING BOARD'S authority pursuant to paragraph 1 of 40 this subsection. 41

4. Remove any officer or employee when the interests of education 42 in this state so require in accordance with its THE GOVERNING BOARD'S 43 personnel rules and policies. 44

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5. Fix tuitions and fees to be charged and differentiate the 1 tuitions and fees between institutions and between residents, 2 nonresidents, undergraduate students, graduate students, students from 3 foreign countries and students who have earned credit hours in excess of 4 the credit hour threshold. For the purposes of this paragraph, the 5 undergraduate credit hour threshold is one hundred forty-five hours for 6 students who attend a THE university under the jurisdiction of the 7 GOVERNING board. The undergraduate credit hour threshold shall be based 8 on the actual full-time equivalent student enrollment counted on the 9 forty-fifth day of every fall and spring semester, divided by two, and any 10 budget adjustment based on student enrollment shall occur in the fiscal 11 year following the actual full-time equivalent student enrollment count. 12 The undergraduate credit hour threshold shall not apply to degree programs 13 that require credit hours above the credit hour threshold, credits earned 14 in the pursuit of up to two baccalaureate degrees, credits earned in the 15 pursuit of up to two state regulated licensures or certificates, credits 16 earned in the pursuit of teaching certification, credits transferred from 17 a private institution of higher education, credits transferred from an 18 institution of higher education in another state, credits earned at 19 another institution of higher education but that are not accepted as 20 transfer credits at the university where the student is currently enrolled 21 and credits earned by students who enroll at a THE university under the 22 jurisdiction of the GOVERNING board more than twenty-four months after 23 the end of that student's previous enrollment at a public institution of 24 higher education in this state. On or before October 15 of each year, the 25 board GOVERNING BOARDS OF THE UNIVERSITIES shall JOINTLY report to the 26 joint legislative budget committee the number of in-state students and 27 out-of-state students who were enrolled at THE universities under the 28 jurisdiction of the board during the previous fiscal year AND who met or 29 exceeded the undergraduate credit hour threshold prescribed in this 30 paragraph. The amount of tuition, registration AND fees and other 31 revenues included in the operating budget for the university adopted by 32 the GOVERNING board as prescribed in paragraph 13 of this subsection shall 33 be SUBJECT TO LEGISLATIVE APPROPRIATION AND deposited, pursuant to 34 sections 35-146 and 35-147 IN A SEPARATE TUITION AND FEES SUBACCOUNT FOR 35 EACH UNIVERSITY. All other tuition and fee revenue shall be retained by 36 each university for expenditure as approved by the GOVERNING board, except 37 that IN A SEPARATE LOCAL TUITION AND FEES SUBACCOUNT FOR EACH UNIVERSITY. 38 THIS SUBACCOUNT SHALL CONSIST OF ONLY TUITION AND FEES. The universities 39 shall not use any tuition or fee revenue to fund or support an alumni 40 association. 41

6. Except as provided in subsection I of this section, Adopt rules 42 to govern its THE GOVERNING BOARD'S tuition and fee setting process that 43 provide for the following: 44

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(a) At least one public hearing at each THE university as an 1 opportunity for students and members of the public to comment on any 2 proposed increase in tuition or fees. 3

(b) Publication of the notice of public hearing at least ten days 4 before the hearing in a newspaper of general circulation in Maricopa 5 county, Coconino county and Pima THE county WHERE THE UNIVERSITY IS 6 LOCATED. The notice shall include the date, time and location of the 7 public hearing. 8

(c) Public disclosure by each THE university of any proposed 9 increases in tuition or fees at least ten days before the public hearing. 10

(d) A ROLL CALL VOTE OF ANY final board action BY THE GOVERNING 11 BOARD on changes in tuition or fees shall be taken by roll call vote. 12 The procedural requirements of subdivisions (a), (b), (c) and (d) of this 13 paragraph apply only to those changes in tuition or fees that require 14 board approval BY THE GOVERNING BOARD. 15

7. Pursuant to section 35-115, submit a budget request for each 16 institution THE UNIVERSITY under its jurisdiction that includes the 17 estimated tuition and fee revenue available to support the programs of the 18 institution UNIVERSITY as described in the budget request. The estimated 19 available tuition and fee revenue shall be based on the tuition and 20 registration fee rates in effect at the time the budget request is 21 submitted with adjustments for projected changes in enrollment as provided 22 by the GOVERNING board. 23

8. Establish curriculums CURRICULA and designate courses at the 24 several institutions UNIVERSITY that in its THE GOVERNING BOARD'S judgment 25 will best serve the interests of this state. 26

9. Award such degrees and diplomas on the completion of such 27 courses and curriculum requirements as it THE GOVERNING BOARD deems 28 appropriate. 29

10. Prescribe qualifications for admission of all students to the 30 universities UNIVERSITY. The GOVERNING board OF THAT UNIVERSITY shall 31 establish policies for guaranteed admission that assure ENSURE fair and 32 equitable access to students in this state from public, private and 33 charter schools and homeschools. For the purpose of determining the 34 qualifications of honorably discharged veterans, veterans are those 35 persons who served in the armed forces for a minimum of two years and who 36 were previously enrolled at a university or community college in this 37 state. No prior failing grades received by the veteran at the university 38 or community college in this state may be considered. 39

11. Adopt any energy conservation standards promulgated ADOPTED by 40 the department of administration for the construction of new buildings. 41

12. Employ for such time and purposes as the GOVERNING board 42 requires attorneys whose compensation shall be fixed and paid by the 43 GOVERNING board. Litigation to which the GOVERNING board is a party and 44

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for which self-insurance is not provided may be compromised or settled at 1 the direction of the GOVERNING board. 2

13. Adopt annually an operating budget for each THE university 3 equal to the sum of appropriated STATE general fund monies and the amount 4 of tuition, registration AND fees and other revenues approved by the 5 GOVERNING board and allocated to each THAT university operating budget. 6

14. In consultation with the state board of education and other 7 education groups, develop and implement a program to award honors 8 endorsements to be affixed to the high school diplomas of qualifying high 9 school pupils and to be included in the transcripts of pupils who are 10 awarded endorsements. The GOVERNING board OF THE UNIVERSITY shall develop 11 application procedures and testing criteria and adopt testing instruments 12 and procedures to administer the program. In order to receive an honors 13 endorsement, a pupil must demonstrate an extraordinary level of knowledge, 14 skill and competency as measured by the testing instruments adopted by the 15 STATE board in mathematics, English, science and social studies. 16 Additional subjects may be added at the determination of the GOVERNING 17 board. The program is voluntary for pupils. 18

15. Require the publisher of each literary and nonliterary textbook 19 used in the universities of this state UNIVERSITY to furnish TO THE 20 GOVERNING BOARD OF THAT UNIVERSITY computer software in a standardized 21 format when software becomes available for nonliterary textbooks to the 22 Arizona board of regents from which braille versions of the textbooks may 23 be produced. 24

16. Require universities that provide a degree DEGREES in education 25 to require courses that are necessary to obtain a provisional structured 26 English immersion endorsement as prescribed by the state board of 27 education. 28

17. Acquire United States flags for each classroom that are 29 manufactured in the United States and that are at least two feet by three 30 feet and hardware to appropriately display the United States flags, 31 acquire a legible copy of the Constitution of the United States and the 32 Bill of Rights, display the flags in each classroom in accordance with 33 title 4 of the United States Code and display a legible copy of the 34 Constitution of the United States and the Bill of Rights adjacent to the 35 flag. 36

18. To facilitate the transfer of military personnel and their 37 dependents to and from the public schools of this state, pursue, in 38 cooperation with the state board of education, reciprocity agreements with 39 other states concerning the transfer credits for military personnel and 40 their dependents. A reciprocity agreement entered into pursuant to this 41 paragraph shall: 42

(a) Address procedures for each of the following: 43 (i) The transfer of student records. 44 (ii) Awarding credit for completed course work COURSEWORK. 45

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(iii) Permitting a student to satisfy the graduation requirements 1 prescribed in section 15-701.01 through the successful performance on 2 comparable exit-level assessment instruments administered in another 3 state. 4

(b) Include appropriate criteria developed by the state board of 5 education and the Arizona board of regents GOVERNING BOARD OF THE 6 UNIVERSITY. 7

19. Require a THE university to publicly post notices of all of 8 its employment openings, including the title and description, instructions 9 for applying and relevant contact information. 10

20. In consultation with the community college districts in this 11 state, develop and implement common equivalencies for specific levels of 12 achievement on advanced placement examinations and international 13 baccalaureate examinations in order to award commensurate postsecondary 14 academic credits at community colleges and public universities in this 15 state. 16

21. On or before August 1 of each year, report to the joint 17 legislative budget committee the graduation rate by university campus 18 during the previous fiscal year. The GOVERNING board shall also report 19 the retention rate by university campus and by class, as determined by 20 date of entry during the previous fiscal year. 21

B. The GOVERNING board OF EACH UNIVERSITY shall adopt personnel 22 policies for all employees of the GOVERNING board and the universities 23 UNIVERSITY. 24

C. In conjunction with the auditor general, the GOVERNING board OF 25 EACH UNIVERSITY shall develop a uniform accounting and reporting system, 26 which shall be reviewed by the joint legislative budget committee before 27 final adoption by the board. The GOVERNING board shall require each THE 28 university to comply with the uniform accounting and reporting system. 29

D. The GOVERNING board OF EACH UNIVERSITY may employ legal 30 assistance in procuring loans for the institutions UNIVERSITY from the 31 United States government. Fees or compensation paid for such legal 32 assistance shall not be a claim on the STATE general fund of this state 33 but shall be paid from funds of the institutions UNIVERSITY. 34

E. The GOVERNING board OF THE UNIVERSITY OF ARIZONA shall approve 35 or disapprove any contract or agreement entered into by the university of 36 Arizona hospital with the Arizona industrial development authority. 37

F. The GOVERNING board OF EACH UNIVERSITY may adopt policies that 38 authorize the institutions UNIVERSITY under its jurisdiction to enter into 39 employment contracts with nontenured employees for periods of more than 40 one year but not more than five years. The policies shall prescribe 41 limitations on the authority of the institutions UNIVERSITY to enter into 42 employment contracts for periods of more than one year but not more than 43 five years, including the requirement that the GOVERNING board approve the 44 contracts. 45

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G. The GOVERNING board OF EACH UNIVERSITY may adopt a plan or plans 1 for employee benefits that allow for participation in a cafeteria plan 2 that meets the requirements of the United States internal revenue code of 3 1986. 4

H. The GOVERNING board OF EACH UNIVERSITY may establish a program 5 for the exchange of students between the universities under the 6 jurisdiction of the board UNIVERSITY and colleges and universities located 7 in the state of Sonora, Mexico. Notwithstanding subsection A, paragraph 5 8 of this section, the program may provide for in-state tuition at the 9 universities under the jurisdiction of the board UNIVERSITY for fifty 10 Sonoran students in exchange for similar tuition provisions for up to 11 fifty Arizona students enrolled or seeking enrollment in Sonoran colleges 12 or universities. The GOVERNING board may direct the universities 13 UNIVERSITY to work in conjunction with the Arizona-Mexico commission to 14 coordinate recruitment and admissions activities. 15

I. Subsection A, paragraph 6, subdivisions (a), (b), (c) and (d) of 16 this section do not apply to fee increases that are set by individual 17 universities and that do not require approval by the Arizona board of 18 regents before the fee increase becomes effective. 19

J. I. The Arizona board of regents, in collaboration with the 20 universities under its jurisdiction, GOVERNING BOARD OF EACH UNIVERSITY 21 shall adopt a performance funding model. The performance funding model 22 shall use performance metrics that include the increase in degrees 23 awarded, the increase in completed student credit hours and the increase 24 in externally generated research and public service funding. The funding 25 formula may give added weight to degrees related to science, technology, 26 engineering and mathematics and other high-value degrees that are in short 27 supply or that are essential to this state's long-term economic 28 development strategy. 29

K. J. The Arizona board of regents GOVERNING BOARD OF EACH 30 UNIVERSITY shall use the performance funding model adopted pursuant to 31 subsection J I of this section in developing and submitting budget 32 requests for the universities UNIVERSITY under its jurisdiction. 33

L. K. On or before November 1 of each year, the Arizona board of 34 regents GOVERNING BOARDS OF THE UNIVERSITIES shall JOINTLY submit to the 35 joint legislative budget committee and the governor's office of strategic 36 planning and budgeting a report on university debt and obligations, 37 including: 38

1. Long-term notes and obligations. 39 2. Certificates of participation and other obligations pursuant to 40

any lease-purchase agreements. 41 3. Revenue bonds. 42 4. Bonds issued pursuant to section 15-1682.03. 43 5. Commercial paper issued pursuant to section 15-1696. 44

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M. L. The report issued pursuant to subsection L K of this 1 section shall contain, for the most recent fiscal year: 2

1. The aggregate level of outstanding principal and the principal 3 and interest payments, by type of debt or obligation. 4

2. An itemization, by campus and project, of the amount of yearly 5 principal and interest to be paid in the most recent and the next five 6 fiscal years. 7

N. M. The GOVERNING board OF EACH UNIVERSITY may enter into an 8 intergovernmental agreement pursuant to section 15-1747 to manage 9 universities THE UNIVERSITY under its jurisdiction subject to the terms of 10 the reciprocity agreement. 11

O. N. For the purposes of this section, "university debt and 12 obligations" means debt and obligations, the principal and interest of 13 which are paid in whole or in part with university monies. 14

Sec. 45. Repeal 15 Section 15-1626, Arizona Revised Statutes, as amended by Laws 2016, 16

chapter 130, section 1, is repealed. 17 Sec. 46. Section 15-1626.01, Arizona Revised Statutes, is amended 18

to read: 19 15-1626.01. Transfer of fees for student organizations; 20

prohibition; support 21 A. A PUBLIC university under the jurisdiction of the Arizona board 22

of regent IN THIS STATE shall not transfer any portion of the tuition or 23 fees collected from students pursuant to section 15-1626 or use any 24 university student billing process to collect monies on behalf of an 25 organization not under the jurisdiction of the Arizona board of regents 26 and THAT IS not recognized as a university student organization. 27

B. A PUBLIC university under the jurisdiction of the Arizona board 28 of regents IN THIS STATE may establish and support student government at 29 the university and the university recognized UNIVERSITY-RECOGNIZED student 30 organizations and clubs, and provide support for these student groups 31 from tuition and fees pursuant to section 15-1633. 32


15-1627. Control of vehicles and nonpedestrian devices on 35 university property; sanctions; compliance with 36 emissions inspection; definition 37

A. Each university may adopt rules for the control of vehicles and 38 nonpedestrian devices on its property with respect to the following 39 only: maximum speed of vehicles and nonpedestrian devices, direction of 40 travel, authorized hours of travel, required stops in traffic, place of 41 parking, method of parking, time of parking, nonparking areas, restricted 42 areas, prohibition of parking in vehicle emissions control areas as 43 defined in section 49-541 of those vehicles which THAT fail to comply with 44 section 49-542 and designation of special parking areas for students, 45

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faculty, staff and the general public. Each university may prescribe and 1 collect reasonable fees for specially designated parking areas. Each 2 university shall cause signs and notices to be posted upon ON the property 3 for the regulation of vehicles and nonpedestrian devices. 4

B. The rules adopted by each university pursuant to subsection A of 5 this section shall be enforced administratively by each university. As to 6 students, faculty and staff, these procedures may, but need not, involve 7 both student and faculty adjudicating bodies, as long as all procedures 8 give the individual notice and an opportunity to be heard concerning the 9 alleged infractions and any sanction to be imposed upon him. 10 Administrative and disciplinary sanctions may be imposed upon ON students, 11 faculty and staff for a violation of the rules, including, but not limited 12 to: a reasonable monetary penalty, impoundment, regular institutional 13 discipline, withdrawal or suspension of campus parking privileges, 14 encumbrances of records or grades, or both, and oral or written reprimand. 15 Habitual or flagrant disregard of rules shall be a ground for suspension 16 or expulsion from the university for a student and may be taken into 17 consideration as to faculty and staff in regard to amount of salary and 18 continuation of employment. 19

C. Members of the general public who park their vehicles in an 20 unauthorized manner upon ON the property of a university shall be warned 21 concerning their unauthorized parking and, if they continue, or if such 22 persons habitually park in such an unauthorized manner, the vehicles so 23 parked may be impounded by the institution UNIVERSITY and a reasonable fee 24 exacted for the cost of impoundment and storage. 25

D. Members of the general public who violate a rule adopted by the 26 university pursuant to subsection A of this section regarding the use of 27 nonpedestrian devices shall be warned of a violation, and any 28 nonpedestrian devices may be impounded by the university and a reasonable 29 fee may be exacted for the cost of impoundment and storage. 30

E. Any person who has received a final administrative ruling 31 concerning a sanction imposed upon him ON THE PERSON as a result of a 32 violation of a rule pursuant to subsection A of this section shall have 33 the right to have that ruling reviewed by the superior court in the county 34 in which the institution UNIVERSITY involved is situated, in accordance 35 with the provisions of the administrative review act, title 12, chapter 7, 36 article 6. 37

F. This section shall be considered supplemental in nature to the 38 general common law and statutory powers of institutions under control of 39 the board THE UNIVERSITY as to the internal control and activities of 40 their students, faculty and staff. 41

G. An institution under the jurisdiction of the board of regents 42 and which A UNIVERSITY THAT is located in a vehicle emissions control area 43 as defined in section 49-541 shall prohibit the issuance of annual permits 44 to park on property under its jurisdiction until the applicant submits an 45

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affidavit or shows proof that his THE APPLICANT'S vehicle meets the 1 requirements of section 49-542. 2

H. For the purposes of this section, "nonpedestrian devices" 3 includes bicycles, tricycles, unicycles, skateboards, roller skates and 4 equines. 5


15-1628. Powers and procedures pertaining to optional 8 retirement programs 9

A. The Arizona board of regents GOVERNING BOARD OF A UNIVERSITY may 10 establish optional retirement programs under which contracts providing 11 retirement and death benefits may be purchased for members of the faculty 12 and administrative officers of the institutions under its jurisdiction 13 UNIVERSITY. The benefits to be provided for or on behalf of participants 14 in the optional retirement program shall be provided through annuity 15 contracts, fixed or variable in nature, or a combination thereof, or other 16 retirement plans approved by the Arizona board of regents GOVERNING BOARD. 17

B. Elections to participate in the optional retirement programs 18 shall be made as follows: 19

1. Eligible employees initially appointed on or after August 9, 20 1974 shall elect to become members of the Arizona state retirement system 21 or to participate in an optional retirement program established by the 22 Arizona board of regents GOVERNING BOARD OF A UNIVERSITY. The election 23 shall be made in writing and filed with the Arizona state retirement 24 system and the disbursing officer of the employing institution UNIVERSITY 25 and shall be effective as of the effective date of appointment. If an 26 eligible employee fails to make an election as provided in this paragraph, 27 the eligible employee shall be deemed to have elected membership in the 28 Arizona state retirement system. 29

2. Eligible employees initially appointed before August 9, 1974 may 30 elect to participate in the optional retirement programs. The election 31 shall be made in writing and filed with the Arizona state retirement 32 system and the disbursing officer of the employing institution UNIVERSITY 33 on or before December 14, 1974, shall become effective as of January 1, 34 1975 and shall constitute a waiver of all benefits provided by the Arizona 35 state retirement system, except all such benefits as are expressly 36 provided by law. 37

3. Any employee who becomes eligible may elect an optional 38 retirement program. The election shall be made in writing and filed with 39 the Arizona state retirement system and the disbursing officer of the 40 employing institution UNIVERSITY within thirty days after notice in 41 writing to the employee of the employee's eligibility, and shall become 42 effective on the first day of the pay period following such AN election, 43 and shall constitute a waiver of all benefits provided by the Arizona 44

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state retirement system, except all such benefits as are expressly 1 provided by law. 2

4. Any eligible employee who is a member of the Arizona state 3 retirement system at the time the employee elects to participate in the 4 optional retirement program shall leave the funds in the employee's 5 retirement account on deposit with the Arizona state retirement system 6 during the continuance of employment. Additional contributions to the 7 employee's retirement account shall not be required and continued service 8 with the Arizona board of regents or an institution under the jurisdiction 9 of the Arizona board of regents UNIVERSITY while under an optional 10 retirement program shall be deemed to be member service in the Arizona 11 state retirement system for the purpose of determining eligibility for any 12 benefits under such A system. The amount of any such benefits under such 13 A system shall be computed only on the basis of service otherwise 14 creditable to a member of the system and the employee's compensation 15 during such service. For THE purposes of subsection D of this section, 16 years of member service in the Arizona state retirement system shall count 17 as years of service under the optional retirement programs. 18

C. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY 19 shall contribute public funds appropriated or any other funds available 20 for such A purpose on behalf of each participant in the optional 21 retirement programs in an amount equal to seven per cent PERCENT of the 22 participant's compensation. Each participant shall also contribute an 23 amount equal to seven per cent PERCENT of the participant's compensation. 24 The appropriation to each university for purposes of enabling the Arizona 25 board of regents to make the contribution provided in this subsection 26 shall not exceed the employer contribution required under the Arizona 27 state retirement system as prescribed by title 38, chapter 5, article 2. 28 Funds utilized by the board of regents or by a university to pay that 29 portion of the contribution that represents the difference between the 30 employer contribution as prescribed by title 38, chapter 5, article 2 and 31 the contribution rate provided in this subsection for an optional 32 retirement program do not constitute a use of appropriated monies for 33 supplemental retirement. 34

D. In the case of an electing employee initially appointed on or 35 after August 9, 1974, contributions pursuant to subsection C of this 36 section shall not be made by the Arizona board of regents UNIVERSITY until 37 the employee's completion of five years of service. Employee 38 contributions required during this initial five year FIVE-YEAR period and 39 during continued service with an institution under the jurisdiction of the 40 Arizona board of regents THE UNIVERSITY shall be promptly remitted to the 41 optional retirement programs approved by the Arizona board of regents 42 GOVERNING BOARD OF THE UNIVERSITY. At the end of an electing employee's 43 completion of five years of service, a single contribution in an amount 44 determined pursuant to subsection C of this section, with interest, shall 45

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be made by the chief financial officer of the employing institution 1 UNIVERSITY to the approved company or companies on behalf of such THE 2 employee. In the case of an electing employee who does not continue in 3 service with an institution under the jurisdiction of the Arizona board of 4 regents THE UNIVERSITY for at least five years, the amount of employer 5 contributions, with interest, shall be refunded to this state. 6

E. If an employee's service is terminated by death prior to BEFORE 7 the completion of five years of service, a death benefit equal to the sums 8 appropriated for such THE employee, plus interest, shall be paid to the 9 beneficiary designated by the participant under the participant's optional 10 retirement program. 11

F. The provisions of Subsection D of this section shall DOES not 12 apply to any electing employee who, at the time of initial appointment, 13 owns a contract determined by the Arizona board of regents GOVERNING BOARD 14 OF THE EMPLOYING UNIVERSITY to be acceptable for use in the optional 15 retirement program. 16

G. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY 17 may provide for the administration of such optional retirement programs 18 and perform or authorize the performance of such functions as may be 19 necessary for such purposes. The Arizona board of regents GOVERNING BOARD 20 shall approve the company or companies from which benefits may be 21 purchased under the optional retirement programs. Such optional 22 retirement programs shall not permit loans. In giving its approval, the 23 EACH GOVERNING board shall consider: 24

1. The nature and extent of the rights and benefits to be provided 25 for participants and their beneficiaries. 26

2. The relation of such rights and benefits to the amount of 27 contributions to be made. 28

3. The suitability of such rights and benefits to the needs of the 29 participants and the interests of the institutions under its jurisdiction 30 UNIVERSITY in the recruitment and retention of faculty and administrative 31 officers. 32

4. The ability of the approved company or companies to provide such 33 suitable rights and benefits. 34

H. Any eligible employee initially appointed after August 9, 1974, 35 electing to participate in the optional retirement programs, shall be 36 ineligible for membership in the Arizona state retirement system as long 37 as the employee remains continuously employed in any position by the 38 Arizona board of regents or by an institution under its jurisdiction 39 UNIVERSITY, except as expressly provided by law. 40

I. The benefits, annuities and employee and employer contributions 41 provided for in this section, and all interest, earnings and other credits 42 pertaining to such benefits, annuities and contributions, shall not be 43 subject to execution or attachment and shall be nonassignable. The 44 employee and employer contributions provided for in this section and all 45

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interest, earnings and other credits pertaining to such contributions are 1 exempt from state, county and municipal taxes. The benefits and annuities 2 received by an employee under this section after December 31, 1988 are 3 subject to tax pursuant to title 43. 4

J. Subject to amendment of the federal-state agreement provided for 5 in section 38-702, every eligible employee electing to participate in the 6 optional retirement programs shall have old age, survivors and disability 7 insurance coverage provided by the federal social security act in 8 accordance with the provisions of title 38, chapter 5, article 1. 9


15-1629. Annual report 12 Within ninety days after the close of each fiscal year, the Arizona 13

board of regents GOVERNING BOARDS OF THE UNIVERSITIES shall JOINTLY make a 14 report for the fiscal year to the governor. The report shall set forth the 15 state of progress of the universities in their several colleges, schools 16 and departments, the courses of study included in their curricula, the 17 number of professors, other instructional faculty and staff members 18 employed, the number of students registered and attending classes, the 19 amount of receipts and expenditures and such other information as the 20 board deems GOVERNING BOARDS DEEM proper. 21


15-1630. Abortion at educational facility prohibited; 24 exception 25

No AN abortion shall NOT be performed at any facility under the 26 jurisdiction of the Arizona board of regents GOVERNING BOARD OF A 27 UNIVERSITY unless such AN abortion is necessary to save the life of the 28 woman having the abortion. 29


15-1631. State museum; fees 32 A. There shall be a state museum for the collection and 33

preservation of the archaeological resources, specimens of the mineral 34 wealth and the flora and fauna of this state. 35

B. The Arizona board of regents GOVERNING BOARD OF THE UNIVERSITY 36 OF ARIZONA shall direct and manage the museum and shall set apart 37 sufficient space to accommodate it. 38

C. The Arizona board of regents GOVERNING BOARD OF THE UNIVERSITY 39 OF ARIZONA shall adopt any fees for services performed by the state museum 40 pursuant to title 41, chapter 4.1, article 4 and section 41-865. 41

D. Before submitting a proposal to the Arizona board of regents 42 GOVERNING BOARD OF THE UNIVERSITY OF ARIZONA to increase fees for 43 services, the director of the state museum shall provide notice of the 44

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intent to increase fees for services on the website of the state museum 1 before January 1. The notice of intent must: 2

1. Include a justification for the fee increase, which shall 3 contain: 4

(a) The amount of the proposed fee increase. 5 (b) A list of the persons who will be directly affected by, bear 6

the costs of or directly benefit from the proposed fee increase. 7 (c) An analysis of each of the following: 8 (i) The rationale for the proposed fee increase with a description 9

of the statutory responsibilities that the state museum intends to fulfill 10 with the proposed fee increase. 11

(ii) An explanation of the services that the state museum will 12 provide with the proposed fee increase to this state, political 13 subdivisions, other agencies and businesses. 14

(iii) A description of any efforts to avoid fee increases or to 15 reduce the costs or regulatory burden, or both, to the businesses, persons 16 and consumers that will be directly affected by the proposed fee increase. 17

(d) A description of the methodology used to calculate the proposed 18 fee increase and a detailed explanation of the costs included in the fee 19 methodology. 20

2. Be provided to the Arizona board of regents GOVERNING BOARD OF 21 THE UNIVERSITY OF ARIZONA for submittal to the secretary of state for 22 publication in the register pursuant to section 41-1013. 23

E. In addition to the duties prescribed in subsection D of this 24 section, the director of the state museum shall: 25

1. At the same time the Arizona board of regents GOVERNING BOARD OF 26 THE UNIVERSITY OF ARIZONA submits notice of the proposed fee increase to 27 the secretary of state pursuant to subsection D, paragraph 2 of this 28 section, notify by regular mail, fax or e-mail each person who has made a 29 timely request to the state museum for notification of proposed fee 30 changes, proposed policy changes or any other proposed change relating to 31 the state museum. The state museum may purge the list of persons who have 32 requested these notifications once each year. 33

2. Post the draft of the proposal to increase fees for services on 34 the website of the state museum on or before the second Monday of the 35 calendar year. 36

3. Provide an opportunity for public comment regarding the proposal 37 to increase fees for services for at least thirty days after publication 38 by the secretary of state in the register. Public comment may include 39 written comments, comments submitted through e-mail and oral comments. 40

4. If applicable, post on the website of the state museum a revised 41 draft of the proposal to increase fees for services at the end of the 42 public comment period. The revised draft shall include a summary and 43 response to any comments received during the public comment period and a 44

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summary of the alternatives that were considered and a rationale for why 1 those alternatives were not selected. 2

5. Provide an opportunity for public comment for at least twenty 3 days regarding the revised draft of the proposal to increase fees for 4 services. Public comment may include written comments, comments submitted 5 through e-mail and oral comments. 6

6. Not later than five business days after the end of the public 7 comment period, post on the website of the state museum a final draft of 8 the proposal to increase fees for services along with the expected date 9 that the Arizona board of regents GOVERNING BOARD OF THE UNIVERSITY OF 10 ARIZONA will consider the proposed increase. 11

F. Any proposal submitted by the state museum to the Arizona board 12 of regents GOVERNING BOARD OF THE UNIVERSITY OF ARIZONA to increase fees 13 shall include the information prescribed in subsections D and E of this 14 section. 15


15-1633. Use of university resources or employees to 18 influence elections; prohibition; civil penalty; 19 definitions 20

A. A person acting on behalf of a university or a person who aids 21 another person acting on behalf of a university shall not spend or use 22 university resources, including the use or expenditure of monies, 23 accounts, credit, facilities, vehicles, postage, telecommunications, 24 computer hardware and software, web pages, personnel, equipment, 25 materials, buildings or any other thing of value of the university, for 26 the purpose of influencing the outcomes of elections or to advocate 27 support for or opposition to pending or proposed legislation. 28 Notwithstanding this section, a university may distribute informational 29 pamphlets on a proposed bond election as provided in section 35-454 if 30 those informational pamphlets present factual information in a neutral 31 manner. This section does not preclude any of the following: 32

1. A university from reporting on official actions of the 33 university or the Arizona board of regents. 34

2. A registered lobbyist from advocating on behalf of the 35 university or the Arizona board of regents. 36

3. An employee of a university using personal time and resources 37 from influencing the outcomes of elections or from advocating support for 38 or opposition to pending or proposed legislation if the employee does not 39 use university personnel, equipment, materials, buildings or other 40 resources for these purposes. 41

4. Any university employee from providing classroom instruction on 42 matters relating to politics, elections, laws, ballot measures, candidates 43 for public office and pending or proposed legislation. 44

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5. The use of university resources, including facilities and 1 equipment, for government-sponsored forums or debates if the sponsor 2 remains impartial and the events are purely informational and provide an 3 equal opportunity to all viewpoints. The rental and use of a university 4 facility by a private person or entity that may lawfully attempt to 5 influence the outcome of an election is permitted if it does not occur at 6 the same time and place as a government-sponsored forum or debate. 7

B. Employees of a university may not use the authority of their 8 positions to influence the vote or political activities of any subordinate 9 employee. 10

C. This section does not prohibit universities from permitting 11 student political organizations of political parties, including those that 12 are recognized pursuant to sections 16-801, 16-802 and 16-803, to conduct 13 lawful meetings in university buildings or on university grounds, except 14 as prescribed in subsection A of this section. Each student political 15 organization that is allowed to conduct lawful meetings on university 16 property shall have equal access as any other student political 17 organization that is allowed to conduct lawful meetings on university 18 property. 19

D. This section shall not be construed as denying the civil and 20 political liberties of any person as guaranteed by the United States and 21 Arizona Constitutions. 22

E. Except as provided in subsection F of this section, PUBLIC 23 universities under the jurisdiction of the Arizona board of regents IN 24 THIS STATE may not: 25

1. Provide publicly funded programs, scholarships or courses if the 26 purpose of the program, scholarship or course is to advocate for a 27 specified public policy. 28

2. Allow publicly funded organizations, institutes or centers to 29 operate on the campus of the university or on behalf of or in association 30 with the university if the purpose of the organization, institute or 31 center is to advocate for a specified public policy. 32

F. Subsection E of this section does not apply to: 33 1. A registered lobbyist who advocates on behalf of the university 34

or the Arizona board of regents and other employees assisting such 35 lobbyists in their official capacity. 36

2. Any university employee who expresses a personal opinion on a 37 political or policy issue, regardless of whether that opinion is expressed 38 inside or outside the classroom. 39

3. Print or electronic media produced by students who are enrolled 40 at a university. 41

4. A recognized student government, club or organization of 42 students who are enrolled at a university. 43

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5. Any university employee who is appointed to a government board, 1 commission or advisory panel who provides expert testimony or guidance on 2 public policy. 3

6. The publication of reports or the hosting of seminars or guest 4 speakers by the university that recommends public policy. 5

7. Researching, teaching and service activities of university 6 employees that involve the study, discussion, intellectual exercise, 7 debate or presentation of information that recommends public policy. 8

8. Any other type of advocacy that is allowed by law. 9 G. The attorney general shall publish and distribute to the Arizona 10

board of regents GOVERNING BOARD OF EACH UNIVERSITY a detailed guideline 11 regarding activities prohibited under this section. The attorney general 12 may distribute these guidelines through a website or electronically. 13

H. The attorney general or the county attorney for the county in 14 which an alleged violation of this section occurred may serve on the 15 person an order requiring compliance with this section and may assess a 16 civil penalty of not more than five thousand dollars per violation, plus 17 any amount of misused funds subtracted from the university budget against 18 a person who violates or a person who aids another person in violating 19 this section. The person determined to be out of compliance with this 20 section shall be responsible for the payment of all penalties and misused 21 funds. University funds or insurance payments shall not be used to pay 22 these penalties or misused funds. All misused funds collected pursuant to 23 this section shall be returned to the university whose funds were misused. 24

I. An attorney acting on behalf of a university may request a legal 25 opinion of the attorney general as to whether a proposed use of university 26 resources would violate this section. 27

J. All penalties collected by the court for a suit initiated in 28 superior court by the attorney general shall be paid to the office of the 29 attorney general for the use and reimbursement of costs of prosecution 30 pursuant to this section. All penalties collected by the court for a suit 31 initiated in superior court by a county attorney shall be paid to the 32 county treasurer of the county in which the court is held for the use and 33 reimbursement of costs of prosecution pursuant to this section. 34

K. For the purposes of this section: 35 1. "Government-sponsored forum or debate" means any event, or part 36

of an event or meeting, in which the government is an official sponsor, 37 which is open to the public or to invited members of the public, and whose 38 purpose is to inform the public about an issue or proposition that is 39 before the voters. 40

2. "Influencing the outcomes of elections" means supporting or 41 opposing a candidate for nomination or election to public office or the 42 recall of a public officer or supporting or opposing a ballot measure, 43 question or proposition, including any bond, budget or override election 44 and supporting or opposing the circulation of a petition for the recall of 45

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a public officer or a petition for a ballot measure, question or 1 proposition in any manner that is not impartial or neutral. 2

3. "Misused funds" means university monies or resources used 3 unlawfully pursuant to this section. 4


15-1634. Intergovernmental agreements; special assessments 7 A. Pursuant to section 48-582 or 48-920 or in conjunction with any 8

street improvement made pursuant to any other statute, the GOVERNING board 9 OF A UNIVERSITY on behalf of this state or any THE university UNDER ITS 10 JURISDICTION may enter into and shall be bound by intergovernmental 11 agreements with one or more cities, counties or improvement districts for 12 the purpose of improving streets adjacent to or running through university 13 property by the construction of any or all of the improvements authorized 14 in either title 48, chapter 4, articles 1 and 2 or title 48, chapter 6, 15 article 1. 16

B. The agreement may provide that assessments may be levied against 17 university property to secure repayment of the cost of the improvements. 18 So long as this state or the GOVERNING board OF THE UNIVERSITY owns the 19 land so assessed the assessment liens may not be enforced by sale or 20 foreclosure. The agreement may also provide that the university's share 21 of any incidental cost may be paid by the GOVERNING board from any 22 available fund of that university. The GOVERNING board shall pay or cause 23 to be paid the installments of principal and interest coming due on the 24 assessments and may pledge for the payment thereof any monies of the 25 respective university which THAT do not cause the agreement or assessment 26 to become a debt of this state under, or contrary to, any constitutional 27 provision and which THAT do not violate any contract rights of any other 28 person to be paid from the same source. The agreement shall provide that 29 the payments due under the agreement include any penalties and additional 30 interest that the owner of property subject to assessment would be 31 required to pay on the delinquency of an installment of principal or 32 interest. 33

C. In the agreement the GOVERNING board OF THE UNIVERSITY may waive 34 any formal requirement, notice or prerequisite to levying an assessment. 35

D. If the GOVERNING board OF THE UNIVERSITY leases, long-term 36 leases or sells any parcel subject to an assessment, the GOVERNING board 37 shall require that the lessee's or purchaser's initial payment be in an 38 amount at least sufficient to reimburse the GOVERNING board for the 39 parcel's allocative share of the monies previously expended to pay the 40 assessment. The GOVERNING board shall return such THIS amount to be 41 reimbursed to the source of the monies under subsection B of this section. 42

E. Upon ON the sale of any parcel subject to an assessment, the 43 lien of the assessment may be enforced by foreclosure and sale in the 44

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manner set forth in the respective statute authorizing the levying of the 1 assessment. 2


15-1635. University research development purposes; product 5 development; corporations 6

A. In order to stimulate the flow of capital into the development 7 of specific products which THAT have advanced beyond the theoretical stage 8 and THAT are capable of being reduced to practice on a commercial scale, 9 the GOVERNING board may OF A UNIVERSITY, by resolution, MAY organize one 10 or more corporations under the provisions of title 10. At least one-half 11 of any voting shares of each such corporation shall be held by the 12 GOVERNING board OF THE UNIVERSITY, or a majority of the directors, 13 trustees or members of the corporation shall be designated or appointed by 14 the GOVERNING board OF THE UNIVERSITY. No A member or employee of the 15 GOVERNING board may NOT receive any direct or indirect compensation, other 16 than reimbursement for actual expenses incurred in the performance of his 17 duties, by reason of serving as a member, director or trustee of a 18 corporation organized under this section. 19

B. No such A corporation may NOT be organized unless the GOVERNING 20 board OF THE UNIVERSITY finds in its THE CORPORATION'S organizational 21 resolution that its THE CORPORATION'S formation will stimulate and 22 encourage the development of new products within this state in situations 23 in which financial aid would not otherwise be reasonably available from 24 conventional lending sources. In addition to the powers each corporation 25 may have, each corporation may: 26

1. Enter into product development agreements with persons doing 27 business in this state, on such terms and conditions as are consistent 28 with the research development purposes of the GOVERNING board OF THE 29 UNIVERSITY, to advance financial aid to such persons for the development 30 of specific products, procedures and techniques to be developed and 31 produced in this state and to condition such agreements on contractual 32 assurances that the benefits of increasing or maintaining employment and 33 tax revenues shall remain in this state and accrue to it. 34

2. Acquire, lease, purchase, manage, hold and dispose of real and 35 personal property in this state and lease, convey or deal in or enter into 36 contracts with respect to such property on any terms necessary or 37 incidental to carrying out these research and development purposes. 38

3. Hold patents, copyrights, trademarks or any other evidences of 39 protection or exclusivity as to any products issued under the laws of the 40 United States or any state or nation. 41

C. Before organizing such a corporation, the GOVERNING board OF THE 42 UNIVERSITY shall develop a procedure for applications for financial aid to 43 be forwarded, together with an application fee prescribed by the GOVERNING 44 board, to the GOVERNING board. The GOVERNING board shall investigate and 45

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prepare a report concerning the advisability of approving the proposed 1 financial aid for such A person and concerning any other factors deemed 2 relevant. The investigation and report shall include such facts about the 3 person under consideration as his history, wage standards, job 4 opportunities, stability of employment, past and present financial 5 condition and structure, pro forma income statements, present and future 6 markets and prospects and integrity of management as well as the 7 feasibility of the proposed project to be granted financial aid, including 8 the state of development of the product as well as the likelihood of its 9 commercial feasibility. After receipt and consideration of the report and 10 after other action as is deemed appropriate, the GOVERNING board OF THE 11 UNIVERSITY shall approve or deny the application. The GOVERNING board 12 shall promptly notify the applicant of such action. Approval shall be 13 conditioned on payment to the GOVERNING board, within such A reasonable 14 time after notification of approval as the GOVERNING board may specify, of 15 a commitment fee prescribed by the GOVERNING board. 16

D. The GOVERNING board OF THE UNIVERSITY may receive and accept aid 17 or contributions of monies from any source, including gifts or grants from 18 private sources or from any department or agency of the United States or 19 this state, for the purposes of carrying out the provisions of this 20 section. 21

E. The GOVERNING board OF THE UNIVERSITY may also enter into 22 research and development agreements, royalty agreements, development 23 agreements, licensing agreements and profit sharing agreements concerning 24 the research, development, production, storing or marketing of new 25 products developed or to be developed through university research. 26

Sec. 55. Section 15-1635.01, Arizona Revised Statutes, is amended 27 to read: 28

15-1635.01. Transfer of technology developed by universities; 29 intellectual property policies; officer or 30 employee interest in private entity 31

A. To encourage the exchange of technological expertise, new 32 research development and other valuable information between private 33 enterprise and the university system in this state and to facilitate the 34 transfer of technology developed by officers or employees of PUBLIC 35 universities under the jurisdiction of the Arizona board of regents IN 36 THIS STATE to commercial, nonprofit and entrepreneurial enterprises for 37 the economic development of this state and for the public benefit, the 38 Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY shall maintain 39 intellectual property policies that allow, on a case-by-case negotiated 40 basis, the licensing, assignment or other transfer of intellectual 41 property owned by the GOVERNING board to third parties if the transfer is 42 in the best interest of this state and the university system or the 43 transfer otherwise promotes the dissemination of university research for 44 the public benefit. 45

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B. Notwithstanding title 38, chapter 3, article 8, the Arizona 1 board of regents, a PUBLIC university IN THIS STATE or an entity 2 authorized to manage intellectual property on behalf of the GOVERNING 3 board OF THE UNIVERSITY or a THE university may enter into agreements to 4 transfer intellectual property owned by the GOVERNING board to an officer 5 or employee of an institution under the jurisdiction of the Arizona board 6 of regents THE UNIVERSITY or to an entity in which an officer or employee 7 maintains a substantial interest as defined by section 38-502. 8

C. Before concluding an agreement for the transfer of any 9 intellectual property owned by the Arizona board of regents GOVERNING 10 BOARD OF A UNIVERSITY to an officer or employee of the GOVERNING board or 11 a THE university or to an entity in which an officer or employee of the 12 GOVERNING board or a THE university maintains a substantial interest, the 13 GOVERNING board or university shall do all of the following: 14

1. Identify, on a case-by-case basis, individual and institutional 15 conflicts of interest and conflicts of commitment that may arise as a 16 result of the proposed transfer. 17

2. Determine whether the potential conflicts are manageable. 18 3. If the potential conflicts are manageable, develop a conflict 19

management plan and enter into agreements as necessary for the appropriate 20 management and oversight of the potential conflicts in conformance with 21 policies of the Arizona board of regents and the university. 22

D. The GOVERNING board OF EACH UNIVERSITY shall maintain 23 appropriate policies and procedures for the implementation of this 24 section. 25


15-1636. Lease of real property and improvements in research 28 park; prohibited and permitted uses 29

A. The GOVERNING board OF A UNIVERSITY shall not lease real 30 property located in an area defined as a research park pursuant to section 31 35-701 unless the lease contains a covenant that prohibits unlimited 32 manufacturing on the site and allows the GOVERNING board to enforce the 33 covenant by appropriate means, which may include termination of the lease. 34

B. The GOVERNING board OF A UNIVERSITY may take title to and lease 35 improvements constructed on land located in an area defined as a research 36 park pursuant to section 35-701 if the lease contains a covenant that 37 restricts the use of the subject property to the uses permitted under this 38 section. The lease shall allow the board to enforce the covenant by 39 appropriate means, including termination of the lease. The GOVERNING 40 board may lease unimproved lots or parcels located in an area defined as a 41 research park pursuant to section 35-701 for any use by a lessee. 42

C. The requirements of subsection B of this section do not apply to 43 improvements constructed before July 20, 1996 or to a lease entered into 44 between the GOVERNING board OF A UNIVERSITY and a lessee, subsidiary, 45

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successor, sublessee or assignee of a lessee, who originally entered into 1 any lease with the GOVERNING board before July 31, 1996. 2

D. The subject property may be used only for the following 3 purposes: 4

1. Laboratories, offices and other facilities for testing, 5 consulting and information processing, related to research and 6 development. 7

2. Production, assembly or sale of products pursuant to research 8 and development activities. 9

3. Pilot plants in which processes planned for use in production 10 elsewhere can be tested and assembled. 11

4. Regional or national headquarters of the lessee or its 12 subsidiaries that are engaged in research and development or education 13 activities. 14

5. Education and training facilities. 15 6. Operations required to maintain or support any permitted use, 16

including maintenance shops, power plants, wastewater treatment 17 facilities, the keeping of animals, machine shops, common area 18 improvements and facilities and professional and commercial services 19 supporting permitted uses, such as child development centers, food 20 services and post office and mailing centers. 21


15-1637. Lease of property for health care institution; 24 requirements; conditions; reports; directors, 25 members and officers of nonprofit corporation; 26 definition 27

A. The Arizona board of regents GOVERNING BOARD OF A UNIVERSITY may 28 lease real property, improvements or personal property owned by the 29 GOVERNING board to a nonprofit corporation as lessee for purposes of 30 operating a health care institution as defined in section 36-401. If the 31 GOVERNING board leases such property for such purposes, whether title to 32 improvements on the property rests in the GOVERNING board or in the 33 lessee, the lease agreement and any amendments, renewals or extensions of 34 the agreement shall be deemed binding and effective according to its 35 terms. If, under the provisions of the lease, improvements or personal 36 property related to the operation of a health care institution are 37 conveyed to the nonprofit corporation, they shall be presumed to have been 38 conveyed for their then fair market value. 39

B. Any lease agreement entered into pursuant to subsection A of 40 this section may, at the discretion of the Arizona board of regents 41 GOVERNING BOARD OF THE UNIVERSITY, MAY contain provisions requiring the 42 nonprofit corporation to acquire the approval of the Arizona board of 43 regents prior to GOVERNING BOARD BEFORE entering into any business 44 transactions that may adversely affect the interests of this state or that 45

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are contained in subsection G, paragraph 2 of this section. The Arizona 1 board of regents GOVERNING BOARD shall specify in the lease agreement the 2 type and nature of such transactions which THAT require prior approval of 3 the GOVERNING board. 4

C. To satisfy the requirements of section 103 of the internal 5 revenue code, as defined in section 43-105, any nonprofit corporation 6 which THAT is a lessee as described in subsection A of this section is 7 declared to be: 8

1. A validly organized and existing body politic and corporate 9 exercising its powers for the benefit of the people, to improve their 10 health and welfare and to increase their prosperity. 11

2. Engaged in a purpose essential to public health care. 12 3. Performing an essential governmental function. 13 D. Any nonprofit corporation which THAT is a lessee as described in 14

subsection A of this section is exempt from property taxation by this 15 state or any agency or subdivision of this state and possesses and may 16 exercise only those powers of the Arizona board of regents which GOVERNING 17 BOARD OF THE UNIVERSITY THAT are delegated to the nonprofit corporation by 18 the Arizona board of regents GOVERNING BOARD and which THAT are necessary 19 to satisfy the requirements of section 103 of the internal revenue code, 20 as defined in section 43-105, as specified in the terms, conditions, 21 restrictions and agreements of the lease agreement. These powers are in 22 addition to all those powers granted to a nonprofit corporation by title 23 10, chapters 24 through 40. 24

E. Any nonprofit corporation which THAT is a lessee as described in 25 subsection A of this section may issue bonds and incur obligations and 26 pledge its revenues as security for the payment of the bonds or other 27 obligations for health care institutional purposes to the extent provided 28 by the lease agreement or amendments, renewals or extensions of the 29 agreement. Nothing in This section shall be construed to DOES NOT 30 authorize the incurrence of a debt by the state within the meaning of any 31 constitutional restriction on debt. 32

F. Except as provided in subsection G of this section, any 33 nonprofit corporation which THAT is a lessee as described in subsection A 34 of this section may acquire by purchase, lease or otherwise, and may 35 operate, other health care institutions and real and personal property for 36 purposes of providing products and services related to the operation of 37 health care institutions owned, leased or operated by it. Such AN 38 acquisition or operation does not affect the powers, rights, privileges or 39 immunities conferred on such A nonprofit corporation by this section. 40

G. No nonprofit corporation which THAT is a lessee as described in 41 subsection A of this section shall: 42

1. Until September 1, 1986 enter into any agreement with a county 43 or a nonprofit corporation to which property is conveyed pursuant to 44 section 11-256.03, subsection A if the agreement provides for the 45

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conveyance of any ownership interest whatever in the nonprofit corporation 1 to which property is conveyed pursuant to section 11-256.03, subsection A 2 or in the property described in section 11-256.03, subsection A. After 3 August 31, 1986 any such agreement must be approved by the Arizona board 4 of regents GOVERNING BOARD OF THE UNIVERSITY and the legislature. This 5 subsection does not prevent the grant of an option to purchase such 6 property, provided that the option may not be exercised before 7 September 1, 1986 and the exercise of the option must be approved by the 8 Arizona board of regents GOVERNING BOARD and the legislature. Under no 9 circumstances shall any state general fund monies be used to acquire any 10 interest in such property. 11

2. Own, lease, manage or operate any other health care institution 12 or other real or personal property unless such AN acquisition, management 13 or operation either: 14

(a) Relates to and furthers the educational or research purposes 15 and goals of the university of Arizona hospital. 16

(b) Promotes the efficient and economical operation of the 17 university of Arizona hospital or any other health care institution 18 acquired pursuant to paragraph 1 of this subsection. 19

H. A nonprofit corporation which THAT is a lessee as described in 20 subsection A of this section may manage and operate property described in 21 section 11-256.03, subsection A subject to the restrictions of 22 subsection G of this section. Any management or operation agreement shall 23 provide that the nonprofit corporation which THAT is a lessee as described 24 in subsection A of this section shall not be liable for any bonds or other 25 obligation of any kind relating to the ownership or operation of the 26 property described in section 11-256.03, subsection A incurred before the 27 property is conveyed to such nonprofit corporation in accordance with 28 subsection G of this section. 29

I. A health care institution which THAT is the subject of a lease 30 agreement as described in subsection A of this section is subject to 31 section 15-1630. 32

J. A nonprofit corporation which THAT is a lessee as described in 33 subsection A of this section shall make semiannual progress reports as to 34 its financial status and deliver them on January 1 and July 1 of each year 35 to the Arizona board of regents GOVERNING BOARD OF THE UNIVERSITY, the 36 president of the senate, the speaker of the house of representatives and 37 the governor. The nonprofit corporation shall present an independently 38 audited financial statement to the auditor general within ninety days of 39 the close of the previous fiscal year. The auditor general shall review 40 such statements and transmit them together with a report to officers 41 entitled to receive progress reports by this subsection. 42

K. Any nonprofit corporation which THAT is a lessee as described in 43 subsection A of this section shall: 44

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1. Be organized as a nonprofit corporation pursuant to title 10, 1 chapters 24 through 40 only upon ON the approval of the Arizona board of 2 regents GOVERNING BOARD OF THE UNIVERSITY. 3

2. Be governed by a board of directors, the members of which are 4 appointed by the Arizona board of regents GOVERNING BOARD OF THE 5 UNIVERSITY, provided that no more than forty-nine per cent PERCENT of the 6 members of such THE board of directors of the nonprofit corporation shall 7 be officers or employees of this state and of such forty-nine per cent 8 PERCENT only two members of such THE board of directors may be members of 9 the Arizona board of regents GOVERNING BOARD. Members of the Arizona 10 board of regents GOVERNING BOARD who are appointed to the board of 11 directors of such A nonprofit corporation shall be residents of different 12 counties unless all members of the board of regents GOVERNING BOARD are 13 residents of the same county. 14

3. Be organized under articles of incorporation or bylaws approved 15 by the Arizona board of regents GOVERNING BOARD OF THE UNIVERSITY, which 16 shall provide among other things that: 17

(a) No earnings of the nonprofit corporation shall inure to the 18 benefit of or be distributable to its members, directors, officers or 19 other individuals, except that the nonprofit corporation shall be 20 authorized to pay reasonable compensation for services rendered to it by 21 individuals other than members of the board of directors of the nonprofit 22 corporation acting solely in such capacity, to reimburse expenses in 23 connection with services rendered to or expenses incurred on behalf of the 24 nonprofit corporation and to make payments and distributions in 25 furtherance of the purposes of the nonprofit corporation. 26

(b) Upon ON the dissolution or liquidation of the nonprofit 27 corporation, the board of directors of the nonprofit corporation shall, 28 after paying or making provision for the payment of all of the liabilities 29 of the nonprofit corporation, SHALL distribute all of the assets of the 30 nonprofit corporation to the Arizona board of regents GOVERNING BOARD OF 31 THE UNIVERSITY or its successor. 32

(c) Neither the articles of incorporation nor the bylaws of the 33 nonprofit corporation shall be amended without the approval of the Arizona 34 board of regents GOVERNING BOARD OF THE UNIVERSITY. 35

(d) The board of directors of the nonprofit corporation may adopt 36 nondiscriminatory rules and regulations providing for the use of the 37 university of Arizona hospital by, and staff privileges for, any persons 38 licensed under title 32, chapter 7, 13 or 17 whether or not such persons 39 have a faculty teaching appointment with the school of medicine, 40 providing, however, that such rules and regulations shall contain 41 requirements sufficient to protect the educational and research purposes 42 and goals of the university of Arizona hospital. 43

L. No A member of the Arizona board of regents GOVERNING BOARD OF 44 THE UNIVERSITY who is also a member or director of a nonprofit corporation 45

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which THAT is a lessee as described in subsection A of this section shall 1 as a regent vote upon NOT VOTE ON any matter pertaining to such a 2 corporation as may come before the Arizona board of regents GOVERNING 3 BOARD. 4

M. For the purposes of this section, "nonprofit corporation" means 5 a corporation as defined in section 10-3140. 6


15-1639. University recruitment and retention program for 9 economically disadvantaged, minority and 10 underrepresented student populations 11

A. The three PUBLIC universities under the jurisdiction of the 12 board of regents IN THIS STATE shall each establish a comprehensive plan 13 to initiate new programs and expand existing student recruitment and 14 retention programs directed at economically disadvantaged, minority and 15 underrepresented student populations. The plan shall incorporate at least 16 the following: 17

1. Programs which THAT are directed at Arizona resident students 18 and which THAT include outreach programs established to work with 19 potential students at the high school level. 20

2. A program overview which THAT illustrates the coordination 21 between existing and new recruitment and retention programs. 22

3. Methods for the evaluation of program impact and the 23 establishment of target goals for success. The results of these 24 evaluations shall be reported to the board of regents GOVERNING BOARD OF 25 THE UNIVERSITY utilizing a standard format distributed by the GOVERNING 26 board. 27

B. Monies appropriated for this program shall not be used to 28 support remedial course work COURSEWORK. 29

C. Students WHO ARE admitted to the universities A PUBLIC 30 UNIVERSITY IN THIS STATE must meet the admission criteria established by 31 the board of regents GOVERNING BOARD OF THAT UNIVERSITY. 32


15-1640. Public records exemptions; confidential information; 35 historical records; donor records 36

A. The following records of a PUBLIC university under the 37 jurisdiction of the Arizona board of regents IN THIS STATE are exempt from 38 title 39, chapter 1, article 2: 39

1. Information or intellectual property that is not available to 40 the public and that is a trade secret as defined in section 44-401 or that 41 is either: 42

(a) Contained in unfunded grant applications or proposals. 43 (b) Developed by persons employed by a university, independent 44

contractors working with a university or third parties that are 45

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collaborating with a university, if the disclosure of this data or 1 material would be contrary to the best interests of this state. 2

(c) Provided to a university by a third party pursuant to the terms 3 and conditions of a contract between the university and the third party. 4 In order to qualify for the exemption prescribed in this subdivision, all 5 of the following criteria must be met: 6

(i) The contract specifies that the information being provided to 7 the university is confidential and that there is a need to maintain that 8 confidentiality. 9

(ii) The contract is approved before the contract becomes effective 10 by an official of the university who is authorized to sign these 11 contracts. 12

(iii) The contract includes the name or names of the third party 13 and a general description of the research or other work that is the 14 subject of the contract in a manner sufficient to provide the public with 15 the information necessary to understand the nature of that research or 16 other work. 17

(iv) Except for the exemptions from public disclosure prescribed in 18 this section, the contract will become a public document that is subject 19 to title 39, chapter 1, article 2 when the contract is executed. 20

(d) Composed of unpublished research data, manuscripts, preliminary 21 analyses, drafts of scientific papers, plans for future research and 22 prepublication peer reviews. 23

2. Historical records and materials donated to a university by a 24 private person or a private entity, if restricted access is a condition of 25 the donation. The exemption provided by this paragraph shall expire no 26 later than twenty years after the original donation. 27

3. All records concerning donors or potential donors to a 28 university, other than the names of the donors and the description, date, 29 amount and conditions of these donations. 30

B. This section does not affect the issues to be decided between a 31 university and a contracting party, including issues related to the 32 university's right to publish the data and the results of the university's 33 research or discoveries and the timing of any related publication. 34

C. Any exemption provided by subsection A of this section shall no 35 longer be applicable if the subject matter of the records becomes 36 available to the general public. 37


15-1641. University collegiate special plate funds; purpose 40 A. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY 41

shall establish a separate university collegiate special plate fund for 42 each THE university UNDER ITS JURISDICTION, as described in section 43 15-1601, consisting of monies received by the THAT GOVERNING board from 44

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collegiate plate annual donations for universities pursuant to section 1 28-2412. 2

B. The board of regents GOVERNING BOARD OF EACH UNIVERSITY shall 3 require each THE university UNDER ITS JURISDICTION, as described in 4 section 15-1601, to submit a plan for approval of the expenditure of 5 monies in the appropriate fund. All monies in the fund shall only be used 6 for academic scholarships. Each university shall annually report to the 7 board of regents ITS GOVERNING BOARD the percentage of monies that was 8 expended on behalf of minority applicants. 9

C. The board of regents GOVERNING BOARD OF A UNIVERSITY may 10 delegate to a state university foundation approved by each THE university, 11 as described in section 15-1601, the right to market and promote the 12 purchase of collegiate special plates. No dues, fees or charges except 13 those specified in section 28-2412 may be levied or collected by a state 14 university foundation in connection with collegiate special plates. 15

D. The fund FUNDS established in PURSUANT TO this section is ARE 16 exempt from section 35-190 relating to lapsing of appropriations. At the 17 direction of the GOVERNING board OF A UNIVERSITY, the state treasurer may 18 invest and divest inactive monies in the UNIVERSITY'S fund as provided by 19 section 35-313. The state treasurer shall credit all interest earned on 20 the fund monies to the fund. 21


15-1642. Financial aid trust funds; aid to students with 24 verifiable financial need; endowment; report 25

A. The Arizona board of regents GOVERNING BOARD OF A UNIVERSITY may 26 establish a financial aid trust fund for the purposes of providing 27 immediate aid to students with verifiable financial need, including 28 students who are underrepresented in the population of university students 29 or who by virtue of their special circumstances present unique needs for 30 financial aid, and creating an endowment for future financial aid. Subject 31 to the limitations provided in subsection B, paragraph 3 OF THIS SECTION, 32 the GOVERNING board may assess a surcharge upon ON registration fees paid 33 by students for deposit in the fund. 34

B. The GOVERNING board OF EACH UNIVERSITY shall adopt rules to 35 govern the financial aid trust fund, including the following: 36

1. Twenty-five per cent PERCENT of the monies received each year 37 shall be placed in the trust fund as a permanent endowment. The remaining 38 monies received shall be used for immediate aid for students with 39 verifiable financial need. At least fifty per cent PERCENT of the 40 immediate aid monies shall be used for grant aid. 41

2. The immediate aid monies shall be distributed to the 42 universities on a pro rata basis UNIVERSITY based on relative student 43 contributions to the fund. 44

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3. The surcharge on student registration shall not exceed one per 1 cent PERCENT of the registration fee for students taking more than six 2 credit surcharge hours. The surcharge hours for students taking fewer 3 than seven credit hours shall equal one-half the surcharge assessed 4 students taking more than six credit hours. 5

C. Each dollar raised pursuant to the surcharge on student 6 registration shall be matched by two dollars appropriated by the 7 legislature. 8

D. The GOVERNING board OF EACH UNIVERSITY shall report every three 9 years to the legislature on the status of the financial aid trust fund. 10 The report shall include the use to which the monies have been put and the 11 impact of such use. 12

E. Fund monies shall only be used in university assistance programs 13 approved by the GOVERNING board OF THE UNIVERSITY, and such monies shall 14 be in addition to, and not in replacement of, existing state or 15 institutional financial aid monies. Assistance may be provided to 16 full-time or part-time students. Monies appropriated by this state shall 17 not be used to provide assistance to students who are not residents of 18 this state. 19


15-1643. Arizona area health education system; health 22 education centers; health education center 23 governing boards; duties; annual report 24

A. The Arizona board of regents GOVERNING BOARD OF THE UNIVERSITY 25 OF ARIZONA shall establish the Arizona area health education system in the 26 college of medicine of the university of Arizona. The GOVERNING board 27 shall appoint a system director. 28

B. The system shall consist of five area health education centers 29 administered by the director of the Arizona area health education system. 30 Each center shall represent a geographic area with specified populations 31 that the system determines currently lack services by the health care 32 professions. 33

C. The Arizona board of regents GOVERNING BOARD OF THE UNIVERSITY 34 OF ARIZONA shall appoint a governing board for each HEALTH EDUCATION 35 center consisting of not fewer than ten people and not more than twenty 36 people. Board membership shall consist of health care providers and 37 consumers and shall reflect the ethnic representation of the center's 38 geographic area. Each HEALTH EDUCATION CENTER governing board shall make 39 recommendations to the SYSTEM director regarding health professionals' 40 educational needs, local program priorities and the allocation of system 41 monies. HEALTH EDUCATION CENTER GOVERNING board members are not eligible 42 to receive compensation or reimbursement of expenses. 43

D. Each center shall conduct: 44

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1. Physician and other health professional education programs that 1 consist of any of the following: 2

(a) An undergraduate clinical training program. 3 (b) A graduate program. 4 (c) Postgraduate continuing education. 5 2. Programs to recruit and retain minority students in health 6

professions. 7 3. Continuing education programs for health professionals. 8 E. The director shall submit a written report on or before 9

November 15 of each year to the governor, the president of the senate and 10 the speaker of the house of representatives. The report shall contain the 11 following: 12

1. The fiscal status of each center. 13 2. Information regarding center education, outreach and training 14

programs. 15 3. Information regarding placement of health care personnel in 16

areas the director determines are underserved by these professionals. 17 4. An assessment of system accomplishments. 18 5. Recommendations for possible legislative action. 19 F. The system shall provide expertise and administrative services 20

to each center. 21 Sec. 63. Section 15-1644, Arizona Revised Statutes, is amended to 22

read: 23 15-1644. Statewide area health education centers commission; 24

membership; qualifications; duties; compensation; 25 staffing 26

A. The Arizona board of regents GOVERNING BOARDS OF THE 27 UNIVERSITIES shall JOINTLY appoint a statewide area health education 28 centers commission consisting of not fewer than ten members and not more 29 than twenty members who are knowledgeable about the delivery of health 30 care in this state. Members of the commission shall advise the SYSTEM 31 director on a regular basis on the management of the system and on the 32 expenditure of monies appropriated for the system. 33

B. Commission members serve at the pleasure of the Arizona board of 34 regents GOVERNING BOARDS OF THE UNIVERSITIES and are not eligible to 35 receive compensation or reimbursement of expenses. 36

C. The Arizona area health education system shall provide staffing 37 for the commission. 38


15-1645. Health professions field scholarships; purpose; 41 amount; repayment; definition 42

A. Each area health education center located in this state may 43 grant and administer a scholarship in an amount of not more than eight 44 thousand dollars for each student for each school year to at least two 45

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students who are residents of the center's geographic area and who are 1 enrolled in a health professions program at an Arizona university. The 2 scholarship shall be used to defray educational expenses, including room 3 and board. 4

B. A scholarship shall be granted on the condition that the student 5 contractually agree to practice in the center's geographic area for two 6 years or one year of service for each year of scholarship support, 7 whichever is longer, after completing post-graduation POSTGRADUATION 8 training. If the recipient withdraws from school, the recipient shall 9 repay all scholarship monies within one year of the withdrawal. If the 10 student is dismissed, an appropriate mechanism shall be negotiated to 11 arrange repayment of the remaining unforgiven balance with eight per cent 12 PERCENT interest. 13

C. For good cause a center may extend the time period for training 14 prior to scholarship repayment. 15

D. The Arizona board of regents GOVERNING BOARD OF A UNIVERSITY 16 shall waive all tuition and fees for students granted a scholarship under 17 this section if the legislature appropriates funds MONIES for this 18 purpose. 19

E. For the purposes of this section, "health professions program" 20 means enrollment in a school of medicine, nursing, pharmacy or physical 21 therapy. 22


15-1646. University scholarships; notification requirements 25 The PUBLIC universities under the jurisdiction of the Arizona board 26

of regents IN THIS STATE shall establish policies that ensure fair and 27 equitable access by Arizona students from public, private and charter 28 schools and homeschools to scholarships, including tuition waivers, that 29 are issued solely on the basis of academic merit and for which the 30 universities establish and administer fair and equitable selection 31 criteria. The universities under the jurisdiction of the Arizona board of 32 regents EACH UNIVERSITY shall: 33

1. Annually report to the ITS GOVERNING board and publish and 34 disclose to the extent permitted by state and federal law the following 35 information related to each merit based scholarship awarded to students 36 from public, private and charter schools and homeschools by each 37 university, for the prior academic year: 38

(a) The total number and dollar amount of awards and total number 39 of applicants. 40

(b) The total number and dollar amount of awards and total number 41 of applicants by type of student. 42

(c) The specific criteria used to award each scholarship, including 43 average and range of SAT and ACT scores. 44

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(d) The number of newly awarded scholarships and the number of 1 renewed scholarships. 2

2. Notify students in this state of scholarship awards in a timely 3 manner without regard to whether the students are from public, private or 4 charter schools or homeschools. 5


15-1647. Distribution of licensing and patent income; Arizona 8 state university; report 9

A. Notwithstanding any other law, Arizona state university shall 10 distribute the gross or net income derived from the licensing and other 11 revenues derived from patents, including anticancer, antiviral, antifungal 12 or antimicrobial drug discoveries or inventions, including up-front 13 payments, royalties and any other subsequent or eventual revenue 14 attributable to commercialization. 15

B. The distribution of income received pursuant to subsection A OF 16 THIS SECTION shall be detailed by Arizona state university in an audited 17 annual report. Arizona state university shall specify the expenditures 18 and actual expenses in the audited annual report. The report shall be 19 distributed annually to the president of the Arizona board of regents, the 20 governor, the president of the senate, the speaker of the house of 21 representatives, AND the secretary of state and the department of 22 library, archives and public records. 23


15-1648. Technology and research initiative fund; purpose 26 A. The technology and research initiative fund is established 27

consisting of revenues transferred to the fund pursuant to section 28 42-5029, subsection E, paragraph 2. The Arizona board of regents 29 GOVERNING BOARDS OF THE UNIVERSITIES shall JOINTLY administer the fund. 30 The monies in the fund are continuously appropriated to the Arizona board 31 of regents GOVERNING BOARD OF EACH UNIVERSITY for distribution pursuant to 32 this section and are exempt from the provisions of section 35-190 relating 33 to lapsing of appropriations. 34

B. The board GOVERNING BOARDS OF THE UNIVERSITIES shall JOINTLY 35 adopt rules to administer the technology and research initiative fund in 36 accordance with this section. The board GOVERNING BOARDS OF THE 37 UNIVERSITIES may JOINTLY allocate up to twenty per cent PERCENT of the 38 monies in the fund to be used for capital projects relating to new economy 39 initiatives, including debt service, for the universities under its 40 jurisdiction, pursuant to chapter 13, article 5 of this title CHAPTER. 41

C. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY 42 shall receive requests from the individual universities and shall JOINTLY 43 determine the amount and duration of each award. The criteria for the 44 evaluation of each request shall be as follows: 45

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1. The award must be related to one of the following: 1 (a) A specific academic or research field. 2 (b) Designed to expand THE EXPANSION OF access to baccalaureate or 3

post-baccalaureate POSTBACCALAUREATE education for time-bound and 4 place-bound students. 5

(c) To implement THE IMPLEMENTATION OF recommendations of the 6 Arizona partnership for the new economy or the governor's task force on 7 higher education. 8

2. The award may be used to develop new and existing programs that 9 will prepare students to contribute in high technology industries located 10 in this state. 11

3. The award may be used in conjunction with matching financial 12 assistance from private industry. 13

4. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY 14 shall give preference to requests that are developed in conjunction with 15 private industry, private entities or federal agencies. 16

D. The Arizona board of regents GOVERNING BOARDS OF THE 17 UNIVERSITIES shall JOINTLY submit a report to the governor, the president 18 of the senate and the speaker of the house of representatives on OR BEFORE 19 September 1 of each year on the technology and research award program and 20 shall transmit a copy to the secretary of state and the director of the 21 Arizona state library, archives and public records. The report shall 22 include a description of the amount and duration of each new award 23 distributed and a description of the purpose and goals for each award. 24 For existing awards, the Arizona board of regents GOVERNING BOARDS OF THE 25 UNIVERSITIES shall use a detailed set of performance measures to determine 26 the overall effectiveness of each award. 27


15-1649. Fingerprinting academic and nonacademic personnel; 30 civil immunity; definitions 31

A. The finalist for a security or safety-sensitive position at a 32 PUBLIC university that is under the jurisdiction of the Arizona board of 33 regents IN THIS STATE shall be fingerprinted as a condition of employment. 34 The finalist shall submit a full set of fingerprints to the university for 35 the purpose of obtaining a state and federal criminal records check 36 pursuant to section 41-1750 and Public Law 92-544. The department of 37 public safety may exchange this fingerprint data with the federal bureau 38 of investigation. 39

B. A university may use information obtained pursuant to this 40 section only for the purpose of evaluating the finalists for employment in 41 security or safety-sensitive positions. A university may provide 42 information received pursuant to this section to any other PUBLIC 43 university IN THIS STATE that is evaluating the finalist for employment if 44 the university is under the jurisdiction of the Arizona board of regents. 45

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A university may refuse to hire, may rescind an offer of employment to or 1 may review and terminate the employment of a finalist or employee who has 2 been convicted of or who has admitted committing any criminal offense. A 3 university that is considering terminating an employee pursuant to this 4 subsection shall provide due process to the employee in accordance with 5 policies adopted by the Arizona board of regents and the university 6 GOVERNING BOARD OF THE UNIVERSITY before taking disciplinary action. 7

C. A university that relies on information obtained pursuant to 8 this section in making employment decisions is immune from civil liability 9 for use of the information unless the information obtained is false and 10 the university knows the information is false or acts with reckless 11 disregard of the information's truth or falsity. 12

D. A security or safety-sensitive position shall be identified as a 13 security or safety-sensitive position in the job description and in any 14 advertisements for the position. 15

E. For the purposes of this section: 16 1. "Finalist" means any person in the group of individuals actually 17

submitted to the hiring official for selection as a new hire or any 18 employee of a university who seeks a transfer, a reclassification or a 19 reassignment to a security or safety-sensitive position. 20

2. "Security or safety-sensitive position" means any position 21 designated as a security or safety-sensitive position by a university due 22 to applicable federal or state law or pursuant to rules or policies 23 adopted by the Arizona board of regents or the university GOVERNING BOARD 24 OF THE UNIVERSITY. 25


15-1650. Annual financial aid report 28 A. On or before December 1 of each year, the Arizona board of 29

regents GOVERNING BOARDS OF THE UNIVERSITIES shall JOINTLY submit to the 30 governor, the president of the senate, the speaker of the house of 31 representatives and the joint legislative budget committee a financial aid 32 report with information from the two prior fiscal years. The report shall 33 provide information for each institution under the jurisdiction of the 34 board UNIVERSITY, a comparison to peer institutions, and summary 35 information for the entire university system. 36

B. The report shall separately delineate both full-time resident 37 undergraduate and full-time resident graduate students. 38

C. For each group identified in subsection B OF THIS SECTION, the 39 annual financial aid report shall detail the following: 40

1. Cost of attendance, delineated by tuition rates, mandatory fees, 41 room and board charges, book purchases and travel and related personal 42 expenses. 43

2. Expected family contribution. 44

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3. Gift aid, delineated by source type. Source types include 1 federal, state, institutional and private. 2

4. Loans, delineated by subsidized amounts, unsubsidized amounts 3 and amounts loaned to the parents of students. 4

5. Employment, delineated by program type. Program types include 5 federal work-study, institutional work-study, graduate assistantships and 6 outside work. 7

D. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY 8 and the staff of the joint legislative budget committee shall jointly 9 determine the methodology and format of the report. 10


15-1650.01. Hospitality studies scholarship funds; definition 13 A. The hospitality studies scholarship fund is established AT EACH 14

PUBLIC UNIVERSITY IN THIS STATE consisting of revenues available to the 15 fund from any lawful source. The Arizona GOVERNING board of regents OF 16 EACH UNIVERSITY shall administer the ITS RESPECTIVE fund and may partner 17 with any statewide lodging and tourism association that provides matching 18 monies in administering the fund. Monies in the EACH fund are subject to 19 legislative appropriation for the purposes of this section and are exempt 20 from the provisions of section 35-190 relating to lapsing of 21 appropriations. 22

B. The GOVERNING board OF EACH UNIVERSITY shall use the monies in 23 the ITS RESPECTIVE fund to provide scholarships and other financial 24 assistance to students entering into or enrolled in a hospitality studies 25 program at any THAT university under the jurisdiction of the board. The 26 financial assistance shall be used to defray educational expenses, 27 including room and board. If a recipient withdraws from school or from 28 the hospitality studies program before receiving a degree, the recipient 29 must repay all scholarship monies previously awarded to the recipient. If 30 the recipient is dismissed from the university, the GOVERNING board shall 31 negotiate an appropriate repayment schedule plus eight percent simple 32 interest. 33

C. For the purposes of this section, "hospitality studies program" 34 means any undergraduate or graduate academic studies program relating to 35 THE operation or management of hotels, motels or other facilities for 36 transient lodging as described in section 42-5070, subsection A or 37 restaurants as described in section 42-5074. 38


15-1650.02. Energy and water savings accounts 41 The Arizona board of regents GOVERNING BOARD OF A UNIVERSITY may 42

establish an energy and water savings account in the same manner as a 43 school district pursuant to section 15-910.02 and may fund and use monies 44 for guaranteed energy COST savings contracts pursuant to section 34-105. 45

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15-1650.03. Governing boards; resident undergraduate 3 students; cost study; annual cost containment 4 report 5

A. On or before December 15, 2017 and every five years thereafter, 6 the Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY shall 7 conduct and complete a comprehensive cost study to determine the actual 8 cost of educating a full-time resident undergraduate student at each THAT 9 university under the jurisdiction of the board. The GOVERNING board shall 10 submit the cost study to the governor, the president of the senate, the 11 speaker of the house of representatives and the joint legislative budget 12 committee and shall provide a copy to the secretary of state. The cost 13 study shall include a detailed breakdown of the costs associated with 14 educating a full-time resident undergraduate student and shall include at 15 least the following: 16

1. The use of instructional fees at each THAT university, including 17 differentiating between mandatory fees, program fees and course fees. 18

2. Differentiated costs between programs of study, including 19 differential tuition and program and course fees. 20

3. The costs of faculty and administration differentiated between 21 the amount of time needed to instruct students and to conduct research. 22

4. A breakdown of where tuition dollars are allocated, including 23 the amount that is not directly attributable to instructional costs. 24

5. An analysis of the marginal cost and the average cost of a 25 student depending on the type of program in which the student is enrolled, 26 including online programs. 27

B. On or before July 1, 2018 and each year thereafter, the Arizona 28 board of regents GOVERNING BOARD OF EACH UNIVERSITY shall submit a 29 comprehensive university cost containment report for each THAT university 30 under the jurisdiction of the board to the governor, the president of the 31 senate, the speaker of the house of representatives and the joint 32 legislative budget committee and shall provide a copy to the secretary of 33 state. The report shall demonstrate the actions taken by each THAT 34 university to contain the increased cost of attendance for full-time 35 resident undergraduate students and shall include at least the following: 36

1. Historical data on tuition and fee levels and percentage 37 increases, including auxiliary fees and housing and meal plan fees, at 38 each THAT university for at least the past twenty years, and what those 39 increases were used for at each THE university since at least 2009. 40

2. The growth and cost of the faculty and administration at each 41 THAT university. 42

3. Actions taken by each university to contain costs at the 43 university and the savings associated with those actions. 44

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4. The allocation of faculty resources based on the time needed to 1 instruct students and to conduct other research activities. 2

5. The return on investment for diverting tuition dollars to 3 noninstructional purposes. 4

6. The ability to reduce unnecessary coursework for educational 5 programs. 6

7. The development of new, nontraditional and less expensive 7 education programs. 8


15-1650.04. Contract lobbyist; prohibition 11 Notwithstanding any other law, the Arizona board of regents 12

GOVERNING BOARD OF A UNIVERSITY or a university under the ITS jurisdiction 13 of the Arizona board of regents may not use the state general fund 14 appropriation for contracts with individuals or entities for lobbying 15 services. 16


15-1651. Teacher training schools 19 A. Every teacher training school established in connection with the 20

state universities shall be a part of the school system and a branch of 21 the school district within which the training school is located. 22

B. Training schools shall be governed by the laws and regulations 23 relating to schools except as otherwise provided in this article. 24

C. Students in the state universities may, under rules prescribed 25 by the Arizona board of regents GOVERNING BOARD OF THE RESPECTIVE 26 UNIVERSITY, MAY teach in the training schools and other schools without 27 being certificated teachers. 28


15-1652. Management and expenses 31 A. Every teacher training school shall be under the supervision and 32

management of the Arizona board of regents GOVERNING BOARD OF THAT 33 UNIVERSITY. All teachers in the school, except the principal, shall be 34 employed by the Arizona board of regents GOVERNING BOARD OF THAT 35 UNIVERSITY and the governing board of the school district in which the 36 training school is located, acting jointly. 37

B. The school district shall pay towards TOWARD the expense of a 38 teacher training school an amount equal to one-half of the school monies 39 which THAT it is entitled to have apportioned to it based on the student 40 count at the training school during the preceding school year, but pupils 41 attending from another school district shall not be credited with 42 enrollment in the school district in which the university is located. 43

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15-1653. Authority to prescribe rules governing admission and 3 attendance 4

The Arizona board of regents GOVERNING BOARD OF THE UNIVERSITY and 5 the governing board of the school district in which a teacher training 6 school is located shall jointly prescribe rules and regulations governing 7 admission and attendance at the training school of children of school age 8 who reside within the school district and governing all pupils in changing 9 their attendance from the training school to another school in the school 10 district. The Arizona board of regents GOVERNING BOARD OF THAT UNIVERSITY 11 may admit all children of school age residing within the school district 12 who are not then registered during that year for attendance at another 13 school of the school district for attendance at the training school up to 14 such number as necessary for the conduct of the training school. 15


15-1654. Qualifications for admission to teacher training 18 program 19

On or before January 1, 1993, Each PUBLIC university under the 20 jurisdiction of the Arizona board of regents IN THIS STATE shall establish 21 qualifications for entrance into the teacher training program of its 22 respective colleges COLLEGE of education. 23


15-1655. Arizona teacher academy; tuition waiver; report 26 A. For the 2017-2018 academic year, PUBLIC universities under the 27

jurisdiction of the Arizona board of regents IN THIS STATE shall implement 28 an Arizona teacher academy to incentivize Arizona resident students to 29 enter the teaching profession and to commit to teach in Arizona public 30 schools. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY, 31 in consultation with universities THE UNIVERSITY under the ITS 32 jurisdiction of the board, shall develop: 33

1. Metrics to assess the efficacy of the academy. 34 2. A marketing and promotion plan to recruit students for the 35

academy. 36 B. The Arizona teacher academy may include new or existing teacher 37

preparation program pathways that are student-focused and that employ 38 proven, research-based models of best practices already being implemented. 39 Each university may develop a portfolio of teacher preparation programs to 40 offer as part of the academy. Programs offered as part of the academy 41 shall include accelerated models for: 42

1. High-demand teacher specializations, including science, 43 technology, engineering and mathematics. 44

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2. Individuals seeking postbaccalaureate coursework that results in 1 professional certification. 2

C. Each university shall develop formalized partnerships with 3 public schools in this state to build commitments for teacher employment 4 on completion of the Arizona teacher academy. The targeted deployment of 5 teachers who have completed the academy shall be based on the needs of 6 each school system and the community that is being served as well as the 7 individual skills of each teacher. 8

D. Each university shall provide each full-time student enrolled in 9 the Arizona teacher academy an annual waiver for all tuition and fees 10 associated with the student's program of study, subject to the following: 11

1. If the student does not successfully complete the academic year 12 in good academic standing, the student shall reimburse the university for 13 the total amount of the waiver for tuition and fees the student received 14 for that year. 15

2. For each academic year that the student successfully completes 16 and for which the student receives a waiver for all tuition and fees, the 17 student must agree to teach for one full school year in a public school in 18 this state. 19

3. If the student does not fulfill the student's agreement to teach 20 in a public school, the student must reimburse the university for the 21 proportional amount of the waiver for tuition and fees that the student 22 received that corresponds to the number of school years the student agreed 23 to teach but did not teach in a public school in this state. 24

4. If the student is physically or mentally unable to fulfill the 25 requirements of the academy, the university shall assess the student's 26 ability to repay the financial assistance received and shall make a 27 determination on any terms of repayment. 28

E. On or before July 1, 2018 and each year thereafter, the Arizona 29 board of regents GOVERNING BOARD OF EACH UNIVERSITY shall report to the 30 governor, the president of the senate and the speaker of the house of 31 representatives, and submit a copy to the secretary of state, on all of 32 the following: 33

1. The total number of students enrolled in the Arizona teacher 34 academy of each THAT university. 35

2. The percentage of students who completed each year of the 36 academy and who plan to continue to the subsequent year, delineated by 37 each teacher preparation program offered by each THAT university as part 38 of the Arizona teacher academy. 39

3. The number of teachers who completed a program of study through 40 the Arizona teacher academy. 41

4. The number of teachers currently teaching in a public school in 42 this state as part of an agreement for receiving a full tuition and fee 43 waiver. 44

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5. The number of students who have defaulted on their agreement and 1 who are in repayment agreements. 2


15-1661. Annual appropriation; enrollment audit; expenditure; 5 balance; salaries 6

A. There shall be appropriated in the general appropriation 7 APPROPRIATIONS bill for each fiscal year a sum of monies not less than 8 eighty-five one-hundredths of one mill on the dollar of the assessed 9 valuation of all taxable property in the THIS state for the improvement, 10 support and maintenance of the institutions under the Arizona board of 11 regents' jurisdiction PUBLIC UNIVERSITIES IN THIS STATE, including payment 12 of salaries, current expenses, purchase of equipment, making necessary 13 repairs, construction of new buildings, purchase of lands and in general 14 for payment of all such expenses connected with the management of the 15 institutions under the Arizona board of regents' jurisdiction PUBLIC 16 UNIVERSITIES IN THIS STATE. The department of revenue, upon ON compiling 17 the aggregate assessed valuation of all taxable property within this 18 state, shall compute the amount of monies so determined and certify such 19 THAT amount over its seal to the department of administration and the 20 state treasurer. 21

B. The full-time equivalent student enrollment reported for the 22 previous fiscal year by each university shall be audited annually by the 23 auditor general. The auditor general shall report the results of the 24 audit to the staffs of the joint legislative budget committee and the 25 governor's office of strategic planning and budgeting on or before October 26 15 of each year. On or before July 21 of each academic year, each 27 university shall provide for the previous fall semester a certified report 28 to the auditor general of the number of full-time equivalent students 29 calculated by the university and a separate report only for those students 30 who meet the residency requirements prescribed in section 15-1802. The 31 university's records used to calculate full-time equivalent student 32 enrollment shall be provided to the auditor general in an electronic 33 format prescribed by the auditor general. Beginning in 2006, Each 34 university shall submit to the auditor general a summary of its full-time 35 equivalent student enrollment accounting policies and procedures, 36 compilation procedures and source records used for calculating full-time 37 equivalent student enrollment. These accounting policies and procedures, 38 compilation procedures and source records shall comply with policies 39 developed on or before June 30, 2006 by the Arizona board of regents BY 40 THE GOVERNING BOARDS OF THE UNIVERSITIES, in consultation with the auditor 41 general and reviewed by the joint legislative budget committee. These 42 policies shall include a review and recommendations of the necessity of 43 minimum requirements for students enrolled in classes to qualify for 44 appropriations pursuant to this section, including requirements that the 45

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class be a for-credit course that is necessary for the completion of a 1 degree and that the student enrolled in the course be physically present 2 in this state at the time the course is conducted. The basic actual 3 full-time equivalent student enrollment shall be counted on the 4 forty-fifth day after the basic actual full-time equivalent student 5 enrollment classes begin for the fall and spring semesters, as published 6 in the university catalogs, and divided by two. The Arizona board of 7 regents GOVERNING BOARD OF EACH UNIVERSITY shall also make recommendations 8 of whether each professor or instructor should be required to review class 9 rosters and make additions or deletions as necessary. If so, class 10 rosters that reflect enrollment as of the forty-fifth day shall be 11 provided by the registrar's office to each professor or instructor for 12 every class section. The class roster shall indicate the course number, 13 course title, time, instructor name and students enrolled. On the 14 forty-fifth day class rosters, each professor or instructor shall indicate 15 as withdrawn each student who has formally withdrawn from the course, and 16 that student shall not be counted for state aid purposes. The official 17 forty-fifth day rosters shall include a manual signature and date or an 18 electronic authorization and date by the professor or instructor and shall 19 include the following certification: 20

I hereby certify that the information contained in this 21 class roster accurately reflects those students who are 22 enrolled. 23 C. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY 24

shall also report the basic actual full-time equivalent student enrollment 25 for only those students who meet the residency requirements prescribed in 26 section 15-1802. The basic actual full-time equivalent student enrollment 27 for only those students who meet the residency requirements prescribed in 28 section 15-1802 that is reported by each university for the previous 29 fiscal year shall be annually audited by the auditor general. 30

D. Students who have withdrawn or who have been withdrawn from 31 classes as of the forty-fifth day shall not be counted for state aid 32 purposes. A record shall be maintained that identifies student 33 withdrawals by date of withdrawal, as of the forty-fifth day and after the 34 forty-fifth day for the entire semester. 35

E. Amounts appropriated as provided by subsection A OF THIS SECTION 36 shall be paid as other claims against this state are paid. 37

F. The balance of appropriations as provided by subsection A OF 38 THIS SECTION at the end of the fiscal year, if any, shall not revert to 39 the STATE general fund but shall be carried forward for the continued use 40 for which appropriated. 41

G. Monies appropriated to a PUBLIC university under the 42 jurisdiction of the Arizona board of regents IN THIS STATE for cost of 43 living COST-OF-LIVING salary increases for university employees shall be 44 used to provide cost of living COST-OF-LIVING salary increases to all 45

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university employees, including graduate student assistants. If monies 1 are appropriated to a university for salary increases based on merit, the 2 monies shall be used to provide merit increases according to the merit pay 3 plan adopted by the Arizona board of regents GOVERNING BOARD OF THAT 4 UNIVERSITY. 5

H. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY 6 shall determine current actual full-time equivalent student enrollment at 7 each of the institutions under the jurisdiction of the Arizona board of 8 regents THAT UNIVERSITY. Full-time equivalent student enrollment shall be 9 calculated by adding the following: 10

1. The total number of enrolled fall and spring semester credit 11 hours in 100-level credit courses and 200-level credit courses divided by 12 fifteen. 13

2. The total number of enrolled fall and spring semester credit 14 hours in 300-level credit courses and 400-level credit courses divided by 15 twelve. 16

3. The total number of enrolled fall and spring semester credit 17 hours in graduate level credit courses divided by ten. 18

I. The Arizona board of regents GOVERNING BOARD OF A UNIVERSITY, in 19 its annual budget request, shall not include funding for any student who 20 is enrolled at an institution under the jurisdiction of the Arizona board 21 of regents THAT UNIVERSITY and who has earned credit hours in excess of 22 the undergraduate credit hour threshold, except that the undergraduate 23 credit hour threshold shall not apply to students who are enrolled in a 24 degree program that requires credit hours above the credit threshold. For 25 the purposes of this subsection, the undergraduate credit hour threshold 26 is one hundred fifty-five hours for students who attend a university under 27 the jurisdiction of the board in fiscal year 2006-2007, one hundred fifty 28 hours for students who attend a university under the jurisdiction of the 29 board in fiscal year 2007-2008 and one hundred forty-five hours for 30 students who attend a PUBLIC university under the jurisdiction of the 31 board after fiscal year 2007-2008 IN THIS STATE. The undergraduate credit 32 hour threshold shall be based on the actual full-time equivalent student 33 enrollment counted on the forty-fifth day after classes begin for the fall 34 and spring semesters and any budget adjustment based on student enrollment 35 shall occur in the fiscal year following the actual full-time equivalent 36 student enrollment count. The undergraduate credit hour threshold shall 37 not apply to credits earned in the pursuit of up to two baccalaureate 38 degrees, credits earned in the pursuit of up to two state regulated 39 STATE-REGULATED licensures and certificates, credits earned in the pursuit 40 of teaching certification, credits transferred from a private institution 41 of higher education, credits transferred from an institution of higher 42 education in another state, credits earned at another institution of 43 higher education but that are not accepted as transfer credits at the 44 university where the student is currently enrolled and credits earned by 45

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students who enroll at a PUBLIC university under the jurisdiction of the 1 board IN THIS STATE more than twenty-four months after the end of that 2 student's previous enrollment at a public institution of higher education 3 UNIVERSITY in this state. 4


15-1662. Universities; funds and accounts 7 A. The state treasurer shall maintain the following separate 8

permanent funds and accounts: 9 1. Universities land fund established by section 37-522. 10

Distributions from the fund pursuant to article X, section 7, Constitution 11 of Arizona, and monies derived from the lease, sale or other disposition 12 of lands granted by the United States for the use and benefit of the 13 universities shall be deposited in the universities land fund as provided 14 in this section and section 37-522. Monies accruing to the universities 15 under the laws of the United States pertaining to timber lands shall be 16 deposited in the universities timber land account established by section 17 37-482, subsection B and may be used for the payment of expenditures which 18 THAT the state land department incurs for the conservation, sale and other 19 administration of timber or timber products as provided in this section 20 and sections 37-482 and 37-522. 21

2. Normal schools land fund established by section 37-523. 22 Distributions from the fund pursuant to article X, section 7, Constitution 23 of Arizona, and monies derived from the lease, sale or other disposition 24 of lands granted by the United States for the use and benefit of normal 25 schools shall be deposited in the normal schools land fund as provided in 26 this section and section 37-523. 27

3. Agricultural and mechanical colleges land fund established by 28 section 37-524. Distributions from the fund pursuant to article X, 29 section 7, Constitution of Arizona, and monies derived from the lease, 30 sale or other disposition of lands granted by the United States for the 31 use and benefit of agricultural and mechanical colleges shall be deposited 32 in the agricultural and mechanical colleges land fund as provided in this 33 section and section 37-524. 34

4. School of mines land fund established by section 37-524. 35 Distributions from the fund pursuant to article X, section 7, Constitution 36 of Arizona, and monies derived from the lease, sale or other disposition 37 of lands granted by the United States for the use and benefit of schools 38 of mines shall be deposited in the school of mines land fund as provided 39 in this section and section 37-524. 40

5. Military institutes land fund established pursuant to section 41 37-525. Distributions from the fund pursuant to article X, section 7, 42 Constitution of Arizona, and monies derived from the lease, sale or other 43 disposition of lands granted by the United States for the use and benefit 44

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of military institutes shall be deposited in the military institutes land 1 fund as provided in this section and section 37-525. 2

B. The Arizona board of regents GOVERNING BOARDS OF THE 3 UNIVERSITIES shall JOINTLY maintain a separate permanent fund to be known 4 as the universities fund. All monies other than those specified in 5 subsection A of this section which THAT are derived from the lease, sale 6 or other disposition of lands or property which AND THAT are given by any 7 person or by law as a trust fund to be administered JOINTLY by the board 8 GOVERNING BOARDS in conformity with the terms of the gift shall be 9 deposited in the universities fund. Such monies shall be invested and 10 administered as designated for the use of the universities except such 11 monies as are appropriated for specific purposes from the STATE general 12 fund of this state for the use of the universities. 13

C. The state treasurer shall keep the monies of the land funds 14 invested in safe interest bearing securities and prudent equity pursuant 15 to article X, section 7, Constitution of Arizona, and as provided by 16 sections 35-313 and 35-314.01, and monies earned from investment shall be 17 credited to the funds. 18

D. Monies shall not be taken from one fund or deposited in any 19 other fund nor shall any fund or the income from the fund be taken or 20 expended for any object other than as provided by section 37-527 or as 21 provided by the original gift or appropriation. 22


15-1663. Expenditure of land funds; eminent scholars matching 25 grant fund 26

A. Except as provided in subsection B of this section, the Arizona 27 board of regents GOVERNING BOARDS OF THE UNIVERSITIES may JOINTLY expend, 28 as it deems THEY DEEM expedient and as is not inconsistent with the 29 provisions of any appropriation, the income of the land funds established 30 pursuant to the enabling act in accordance with the purposes specified in 31 the enabling act for each land fund specified in section 15-1662. 32

B. Beginning with the 1998-1999 fiscal year, the universities land 33 fund shall be known as the eminent scholars matching grant fund and shall 34 consist of the annual income from the universities land fund. The eminent 35 scholars matching grant fund shall be used to provide to the universities 36 matching monies for the interest earned on nonpublic endowment monies 37 donated to attract and retain eminent faculty. Appropriations to the 38 Arizona board of regents GOVERNING BOARDS OF THE UNIVERSITIES for the 39 eminent scholars matching grant fund shall commence in the 1998-1999 40 fiscal year. The eminent scholars matching grant fund shall be allocated 41 as follows: 42

1. Monies in the eminent scholars matching grant fund shall be used 43 to supplement and not supplant any other sources of monies for the 44 universities. Monies shall be allocated to each university on a 45

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dollar-for-dollar match basis. The amount allocated shall be equal to the 1 amount of interest earned in the previous calendar year by each university 2 on the nonpublic endowment monies THAT ARE donated from and after December 3 31, 1997 which AND THAT are designated by the universities as being solely 4 for the purpose of attracting and retaining eminent faculty. 5

2. If the monies appropriated by the legislature for the eminent 6 scholars matching grant fund are greater than the amount of interest 7 earned on the nonpublic endowment monies designated by the universities 8 for expenditure as provided in this subsection, the board GOVERNING BOARDS 9 may JOINTLY allocate the excess monies as provided in subsection A of this 10 section. 11

3. If the monies appropriated by the legislature for the eminent 12 scholars matching grant fund are less than the amount of interest earned 13 on the nonpublic endowment monies designated by the universities for 14 expenditure as provided in this subsection, the board GOVERNING BOARDS 15 shall JOINTLY allocate the monies to each university in a manner deemed 16 appropriate. 17


15-1664. Expenditure of monies 20 All monies for the use and benefit of an institution under its 21

jurisdiction A PUBLIC UNIVERSITY IN THIS STATE shall be expended under the 22 direction and control of the Arizona board of regents GOVERNING BOARD OF 23 THAT UNIVERSITY for the support and maintenance of such institution, THAT 24 UNIVERSITY AND FOR buildings and grounds, and for any other purpose the 25 GOVERNING board deems expedient if not inconsistent with provisions of any 26 appropriations. 27


15-1665. Acceptance of federal and other monies 30 The Arizona board of regents GOVERNING BOARD OF A UNIVERSITY may 31

accept grants of monies from the United States or any of its officers or 32 agencies designated or created to make grants for public construction 33 work, or from any individual, group of individuals, corporation or 34 association. 35


15-1667. Federal aid to experiment stations 38 The THIS state assents to the provisions and accepts the benefits of 39

the act of Congress entitled "an act to authorize the more complete 40 endowment of agricultural experiment stations and for other purposes, 41 approved February 24, 1925." HATCH ACT OF 1887, AS AMENDED (ACT OF MAR. 42 2, 1887; CH. 314; 24 STAT. 440; 7 UNITED STATES CODE SECTIONS 361a THROUGH 43 361i). The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY is 44 designated as a state board for the purposes of this section and is 45

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empowered to cooperate with agencies of the federal government in 1 administering the federal law. 2


15-1669. Payment of salaries; sick leave 5 A. The Arizona board of regents GOVERNING BOARD OF A UNIVERSITY may 6

provide for payment of annual salaries of any person appointed or employed 7 as provided in section 15-1626, subsection A, paragraph 2, over a twelve 8 month TWELVE-MONTH pay period pursuant to agreement between such THE 9 person and the GOVERNING board. 10

B. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY 11 shall require institutions THE UNIVERSITY under its jurisdiction, as part 12 of payroll reporting procedures, to identify and report hours of sick 13 leave earned by any person appointed or employed as provided in section 14 15-1626, subsection A, paragraph 2, and absences on account of sickness. 15 Compensation paid to employees on account of sickness shall be so 16 identified in the accounting records of the institution UNIVERSITY. 17


15-1681. Definitions 20 In this article, unless the context otherwise requires: 21 1. "Acquire" includes to purchase, lease, lease-purchase, erect, 22

build, construct, reconstruct, raze, remodel, repair, replace, alter, 23 extend, expand, better, equip, furnish, develop, improve and embellish a 24 project, and the acquisition, preparation and development of a site or 25 sites therefor. 26

2. "Board" means the Arizona board of regents GOVERNING BOARD OF A 27 UNIVERSITY or its successor. 28

3. "Bonds" means any bonds issued pursuant to this article. 29 4. "Component unit" means an entity for which the nature and 30

significance of its relationship with the A board or institution is such 31 that exclusion would cause the board's or institution's financial 32 statements to be misleading or incomplete. 33

5. "Federal agency" means the United States of America, the 34 president of the United States of America, the department of housing and 35 urban development or such other agency or agencies of the United States of 36 America as may be designated or created to make loans or grants, or both. 37

6. "Indirect or third party financing": 38 (a) Means an agreement between the A board or an institution and a 39

component unit of an institution, a nonprofit organization or a private 40 developer in which the component unit, organization or developer pays for, 41 issues bonds for or enters into lease or lease-purchase agreements for: 42

(i) Capital projects on the property of an institution. 43 (ii) Capital projects intended to house any institution activities. 44

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(iii) Capital projects in which the A board or institution 1 guarantees revenues to the component unit, organization or developer or 2 debt service payments on behalf of the component unit, organization or 3 developer. 4

(iv) Capital projects, which may eventually become state assets. 5 (b) Does not include a project that is intended to be commercial in 6

nature, and if the majority of the project's business is anticipated to 7 come from the nonuniversity population. 8

7. "Institution" means the university of Arizona, Arizona state 9 university and northern Arizona university or any other college or 10 university under the jurisdiction and control of the A board or its 11 successor. 12

8. "Project" means and includes buildings, structures, areas and 13 facilities which THAT, as determined by the A board, are required by or 14 necessary for the use or benefit of each of such institutions, including, 15 without limiting the generality of the foregoing, student, faculty or 16 staff housing facilities, residence halls, dormitories and apartments; 17 student union and recreational buildings and stadiums; other facilities 18 for student, faculty or staff services; any facility or building leased to 19 the United States of America; parking garages and areas; offices, 20 classrooms, laboratories, dining halls and food service facilities, 21 libraries, auditoriums, or parts thereof, or additions or extensions 22 thereto; heating, lighting and other utility service facilities in 23 connection therewith, or parts thereof, or additions or extensions 24 thereto; whether heretofore acquired and now or hereafter used for any or 25 all of the purposes aforesaid, or as may be hereafter acquired under this 26 article, with all equipment and appurtenant facilities; or any one, or 27 more than one, or all of the foregoing, or any combination thereof, for 28 any institution, including sites therefor. 29

9. "System of building facilities" means such A project or projects 30 as the A board by resolution shall collectively designate to be included 31 in a system of building facilities at each institution, either: 32

(a) Hereafter acquired for each of such institutions under the 33 terms of this article. 34

(b) Heretofore acquired for each of such institutions prior to 35 May 17, 1974 under the terms of any other law and now located on the 36 campus of each of such institutions, whether unencumbered by or encumbered 37 by a pledge of and lien on the income and revenues derived from the 38 operation thereof for the payment of any bonds theretofore issued by the A 39 board for the acquisition thereof. 40

(c) As provided in both subdivisions (a) and (b) of this paragraph. 41 (d) Any combination of as provided in subdivisions (a), (b) and (c) 42

of this paragraph. 43

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15-1682.03. University capital improvement lease-to-own and 3 bond fund; lease-to-own and bond capital 4 improvement agreements 5

A. The university capital improvement lease-to-own and bond fund is 6 established consisting of the monies provided by the Arizona board of 7 regents GOVERNING BOARDS OF THE UNIVERSITIES pursuant to this section, 8 monies deposited pursuant to section 5-572 and monies appropriated by the 9 legislature. The board shall administer the fund. On notice from the 10 board, the state treasurer shall invest and divest monies in the fund as 11 provided by section 35-313, and monies earned from investment shall be 12 credited to the fund. Monies in the fund are exempt from the provisions 13 of section 35-190 relating to lapsing of appropriations. 14

B. Through revenues of the state university system, the board 15 GOVERNING BOARDS OF THE UNIVERSITIES shall annually provide monies to the 16 fund of at least twenty per cent PERCENT of the aggregate annual payments 17 of lease-to-own and bond agreements entered into by the board pursuant to 18 this section. 19

C. The board shall distribute monies in the fund to make payments 20 pursuant to lease-to-own and bond agreements entered into by the board 21 pursuant to this section. The board may enter into lease-to-own and bond 22 agreements for the purposes of building renewal projects and new 23 facilities. New lease-to-own and bond agreements entered into pursuant to 24 this section shall not exceed one hundred sixty-seven million six hundred 25 seventy-one thousand two hundred dollars in fiscal year 2008-2009 and four 26 hundred million dollars in fiscal year 2009-2010. The board may enter 27 into lease-to-own and bond transactions up to a maximum of eight hundred 28 million dollars. 29

D. Notwithstanding section 5-572, subsection G F, the amount of 30 state lottery revenues distributed to the university capital improvement 31 lease-to-own and bond fund in fiscal year 2009-2010 and fiscal year 32 2010-2011 shall not exceed an amount sufficient for up to eighty per cent 33 PERCENT of the annual payments of the first one hundred sixty-seven 34 million six hundred seventy-one thousand two hundred dollars of new 35 lease-to-own and bond agreements entered into pursuant to this section. 36 The full amount of state lottery revenues distributed to the university 37 capital improvement lease-to-own and bond fund pursuant to section 5-572, 38 subsection G F shall be made available to the board for the remaining new 39 lease-to-own and bond agreements up to eight hundred million dollars 40 beginning in fiscal year 2011-2012. 41

E. In entering into lease-to-own and bond agreements pursuant to 42 this section, the board shall not obligate this state to provide any 43 additional monies from the state lottery fund above the amounts authorized 44 in this section and section 5-572, subsection G F. In entering into 45

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lease-to-own and bond agreements pursuant to this section, the board shall 1 not obligate any state general fund monies. 2


15-1741. Definitions 5 In this article, unless the context otherwise requires: 6 1. "Board" means the Arizona board of regents GOVERNING BOARD OF A 7

UNIVERSITY or its successor. 8 2. "Commission" means the western interstate commission for higher 9

education. 10 3. "Compact" means the compact for western regional cooperation in 11

higher education. 12 Sec. 89. Section 15-1743, Arizona Revised Statutes, is amended to 13

read: 14 15-1743. Authorizing agreements for education of Arizona 15

students outside compact area; limitations 16 A. The western interstate commission for higher education is 17

authorized to act on behalf of this state in making arrangements for the 18 placement of students in institutions and programs of higher learning 19 outside the states which THAT are parties to the compact for establishing 20 the commission. For that purpose, the commission may negotiate and enter 21 into arrangements and contracts with the Arizona board of regents A BOARD, 22 with public and private educational institutions and agencies and with 23 other states. These arrangements and contracts may provide for the 24 obtaining of one or more places for students on either a special or 25 continuing basis; the payment of partial or full tuition and other charges 26 not to exceed the cost of agreements within the compact area; and the 27 furnishing of reciprocal, compensating or other advantages and benefits in 28 support of the educational program involved. 29

B. The authority conferred by subsection A OF THIS SECTION shall be 30 exercised only pursuant to A written agreement between the commission and 31 the Arizona board of regents A BOARD. Any such agreements shall include 32 provisions for the payment of tuition and any other costs, and no such 33 agreement shall be made which THAT commits this state or any agency or 34 officer of it THIS STATE to any obligation for which funds have not been 35 appropriated or otherwise made available in accordance with law. 36

C. Nothing in this section alters any of the obligations or 37 restricts or impairs any rights which THAT this state may have under the 38 compact establishing the commission. 39


15-1747. Reciprocity agreement for distance education; 42 definition 43

A. The Arizona board of regents GOVERNING BOARD OF A UNIVERSITY, 44 community college districts and the state board for private postsecondary 45

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education, through intergovernmental agreement, may enter into an 1 interstate reciprocity agreement for the purpose of managing postsecondary 2 distance education. 3

B. The intergovernmental agreement pursuant to subsection A of this 4 section, at a minimum, must identify the process for the application to 5 participate in the interstate reciprocity agreement and be administered 6 jointly by representatives from the Arizona board of regents GOVERNING 7 BOARD OF A UNIVERSITY, representatives from the state board for private 8 postsecondary education and representatives from a community college 9 district in this state. The terms of the intergovernmental agreement 10 shall be agreed to unanimously by the Arizona board of regents GOVERNING 11 BOARD OF A UNIVERSITY, the state board for private postsecondary education 12 and a community college district in this state. 13

C. The responsibilities designated through intergovernmental 14 agreement pursuant to subsection A of this section must be limited to the 15 administration of the distance education reciprocity agreement for 16 participating postsecondary institutions that have a principal place of 17 business in this state. 18

D. For the purposes of this section, "postsecondary institution" 19 means any accredited, degree-granting public or private university or 20 college located in this state, any accredited degree-granting community 21 college located in this state and any accredited degree-granting college 22 or university located on and operated by a federally recognized Indian 23 tribe. 24


15-1754. Rural health professions program; definition 27 A. The three PUBLIC universities under the jurisdiction of the 28

Arizona board of regents IN THIS STATE shall select ten nurse practitioner 29 students, fifteen medical students and four pharmacy students each year to 30 participate in a rural health professions program. The three universities 31 shall develop application procedures for students to apply for voluntary 32 participation in the program. The three universities shall attempt to 33 ensure that each individual participating student be IS able to fulfill 34 the program requirements in a single rural practice setting. 35

B. The university of Arizona shall choose the fifteen medical 36 students, four pharmacy students and four nurse practitioner students, 37 Arizona state university shall choose four nurse practitioner students, 38 and northern Arizona university shall choose two nurse practitioner 39 students who will participate at the respective universities. 40

C. Pharmacy students and medical students selected to participate 41 in the program shall be placed in a rural practice or rural location in 42 this state. Each placement shall be for a duration of at least one month 43 and shall occur during the summer months between academic years, as part 44

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of the required curriculum during a clinical clerkship and in the final 1 year of training. 2

D. Nurse practitioner students selected to participate in the 3 program shall be placed in a rural practice or rural location in this 4 state during the summer months between the first and second year of their 5 academic instruction. A participating nurse practitioner student's 6 internship shall also be conducted in a clinical setting located in a 7 rural area of this state. 8

E. Students who participate in the program shall be teamed with two 9 mentors throughout their period of academic instruction. The mentors 10 shall provide guidance and counseling to students who participate in the 11 program concerning the fulfillment of rural health professions program 12 requirements, the selection of elective curricula and the selection of 13 residency programs or internships. One of the faculty mentors shall be a 14 physician, pharmacist or nurse who works closely with the participating 15 student during the student's rural placement, and one of the mentors shall 16 be a faculty member of the university where the program participant is 17 enrolled. At least one of the mentors shall be available at all times to 18 support the student's interest in rural health care. 19

F. For purposes of this section, "rural" means either: 20 1. A county with a population of less than four hundred thousand 21

persons according to the most recent United States decennial census. 22 2. A census county division with less than fifty thousand persons 23

in a county with a population of four hundred thousand or more persons 24 according to the most recent United States decennial census. 25


15-1781. Definitions 28 In this article, unless the context otherwise requires: 29 1. "Commission" means the commission for postsecondary education. 30 2. "Low-income school" means a public school in this state at which 31

sixty percent or more of the students are eligible for free or reduced 32 price lunches under the national school lunch and child nutrition acts 33 (42 United States Code sections 1751 through 1785). 34

3. "Qualified applicant" or "qualified student" means an Arizona 35 resident who is a citizen or legal resident of the United States or who is 36 otherwise lawfully present in the United States, who attends a qualifying 37 postsecondary institution and, if attending a PUBLIC university under the 38 jurisdiction of the Arizona board of regents IN THIS STATE, who qualifies 39 for in-state tuition pursuant to section 15-1802. 40

4. "Qualifying postsecondary institution" means a regionally or 41 nationally accredited public or private postsecondary educational 42 institution in this state. 43

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5. "Rural school" means a public school in this state that is 1 located in a county with a population of less than three hundred thousand 2 persons. 3


15-1802. In-state student status 6 A. Except as otherwise provided in this article, no person having a 7

domicile elsewhere than in this state is eligible for classification as an 8 in-state student for tuition purposes. 9

B. A person is not entitled to classification as an in-state 10 student until the person is domiciled in this state for one year, except 11 that a person whose domicile is in this state is entitled to 12 classification as an in-state student if the person meets one of the 13 following requirements: 14

1. The domicile of the person's parent is in this state and the 15 parent is entitled to claim the person as an exemption for state and 16 federal tax purposes. 17

2. The person is an employee of an employer that transferred the 18 person to this state for employment purposes or the person is the spouse 19 of such an employee. 20

3. The person is an employee of a school district in this state and 21 is under contract to teach on a full-time basis or is employed as a 22 full-time noncertified classroom aide at a school within that school 23 district. For the purposes of this paragraph, the person is eligible for 24 classification as an in-state student only for courses necessary to 25 complete the requirements for certification by the state board of 26 education to teach in a school district in this state. No member of the 27 person's family is eligible for classification as an in-state student if 28 the person is eligible for classification as an in-state student pursuant 29 to this paragraph, unless the family member is otherwise eligible for 30 classification as an in-state student pursuant to this section. 31

4. The person's spouse has established domicile in this state for 32 at least one year, has demonstrated intent and financial independence and 33 is entitled to claim the student as an exemption for state and federal tax 34 purposes or the person's spouse was temporarily out of state for 35 educational purposes, but maintained a domicile in this state. If the 36 person is a noncitizen, the person must be in an eligible visa status 37 pursuant to federal law to classify as an in-state student for tuition 38 purposes. 39

C. The domicile of an unemancipated person is that of the person's 40 parent. 41

D. Any unemancipated person who remains in this state when the 42 person's parent, who had been domiciled in this state, removes from this 43 state is entitled to classification as an in-state student until 44

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attainment of the degree for which the person is currently enrolled, as 1 long as the person maintains continuous attendance. 2

E. A person who is a member of the armed forces of the United 3 States and who is stationed in this state pursuant to military orders or 4 who is the spouse or a dependent child as defined in section 43-1001 of a 5 person who is a member of the armed forces of the United States and who is 6 stationed in this state pursuant to military orders is entitled to 7 classification as an in-state student. A spouse or a dependent child does 8 not lose in-state student classification under this subsection if the 9 spouse or dependent child qualifies for in-state tuition classification at 10 the time the spouse or dependent child is accepted for admission to a 11 community college under the jurisdiction of a community college district 12 governing board or a PUBLIC university under the jurisdiction of the 13 Arizona board of regents IN THIS STATE. The student, while in continuous 14 attendance toward the degree for which currently enrolled, does not lose 15 in-state student classification. 16

F. A person who is a member of the armed forces of the United 17 States or the spouse or a dependent as defined in section 43-1001 of a 18 member of the armed forces of the United States is entitled to 19 classification as an in-state student if the member of the armed forces 20 has claimed this state as the person's state of legal residence for at 21 least twelve consecutive months before the member of the armed forces, 22 spouse or dependent enrolls in a PUBLIC university under the jurisdiction 23 of the Arizona board of regents IN THIS STATE or a community college under 24 the jurisdiction of a community college district governing board. For the 25 purposes of this subsection, the requirement that a person be domiciled in 26 this state for one year before enrollment to qualify for in-state student 27 classification does not apply. 28

G. A person holding an honorable discharge from the uniformed 29 services of the United States from either active duty or reserve or 30 national guard status, or who has retired from active duty or reserve or 31 national guard status, shall be granted immediate classification as an 32 in-state student and, while continuously enrolled, does not lose in-state 33 student classification if the person has demonstrated objective evidence 34 of intent to be a resident of Arizona that, for the purposes of this 35 section, includes at least one of the following: 36

1. Registration to vote in this state. 37 2. An Arizona driver license. 38 3. Arizona motor vehicle registration. 39 4. Employment history in Arizona. 40 5. Transfer of major banking services to Arizona. 41 6. Change of permanent address on all pertinent records. 42 7. Other materials of whatever kind or source relevant to domicile 43

or residency status. 44

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H. A person who meets any of the requirements prescribed in 1 subsection K of this section shall be granted immediate classification as 2 an in-state student and does not lose in-state student classification if 3 the person has demonstrated objective evidence of intent to be a resident 4 of this state that, for the purposes of this section, includes at least 5 one of the following: 6

1. Registration to vote in this state. 7 2. An Arizona driver license. 8 3. Arizona motor vehicle registration. 9 4. Employment history in Arizona. 10 5. Transfer of major banking services to Arizona. 11 6. Change of permanent address on all pertinent records. 12 7. Other materials of whatever kind or source relevant to domicile 13

or residency status. 14 I. A person who is a member of an Indian tribe recognized by the 15

United States department of the interior whose reservation land lies in 16 this state and extends into another state and who is a resident of the 17 reservation is entitled to classification as an in-state student. 18

J. A person who has participated in the AmeriCorps program or the 19 volunteers in service to America program for at least one year in this 20 state is entitled to classification as an in-state student. 21

K. A person who meets any of the following requirements is entitled 22 to immediate classification as an in-state student if that person has 23 demonstrated objective evidence of intent to be a resident of this state 24 as prescribed in subsection H of this section: 25

1. The person is a veteran as defined in title 38 of the United 26 States Code who, while using educational assistance under 38 United States 27 Code chapter 30 or 33, enrolls in a university under the jurisdiction of 28 the Arizona board of regents or a community college under the jurisdiction 29 of a community college district governing board within three years after 30 the veteran's discharge from active duty service of ninety or more days or 31 who remains continuously enrolled beyond the three-year period following 32 the discharge of the veteran. 33

2. The person does not meet the requirements prescribed in 34 paragraph 3 or 4 of this subsection and, while using educational 35 assistance under 38 United States Code chapter 30 or 33, enrolls in a 36 university under the jurisdiction of the Arizona board of regents or a 37 community college under the jurisdiction of a community college district 38 governing board within three years after the veteran's discharge from 39 active duty service of ninety or more days or remains continuously 40 enrolled beyond the three-year period following the discharge of the 41 veteran. 42

3. The person, while using benefits under the Marine Gunnery 43 Sergeant John David Fry Scholarship prescribed in 38 United States Code 44 section 3311(b)(9), enrolls in a university under the jurisdiction of the 45

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Arizona board of regents or a community college under the jurisdiction of 1 a community college district governing board. 2

4. The person, while using transferred Post/911 G.I. Bill benefits 3 pursuant to 38 United States Code section 3319 during a time in which the 4 transferor is a member of the uniformed services serving on active duty, 5 enrolls in a university under the jurisdiction of the Arizona board of 6 regents or a community college under the jurisdiction of a community 7 college district governing board. 8

5. The person is otherwise described in 38 United States Code 9 section 3679(c). 10


15-1804. Presumptions relating to student status; definition 13 A. Unless the contrary appears to the satisfaction of the 14

registering authority of the community college or university at which a 15 student is registering, it shall be presumed that: 16

1. No emancipated person has established a domicile in this state 17 while attending any educational institution in this state as a full-time 18 student, as such status is defined by subsection B OF THIS SECTION for 19 community college students or as defined by the Arizona board of regents 20 GOVERNING BOARD OF A UNIVERSITY for university students, in the absence of 21 a clear demonstration to the contrary. 22

2. Once established, a domicile is not lost by mere absence 23 unaccompanied by intention to establish a new domicile. 24

3. A person who has been domiciled in this state immediately prior 25 to becoming a member of the armed forces of the United States shall not 26 lose in-state status by reason of such person's presence in any other 27 state or country while a member of the armed forces of the United States. 28

B. For the purposes of this section, "full-time student" means a 29 community college student who registers for at least twelve semester hours 30 per semester at a community college in this state. 31


15-1805. Student status guidelines 34 A. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY 35

shall adopt guidelines applicable to all institutions under their 36 jurisdiction THAT UNIVERSITY that will ensure uniform criteria to aid the 37 institutions UNIVERSITY in determining the tuition status of any student 38 and that will establish uniform procedures for review of that status. 39

B. Community college districts shall adopt policies applicable to 40 all institutions under their jurisdiction that will ensure uniform 41 criteria to aid the institutions in determining the tuition status of any 42 student and that will establish uniform procedures for review of that 43 status. 44

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15-1806. Testimony concerning student status; designation of 3 persons to administer oaths 4

The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY and 5 each community college district shall designate a person employed at each 6 institution under their respective jurisdictions to administer oaths or 7 affirmations in connection with the taking of testimony relative to 8 student status for tuition purposes. 9


15-1808. Tuition waiver for child or spouse of peace officer, 12 correctional officer, firefighter, emergency 13 paramedic, national guard member or member of the 14 United States armed forces killed in the line of 15 duty; national guard members with disabilities; 16 United States armed forces members with 17 disabilities; definitions 18

A. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY, 19 after verification by the Arizona peace officers memorial board, by the 20 Arizona fallen firefighter memorial committee, by the adjutant general of 21 the national guard or by the Arizona department of veterans' services that 22 a person is a child or a spouse of a peace officer, correctional officer, 23 firefighter, emergency paramedic, national guard member or member of the 24 United States armed forces who was a resident of the state of Arizona or 25 stationed in Arizona and who was killed in the line of duty or who died 26 from injuries suffered in the line of duty while traveling to or from 27 duty, shall provide the person who qualifies under subsection B of this 28 section and who otherwise meets the qualifications for admission with a 29 tuition waiver scholarship at any THAT university under the jurisdiction 30 of the board. A district as defined in section 15-1401, after 31 verification by the Arizona peace officers memorial board, by the Arizona 32 fallen firefighter memorial committee, by the adjutant general of the 33 national guard or by the Arizona department of veterans' services that a 34 person is the child or the spouse of a peace officer, correctional 35 officer, firefighter, emergency paramedic, national guard member or member 36 of the United States armed forces who was a resident of Arizona or 37 stationed in Arizona and who was killed in the line of duty or who died 38 from injuries suffered in the line of duty while traveling to or from 39 duty, shall provide the person who qualifies under subsection B of this 40 section and who otherwise meets the qualifications for admission with a 41 tuition waiver scholarship at any community college under the jurisdiction 42 of the district. 43

B. The tuition waiver scholarships shall be limited to children who 44 are thirty years of age or younger or a spouse who has not remarried and 45

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shall be limited for a spouse or for any one child to not more than 1 sixty-four credit hours at Arizona community colleges and a total number 2 of credits including any transfer credits from an Arizona community 3 college equal to the number of credits required for a baccalaureate degree 4 at Arizona universities for that student's initially declared course of 5 study. 6

C. A member of the Arizona national guard who received a purple 7 heart citation on or after September 11, 2001 or a former member of the 8 Arizona national guard who was medically discharged from the Arizona 9 national guard due to an injury or disability suffered during status under 10 title 10, United States Code, in weekend training status, in annual 11 training status or in response to a state of emergency declared by the 12 governor is eligible for a tuition waiver scholarship provided for in this 13 section. 14

D. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY, 15 after verification by the Arizona department of veterans' services that a 16 person is a member or former member of the United States armed forces who 17 received a purple heart citation, who was a resident of the state of 18 Arizona or was stationed in Arizona at the time of the injury that 19 resulted in the purple heart citation and whose disability rating 20 determined by the United States department of veterans affairs is fifty 21 percent or more, shall provide the person who otherwise meets the 22 qualifications for admission with a tuition waiver scholarship at any THAT 23 university under the jurisdiction of the board. A district as defined in 24 section 15-1401, after verification by the Arizona department of veterans' 25 services that a person is a member or former member of the United States 26 armed forces who received a purple heart citation, who was a resident of 27 the state of Arizona or was stationed in Arizona at the time of the injury 28 that resulted in the purple heart citation and whose disability rating 29 determined by the United States department of veterans affairs is fifty 30 percent or more, shall provide the person who otherwise meets the 31 qualifications for admission with a tuition waiver scholarship at any 32 community college under the jurisdiction of the district. A person who is 33 convicted of a felony is ineligible for a tuition waiver scholarship 34 provided for in this subsection. 35

E. For the purposes of this section: 36 1. "Correctional officer" means a person, other than an elected 37

official, who is employed by this state or a county, city or town and who 38 is responsible for the supervision, protection, care, custody or control 39 of inmates in a state, county or municipal correctional institution, 40 including counselors but excluding secretarial, clerical and 41 professionally trained personnel. 42

2. "Emergency paramedic" means a person who has been trained in an 43 emergency paramedic training program certified by the director of the 44 department of health services or in an equivalent training program and who 45

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is certified by the director of the department of health services to 1 render services pursuant to section 36-2205. 2

3. "Firefighter" means a professional firefighter who is a member 3 of a state, federal, tribal, city, county, district or private fire 4 department. 5

4. "Peace officers" means sheriffs of counties, constables, 6 marshals, police officers of cities and towns, commissioned personnel of 7 the department of public safety and police officers appointed by community 8 college district governing boards or the Arizona board of regents 9 GOVERNING BOARD OF A UNIVERSITY who have received a certificate from the 10 Arizona peace officer standards and training board, and other state, 11 federal, tribal, city or county officers vested by law with a duty to 12 maintain public order and make arrests. 13


15-1809. Tuition waiver for persons formerly in foster care; 16 pilot program; report; definition 17

A. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY 18 shall develop a five-year pilot program to provide a tuition waiver 19 scholarship at any THAT university under the jurisdiction of the Arizona 20 board of regents and each community college district shall develop a 21 five-year pilot program to provide a tuition waiver scholarship at any 22 community college in that community college district to any person who 23 meets each of the following conditions: 24

1. Resides in this state. 25 2. Either: 26 (a) Is currently in foster care and is at least sixteen years 27

of age. 28 (b) Was in foster care when the person was at least sixteen years 29

of age. 30 (c) Was adopted from foster care and the adoption was finalized 31

after the person was sixteen years of age. 32 3. Is a United States citizen or is a noncitizen who is lawfully 33

present in this country. 34 4. Has total personal assets, not including scholarships or grants 35

received by the person, that are worth less than ten thousand dollars. 36 5. Is under twenty-three years of age. 37 6. Is accepted into or enrolled in a degree, certificate or other 38

accredited program at a PUBLIC university under the jurisdiction of the 39 Arizona board of regents IN THIS STATE or a community college under the 40 jurisdiction of a community college district. The person must demonstrate 41 continuous progress toward a degree or certificate in order to remain 42 eligible for a tuition waiver scholarship issued. 43

7. Has completed and submitted to the United States department of 44 education a free application for federal student aid before each year in 45

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which the person receives a tuition waiver scholarship pursuant to this 1 section. 2

8. After the first academic year in which the person receives a 3 tuition waiver scholarship pursuant to this section, annually completes at 4 least thirty hours of volunteer service during the previous academic year. 5

9. Remains in good standing with the policies established by the 6 university or community college at which the person is enrolled. 7

B. A tuition waiver scholarship provided pursuant to this section 8 shall be reduced by the amount of any other federal aid scholarships or 9 public grants and any other public aid received by that person from or 10 through the university or community college at which the person is 11 enrolled, except that a tuition waiver scholarship shall not be reduced by 12 the amount of federal grants received by the person from the department of 13 child safety under the Arizona education and training voucher program. 14

C. The auditor general shall review the pilot programs and on or 15 before June 30, 2017 shall submit a report to the governor, the president 16 of the senate and the speaker of the house of representatives that 17 evaluates the effectiveness of the pilot programs. The auditor general 18 shall provide a copy of this report to the secretary of state. 19

D. If the pilot program is terminated before a tuition waiver 20 scholarship recipient obtains an associate's ASSOCIATE degree, a 21 baccalaureate degree or a certificate and before the recipient reaches 22 twenty-three years of age, that person shall continue to be awarded a 23 tuition waiver scholarship until the person reaches twenty-three years of 24 age or obtains a baccalaureate degree, an associate's ASSOCIATE degree or 25 a certificate, whichever occurs first, if the person continues to meet the 26 scholarship criteria prescribed by this section. 27

E. For the purposes of this section, "tuition" means tuition and 28 mandatory fees charged by the university or community college. 29


15-1821. Special admission of students under eighteen years 32 of age; enrollment information; reports 33

A. Each community college district board shall adopt policies that 34 require community colleges under its jurisdiction to admit students under 35 age eighteen YEARS OF AGE who have not yet attained a high school diploma 36 or high school certificate of equivalency and who meet the established 37 requirements of the courses for which they enroll. The Arizona board of 38 regents GOVERNING BOARD OF EACH UNIVERSITY shall adopt rules that require 39 the universities under its jurisdiction to admit students under age 40 eighteen YEARS OF AGE who have not yet attained a high school diploma or 41 high school certificate of equivalency and who meet the established 42 requirements of the courses for which they enroll. 43

B. The policies and rules as provided in subsection A of this 44 section shall include the following provisions: 45

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1. A student under age eighteen YEARS OF AGE shall not be denied 1 admission because of age, lack of a high school diploma or high school 2 certificate of equivalency, grade in school, lack of permission of school 3 officials or lack of concurrent enrollment in a public or private school, 4 if the student has achieved at least a specified score on a college 5 entrance examination. 6

2. A community college or university that admits a student pursuant 7 to paragraph 1 of this subsection may limit the number of semester credit 8 hours in which the student may enroll to no less than six semester credit 9 hours. 10

3. A student admitted to a community college or university pursuant 11 to paragraph 1 of this subsection is not guaranteed admission to a 12 specific degree program or to all courses offered by the community college 13 or university. 14

C. Each community college district and the Arizona board of regents 15 GOVERNING BOARD OF EACH UNIVERSITY shall provide all high schools in this 16 state with information that describes the policies and rules, as 17 appropriate, the types of courses available and other information related 18 to the enrollment of students under the age of eighteen YEARS OF AGE. 19 Each unified or high school district school shall make this information 20 available to all students in at least grades nine through twelve. 21

D. On or before November 15 of each year, the Arizona board of 22 regents GOVERNING BOARDS OF THE UNIVERSITIES shall JOINTLY submit a report 23 to the president of the senate, the speaker of the house of 24 representatives and the state board of education and shall provide a copy 25 of this report to the secretary of state on students under eighteen years 26 of age who had not yet attained a high school diploma or high school 27 certificate of equivalency and who were enrolled in a university course or 28 a program for university credit during the time period of September of the 29 previous fiscal year through August of the current fiscal year. The 30 annual report shall include at least the following: 31

1. The number of students who were enrolled. 32 2. A general narrative of the types of courses or programs in which 33

the students were enrolled. 34 3. The rules adopted pursuant to subsection A of this section. 35 E. On or before September 30 of each year, each institution under 36

the jurisdiction of the Arizona board of regents shall submit to the 37 Arizona board of regents in the form specified by the Arizona board of 38 regents the information that the Arizona board of regents needs to compile 39 the report required in subsection D of this section. 40


15-1821.01. Dual enrollment information 43 On a determination by a community college district governing board 44

that it is in the best interest of the citizens of a district, the 45

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district governing board may authorize district community colleges to 1 offer college courses that may be counted toward both high school and 2 college graduation requirements at the high school during the school day, 3 subject to the following: 4

1. The community college district governing board and the governing 5 board of the school district or organization of which the high school is a 6 part shall enter into an agreement or contract. These intergovernmental 7 agreements or contracts shall be based on a uniform format that has been 8 cooperatively developed by the community college districts in this state. 9 Each of these agreements or contracts shall clearly specify the following: 10

(a) The financial provisions of the agreement or contract and the 11 format for the billing of all services under the agreement or contract, 12 including the amount that the community college received in full-time 13 student equivalent funding pursuant to section 15-1466.01, the portion of 14 the funding that is distributed to the school district governing board or 15 charter school and any amount that is subsequently returned to the 16 community college district by the school district governing board or 17 charter school. 18

(b) Student tuition and financial aid policies, including if 19 WHETHER scholarships or grants are awarded to students in dual enrollment 20 courses from the community college. 21

(c) The accountability provisions for each party to the agreement 22 or contract. 23

(d) The responsibilities and services required of each party to the 24 agreement or contract. 25

(e) The type of instruction that will be provided under the 26 agreement or contract, including the titles of the courses to be offered. 27

(f) The quality of the instruction that will be provided under the 28 agreement or contract. 29

2. Students shall be admitted to the community college under the 30 policies adopted by each district, subject to the following: 31

(a) All students enrolled for college credit shall be high school 32 juniors or seniors. All students in the course, including those not 33 electing to enroll for college credit, shall satisfy the prerequisites for 34 the course as published in the college catalog and shall comply with 35 college policies regarding student placement in courses. 36

(b) A community college may waive the class status requirements 37 specified in subdivision (a) of this paragraph for up to twenty-five per 38 cent PERCENT of the students enrolled by a college in courses, provided 39 that the community college has an established written criteria for waiving 40 the requirements for each course. These criteria shall include a 41 demonstration, by an examination of the specific purposes and requirements 42 of the course, that freshman and sophomore students who meet course 43 prerequisites are prepared to benefit from the college level COLLEGE-LEVEL 44 course. All exceptions and the justification for the exceptions shall be 45

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reported annually to the joint legislative budget committee on or before 1 October 1. 2

3. The courses shall be previously evaluated and approved through 3 the curriculum approval process of the district, shall be at a higher 4 level than taught by the high school and shall be transferable to a PUBLIC 5 university under the jurisdiction of the Arizona board of regents IN THIS 6 STATE or be applicable to an established community college occupational 7 degree or certificate program. Physical education courses shall ARE not 8 be available for dual enrollment purposes. 9

4. College approved COLLEGE-APPROVED textbooks, syllabuses, course 10 outlines and grading standards that are applicable to the courses if 11 taught at the community college shall apply to these courses and to all 12 students in the courses offered pursuant to this section. The chief 13 executive officer of each community college shall establish an advisory 14 committee of full-time faculty who teach in the disciplines offered at the 15 community college to assist in course selection and implementation in the 16 high schools and to review and report at least annually to the chief 17 executive officer whether the course goals and standards are understood, 18 the course guidelines are followed and the same standards of expectation 19 and assessment are applied to these courses as though they were being 20 offered at the community college. The advisory committee of full-time 21 faculty shall meet at least three times each academic year. 22

5. Each faculty member shall meet the requirements established by 23 the governing board pursuant to section 15-1444. The chief executive 24 officer of each community college district shall establish an advisory 25 committee of full-time faculty who teach in the disciplines offered at the 26 community college district to assist in the selection, orientation, 27 ongoing professional development and evaluation of faculty teaching 28 college courses in conjunction with the high schools. The advisory 29 committee of full-time faculty shall meet at least two times each academic 30 year. 31

6. A school district shall ensure that a pupil is a full-time 32 student as defined in section 15-901 and is enrolled in and attending a 33 full-time instructional program at a school in the school district before 34 that pupil is allowed to enroll in a college course pursuant to this 35 section, except that high school seniors who satisfy high school 36 graduation requirements with less than a full-time instructional program 37 shall be ARE exempt from this paragraph. 38


15-1822. Report; academic performance of high school 41 graduates 42

A. On or before October 31 OF EACH YEAR, each community college 43 district and the Arizona board of regents GOVERNING BOARD OF EACH 44 UNIVERSITY shall submit a report to the president of the senate, the 45

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speaker of the house of representatives, the superintendent of public 1 instruction and the state board of education and shall provide a copy of 2 this report to the secretary of state and the director of the Arizona 3 state library, archives and public records, on the academic performance of 4 the preceding year's graduates from high schools in this state enrolled in 5 institutions under their jurisdiction during the year ending on June 30 of 6 the current calendar year. The report shall include for each school at 7 least the following: 8

1. The number of graduates of the school who were enrolled in the 9 institution during the reporting period. 10

2. Information about the academic performance of graduates of the 11 school in mathematics and English courses. 12

B. On or before September 1, each institution under the 13 jurisdiction of the Arizona board of regents shall submit to the Arizona 14 board of regents in the form specified by the Arizona board of regents the 15 information that the Arizona board of regents needs to compile the report 16 required under this section. 17

C. B. The superintendent of public instruction shall provide each 18 high school in this state with a copy of the portion of the report that is 19 applicable to its graduates. 20


15-1823. Identification numbers; social security numbers 23 A. From and after June 30, 2002, If a PUBLIC university under the 24

jurisdiction of the Arizona board of regents IN THIS STATE assigns an 25 individual identification number to faculty, staff or students at a THE 26 university, the identification number shall not be identical to the 27 individual's social security number. Notwithstanding subsection B of this 28 section, If a student was IS assigned an identification number after 29 June 30, 2006, in connection with the student accountability information 30 system established by section 15-1041, the identification number assigned 31 to that student by the university shall correspond to or reference the 32 identification number assigned to that student in connection with the 33 student accountability information system. The student shall provide the 34 student accountability information system number to the university. The 35 school district or charter school shall provide the student with the 36 student accountability information system number upon ON request. The 37 university shall not allow the display of the individual's social security 38 number, or any four or more consecutive numbers contained in the 39 individual's social security number, on any internet site maintained by 40 the university or other publicly accessible document for any purpose. 41

B. If a community college or community college district assigns an 42 individual identification number to faculty, staff or students at a 43 community college that is identical to an individual's social security 44 number, the community college or community college district shall not 45

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allow the display of an individual's social security number, or any four 1 or more consecutive numbers contained in the individual's social security 2 number, on any internet site maintained by the community college or 3 community college district or other publicly accessible document for any 4 purpose. 5

C. Notwithstanding subsection B of this section, if a student was 6 IS assigned an identification number after June 30, 2006, in connection 7 with the student accountability information system established by section 8 15-1041, the identification number assigned to that student by the 9 community college or community college district shall correspond to or 10 reference the identification number assigned to that student in connection 11 with the student accountability information system. The student shall 12 provide the student accountability information system number to the 13 community college. The school district or charter school shall provide 14 the student with the student accountability information system number upon 15 ON request. A community college or community college district shall 16 assign any other student an identification number that is not identical to 17 the student's social security number. Beginning January 1, 2004, If a 18 high school student is enrolled in a college course offered by a community 19 college district pursuant to section 15-1821.01, the identification number 20 assigned to that student pursuant to this subsection shall correspond to 21 the identification number assigned to that student in connection with the 22 student accountability information system established by section 15-1041. 23 A community college or community college district shall notify students of 24 the option to obtain an individual identification number for no additional 25 fee that is not identical to an individual's social security number in 26 applications for admission, through telecommunications registration 27 procedures, and in college catalogs. Notification in catalogs shall occur 28 no later than June 30, 2000, or in the next printed edition of the catalog 29 after the current one in print, whichever is sooner. 30

D. On the request of a faculty or staff member, a community college 31 or community college district shall assign the faculty or staff member an 32 identification number that is not identical to the faculty or staff 33 member's social security number. A community college or community college 34 district shall provide notification to faculty and staff members of the 35 option to obtain an individual identification number that is not identical 36 to a faculty or staff member's social security number. 37

E. This section does not exempt any regulated institution from any 38 duty of compliance it may have with any federal law that may: 39

1. Regulate that institution's collection or use of social security 40 numbers. 41

2. Protect the privacy rights of faculty, staff or students. 42 F. This section does not prohibit the electronic transfer of 43

student transcripts between educational institutions. 44

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15-1824. Transfer articulation; course numbering; reports 3 A. The community college districts and universities shall cooperate 4

in operating a statewide articulation and transfer system, including the 5 process for transfer of lower division general education credits, general 6 elective credits and curriculum requirements for approved majors, to 7 facilitate the transfer of community college students to Arizona public 8 universities without a loss of credit toward a baccalaureate degree and to 9 ensure that the postsecondary education needs of students statewide are 10 met without unnecessary duplication of programs. 11

B. The community college districts and the PUBLIC universities 12 under the jurisdiction of the Arizona board of regents IN THIS STATE shall 13 develop and implement a shared numbering system which THAT identifies 14 courses that transfer from community colleges to Arizona public 15 universities toward a baccalaureate degree. 16

C. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY 17 and the community college districts shall submit an annual report of their 18 progress on both articulation and meeting statewide postsecondary 19 education needs to the joint legislative budget committee on or before 20 December 15 and shall provide a copy of this report to the secretary of 21 state. 22

Sec. 104. Subject to the requirements of article IV, part 1, 23 section 1, Constitution of Arizona, section 15-1825, Arizona Revised 24 Statutes, is amended to read: 25

15-1825. Prohibited financial assistance; reports 26 A. A person who is not a citizen of the United States, who is 27

without lawful immigration status and who is enrolled as a student at any 28 PUBLIC university under the jurisdiction of the Arizona board of regents 29 IN THIS STATE or at any community college under the jurisdiction of a 30 community college district in this state is not entitled to tuition 31 waivers, fee waivers, grants, scholarship assistance, financial aid, 32 tuition assistance or any other type of financial assistance that is 33 subsidized or paid in whole or in part with state monies. 34

B. Each community college and university shall report on 35 December 31 and June 30 of each year to the joint legislative budget 36 committee the total number of students who applied and the total number of 37 students who were not entitled to tuition waivers, fee waivers, grants, 38 scholarship assistance, financial aid, tuition assistance or any other 39 type of financial assistance that is subsidized or paid in whole or in 40 part with state monies under this section because the student was not a 41 citizen or legal resident of the United States or not lawfully present in 42 the United States. 43

C. This section shall be enforced without regard to race, religion, 44 gender, ethnicity or national origin. 45

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15-1831. Information on persons who have completed vocational 3 programs; definitions 4

A. The center for vocational education shall: 5 1. By the end of each calendar year publish and distribute a report 6

of the placement rates and average salaries earned by persons completing 7 vocational programs in this state during the prior fiscal year. This 8 report may include information on a program which THAT would be a 9 vocational program except that it was not completed by at least 10 twenty-five persons during the fiscal year. 11

2. Establish an advisory committee consisting of representatives of 12 both public and private institutions which THAT offer vocational programs. 13 The advisory committee shall advise the center FOR VOCATIONAL EDUCATION in 14 the implementation of this section. 15

3. Prescribe the format in which institutions which THAT offer 16 vocational programs shall provide the information necessary to produce the 17 report prescribed in paragraph 1 of this subsection. 18

B. In FOR THE PURPOSES OF this section, unless the context 19 otherwise requires: 20

1. "Center for vocational education" means the center for 21 vocational education at a PUBLIC university under the jurisdiction of the 22 Arizona board of regents IN THIS STATE designated JOINTLY by the board 23 GOVERNING BOARDS OF THE UNIVERSITIES. 24

2. "Vocational program" means a program that is completed by at 25 least twenty-five persons during the fiscal year and that is one of the 26 following: 27

(a) Operated by a community college district organized pursuant to 28 chapter 12 of this title and designated as a vocational program, including 29 vocational programs operated by a skill center. 30

(b) A private vocational program that is licensed pursuant to 31 section 32-3021 and that does not provide a baccalaureate degree. 32


15-1851. Commission for postsecondary education; purpose; 35 report; members; terms; powers and duties; 36 compensation; quorum; immunity; definition 37

A. The commission for postsecondary education is established and 38 shall administer the applicable programs identified under section 1203 of 39 the higher education act amendments of 1998 (P.L. 105-244), including the 40 leveraging educational assistance partnership program, the federal family 41 education loan program and the Paul Douglas teacher scholarships program, 42 and shall supervise the state guarantee agency under the higher education 43 act amendments of 1998. 44

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B. In addition to the responsibilities prescribed in subsection A 1 of this section, the commission shall: 2

1. Provide a forum to public and private postsecondary education 3 institutions for discussion of issues of mutual interest, including the 4 following: 5

(a) The postsecondary needs of unserved and underserved individuals 6 in this state. 7

(b) The resources of public and private institutions, organizations 8 and agencies that are located in this state and that are capable of 9 providing postsecondary education opportunities. 10

(c) Enrollment demand and public policy options to meet statewide 11 needs for postsecondary education services. 12

(d) Cooperative comprehensive instructional and capital planning. 13 2. Provide reports pursuant to this subsection on discussions of 14

issues of mutual interest. 15 3. Coordinate and promote collaborative studies on issues of mutual 16

interest to public and private postsecondary education institutions. 17 4. Compile and disseminate information to the public regarding 18

postsecondary education opportunities in this state. 19 5. Prepare an annual report that summarizes the results of the 20

commission's activities prescribed in this section and section 21 15-1852. The annual report shall be submitted to the speaker of the house 22 of representatives, the president of the senate, the governor and the 23 Arizona state library, archives and public records by December 28. 24

6. Administer the Arizona teacher student loan program established 25 by chapter 13, article 11 of this title. 26

C. The commission consists of the executive director of the Arizona 27 board of regents ONE MEMBER OF THE GOVERNING BOARD OF A UNIVERSITY WHO IS 28 JOINTLY SELECTED BY THE GOVERNING BOARDS OF THE UNIVERSITIES, the 29 executive director of the state board for private postsecondary education 30 and the following additional members who are appointed by the governor 31 pursuant to section 38-211: 32

1. Two members who hold senior executive or managerial positions in 33 a PUBLIC university under the jurisdiction of the Arizona board of regents 34 IN THIS STATE. 35

2. Two members who hold senior executive or managerial positions in 36 a community college district, one representing a community college 37 district in a county with a population of five hundred thousand persons or 38 more and one representing a community college district in a county with a 39 population of less than five hundred thousand persons. 40

3. Two members who hold senior executive or managerial positions in 41 private postsecondary institutions of higher education that are licensed 42 under title 32, chapter 30, that are located in this state, that offer 43 bachelor's or higher degrees and that are accredited by a regional 44

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accreditation agency approved by the United States department of 1 education. 2

4. Two members who hold senior executive or managerial positions in 3 private postsecondary institutions of higher education that are licensed 4 under title 32, chapter 30, that are located in this state, that offer 5 vocational education programs and that are accredited by a national 6 accreditation agency approved by the United States department of 7 education. 8

5. One member who holds a senior executive or managerial position 9 in a private cosmetology school that is licensed under title 32, chapter 10 5, that is located in this state, that offers cosmetology programs 11 approved by the board of cosmetology and that is accredited by a national 12 accreditation agency approved by the United States department of 13 education. 14

6. One member who holds a senior executive or managerial position 15 in an institution that is licensed under title 32, chapter 23 or under 14 16 Code of Federal Regulations part 147, that offers vocational education 17 programs at the postsecondary level, that is located in this state and 18 that is not an institution that is qualified under any other category. 19

7. One member who has held a senior executive or managerial level 20 position in commerce or industry in this state for at least three years 21 before the member's appointment and who is not qualified to serve under 22 any other category. 23

8. Two members who hold senior executive or managerial positions in 24 the high school education system in this state. 25

9. One member who is an owner, operator or administrator of a 26 charter school in this state. 27

D. Members of the commission appointed pursuant to subsection C, 28 paragraphs 1 through 9 of this section shall serve four-year terms. 29 Appointed members of the commission shall be residents of this state. 30 Appointed members of the commission at all times during their terms shall 31 continue to be eligible for appointment under the category that they were 32 appointed to represent. Terms of appointed members of the commission 33 begin on the third Monday in January. No appointed member of the 34 commission may serve more than two consecutive terms. 35

E. The executive director of the Arizona board of regents SELECTED 36 MEMBER OF THE GOVERNING BOARD OF A UNIVERSITY and the executive director 37 of the state board for private postsecondary education serve as members of 38 the commission during their respective terms of office and are not 39 eligible to vote with respect to the commission's review of any 40 postsecondary institution. 41

F. Members appointed pursuant to subsection C, paragraphs 1 through 42 9 of this section are eligible to receive compensation pursuant to section 43 38-611 for each day spent in the performance of commission duties and may 44

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be reimbursed for expenses properly incurred in connection with the 1 attendance at meetings or hearings of the commission. 2

G. The governor shall appoint a chairman from among the members of 3 the commission who shall serve a one-year term that begins on the third 4 Monday in January. 5

H. A majority of the members of the commission constitute a quorum 6 for the transaction of commission business. The vote of a majority of the 7 quorum constitutes authority for the commission to act. 8

I. Members of the commission are immune from personal liability 9 with respect to all actions that are taken in good faith and within the 10 scope of the commission's authority. 11

J. For the purposes of this section, "community college district" 12 means a community college district that is established pursuant to 13 sections 15-1402 and 15-1403 or section 15-1402.01 and that is a political 14 subdivision of this state. 15


15-1861. Definitions 18 In this article, unless the context otherwise requires: 19 1. "Community college" has the same meaning prescribed in section 20

15-1401. 21 2. "Public forum" includes both a traditional public forum, which 22

is any open, outdoor area on the campus of a university or community 23 college, and a designated public forum, which is any facility, building or 24 part of a building that the university or community college has opened to 25 students or student organizations for expression. 26

3. "University" means a PUBLIC university under the jurisdiction of 27 the Arizona board of regents IN THIS STATE. 28


15-1891. College course materials; information; definitions 31 A. The publisher of course materials shall provide the following 32

written information in accordance with the policies adopted by the Arizona 33 board of regents GOVERNING BOARD OF EACH UNIVERSITY and the governing 34 board of each community college district to faculty members and any other 35 employees who are in charge of selecting or adopting course materials for 36 a PUBLIC university under the jurisdiction of the Arizona board of regents 37 IN THIS STATE or a community college under the jurisdiction of a community 38 college district in this state whenever the publisher provides a faculty 39 member or employee with information about course materials: 40

1. A listing of relevant course materials offered by the publisher 41 and whether each of the course materials are IS offered in a bundled 42 package or sold separately. 43

2. The suggested retail price, the estimated wholesale price or the 44 price that the publisher makes available to the public for the course 45

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materials. The publisher may include the time period during which the 1 pricing is applicable. 2

3. The copyright dates of the previous edition if the copyright 3 dates do not appear in the course materials. 4

4. A summary of the substantive content differences between the 5 current edition of the course materials and the immediate previous 6 edition. 7

B. A PUBLIC university under the jurisdiction of the Arizona board 8 of regents IN THIS STATE or a community college under the jurisdiction of 9 a community college district in this state shall notify faculty members 10 and employees of the requirements pursuant to subsection A OF THIS SECTION 11 and adopt policies that instruct a faculty member or employee who is in 12 charge of selecting or adopting course materials to place orders with 13 sufficient lead time to enable the university or community college 14 district bookstore or contract managed bookstore to confirm the 15 availability of the requested materials. 16

C. On or before January 1, 2009, The Arizona board of regents 17 GOVERNING BOARD OF EACH UNIVERSITY and the governing board of each 18 community college district shall adopt policies that instruct faculty 19 members or any other employees who are in charge of adopting course 20 materials to make a request for information pursuant to subsection A OF 21 THIS SECTION. 22

D. No faculty member or employee of a PUBLIC university under the 23 jurisdiction of the Arizona board of regents IN THIS STATE or a community 24 college under the jurisdiction of a community college district in this 25 state shall demand or receive any payment, loan, advance, good or deposit 26 of money present or promised for selecting or purchasing specific course 27 materials required for coursework or instruction, except that the faculty 28 member or employee may receive: 29

1. Free review copies, complimentary teacher editions or 30 instructional materials that are not intended to be sold by any faculty, 31 staff or bookstore. 32

2. Royalties or other compensation from the sale of course 33 materials that include the faculty member's own writing or work. 34

3. Honoraria for academic peer review of course materials. 35 4. Training in the use of course materials and learning 36

technologies. 37 E. A book buyer or vendor of course materials shall not solicit a 38

faculty member or employee of a PUBLIC university under the jurisdiction 39 of the Arizona board of regents IN THIS STATE or a community college under 40 the jurisdiction of a community college district in this state for the 41 purpose of selling or trading a free sample copy or complimentary teacher 42 editions provided at no charge by a publisher to a faculty member or 43 employee. 44

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F. This section shall not be construed in a manner that violates 1 academic freedom. 2

G. For the purposes of this section: 3 1. "Book buyer" means any person or entity, including a university 4

or community college district bookstore, engaged in the purchase or sale 5 of course materials. 6

2. "Bundled" means one or more course materials that are packaged 7 together to be sold as course materials for a single price. 8

3. "Complimentary teacher editions" means a book with information 9 that is meant for the exclusive use of faculty members, commonly labeled 10 as an "instructor edition" or "instructor manual" and that contains 11 answers and solutions, test questions and pedagogical techniques. 12

4. "Course materials" means any textbook or other instructional 13 tool published for the purpose of classroom instruction and used for or in 14 conjunction with a course in a PUBLIC university under the jurisdiction of 15 the Arizona board of regents IN THIS STATE or a community college under 16 the jurisdiction of a community college district in this state. 17

5. "Publisher" means any publishing house, firm or company that 18 produces course materials. 19

6. "Sample copy" means any book that is the same as the regular 20 student edition. 21

7. "Substantive content" means portions of a college textbook, 22 including new chapters, additional eras of time, new themes or new subject 23 matter. 24

8. "Written information" means information provided on print 25 material. Written information includes electronic communication or 26 publication on a website. 27


15-1895. Voting information; postsecondary students 30 The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY in 31

consultation with the recognized student government of the universities 32 under its jurisdiction THAT UNIVERSITY and each community college district 33 governing board in consultation with the recognized student government at 34 a community college under its jurisdiction shall adopt a plan to increase 35 student voter registration and voting in elections that includes: 36

1. Information about on-campus voter registration and voting 37 opportunities made available in at least one of the following methods: 38

(a) During new student orientation. 39 (b) During the issuance of student identification cards. 40 (c) In admissions packets. 41 2. Voter registration materials at central campus locations and 42

high traffic areas. 43 3. Broad dissemination of information regarding: 44 (a) Voter registration deadlines. 45

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(b) Deadlines for delivering ballots by mail. 1 4. Links on institutional and administrative websites that direct 2

students to voter registration websites. 3 5. Directions on institutional and administrative websites that 4

detail the voter registration process. 5 6. Reasonable accommodations to county election officials for 6

on-campus polling locations. 7 7. Encouragement to student government organizations to coordinate 8

activities aimed at increasing voter registration and election turnout. 9 8. Policies, consistent with section 16-402, to allow AN excused 10

absence from classes for the purpose of voting. 11 9. In accordance with section 15-1633, policies that prohibit the 12

use of university resources and employees to influence elections. 13 10. An emphasis on efficiency and conservation of resources, 14

including reduced use of paper handouts and increased use of electronic 15 communication. 16


15-1896. Faculty employment decisions; religious and 19 political beliefs; definitions 20

A. In making employment decisions, a university or community 21 college shall take into account a faculty member's competence and 22 appropriate knowledge in the field of that faculty member's expertise in 23 order to foster a learning environment that respects a plurality of 24 methodologies and perspectives. A university or community college shall 25 not make employment decisions on the basis of a faculty member's political 26 or religious beliefs. 27

B. A university or community college shall not exclude a faculty 28 member from tenure or search committees or hiring committees on the basis 29 of that faculty member's political or religious beliefs. 30

C. For the purposes of this section: 31 1. "Community college" has the same meaning prescribed in section 32

15-1401. 33 2. "University" means a PUBLIC university under the jurisdiction of 34

the Arizona board of regents IN THIS STATE. 35 Sec. 111. Section 15-1898, Arizona Revised Statutes, is amended to 36

read: 37 15-1898. Awarding of academic and vocational credits; 38

policies; current and former military members; 39 definitions 40

A. Each community college district governing board shall develop 41 policies to require community colleges under the jurisdiction of the board 42 to award academic or vocational credit that a current or former member of 43 the United States military may use toward the pursuit of an associate 44

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degree or vocational certification. The number of academic or vocational 1 credits awarded shall be based on all of the following: 2

1. The member's length of time of active duty service in the United 3 States military. 4

2. Skills, knowledge and competencies the member acquired during 5 service in the United States military as determined by the board in 6 consultation with the department of veterans' services. 7

3. If the member provides a transcript, the requirements CRITERIA 8 prescribed in subsection C of this section. 9

B. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY 10 shall develop policies to require the universities under the jurisdiction 11 of the board THAT UNIVERSITY to award academic or vocational credit that a 12 current or former member of the United States military may use toward the 13 pursuit of a baccalaureate degree or vocational certification. The number 14 of academic or vocational credits awarded shall be based on all of the 15 following: 16

1. The member's length of time of active duty service in the United 17 States military. 18

2. Skills, knowledge and competencies the member acquired during 19 service in the United States military as determined by the board in 20 consultation with the department of veterans' services. 21

3. If the member provides a transcript, the requirements CRITERIA 22 prescribed in subsection C of this section. 23

C. Each PUBLIC university under the jurisdiction of the Arizona 24 board of regents IN THIS STATE and each community college under the 25 jurisdiction of a community college district governing board shall notify 26 an applicant for admission who is a current or former member of the United 27 States military that the applicant may: 28

1. Be eligible to receive academic or vocational credit for the 29 applicant's military training and education. 30

2. Submit a transcript of the applicant's military training and 31 education. The university or community college shall both: 32

(a) Evaluate the transcript and work in conjunction with the 33 department of veterans' services to assess and apply the applicant's 34 education, training and experience received through military duty or 35 service to academic or vocational credits in selected programs of study. 36

(b) Notify the applicant which credits from the transcript are 37 transferrable. 38

D. For the purposes of this section: 39 1. "Member of the United States military" or "member" means a 40

person who is currently serving or who has served in the United States air 41 force, army, navy, marine corps or coast guard, the national guard or a 42 reserve unit of any of these branches of the United States military. 43 Member of the United States military or member does not include a person 44 who was dishonorably discharged. 45

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2. "Transcript" includes a joint services transcript prepared for 1 the applicant. 2

Sec. 112. Section 15-2401, Arizona Revised Statutes, as amended by 3 Laws 2016, chapter 112, section 1 and chapter 353, section 1, is amended 4 to read: 5

15-2401. Definitions 6 In this chapter, unless the context otherwise requires: 7 1. "Annual education plan" means an initial individualized 8

evaluation and subsequent annual reviews that are developed for a 9 qualified student who meets the criteria specified in paragraph 7, 10 subdivision (a), item (i), (ii) or (iii) of this section to determine 11 ongoing annual eligibility through the school year in which the qualified 12 student reaches twenty-two years of age and whether the student may be 13 eligible pursuant to section 36-2981 and should be referred for 14 eligibility determination. 15

2. "Curriculum" means a complete course of study for content areas 16 or grade levels, including any supplemental materials required by the 17 curriculum, approved by the department. 18

3. "Department" means the department of education. 19 4. "Eligible postsecondary institution" means a community college 20

as defined in section 15-1401, a PUBLIC university under the jurisdiction 21 of the Arizona board of regents IN THIS STATE or an accredited private 22 postsecondary institution. 23

5. "Parent" means a resident of this state who is the parent or 24 legal guardian of a qualified student. 25

6. "Qualified school" means a nongovernmental primary or secondary 26 school or a preschool for pupils with disabilities that is located in this 27 state and that does not discriminate on the basis of race, color or 28 national origin. 29

7. "Qualified student" means a resident of this state who: 30 (a) Is any of the following: 31 (i) Identified as having a disability under section 504 of the 32

rehabilitation act of 1973 (29 United States Code section 794). 33 (ii) Identified by a school district or by an independent third 34

party pursuant to section 15-2403, subsection I as a child with a 35 disability as defined in section 15-731 or 15-761. 36

(iii) A child with a disability who is eligible to receive services 37 from a school district under section 15-763. 38

(iv) Attending a school or school district that has been assigned a 39 letter grade of D or F pursuant to section 15-241 or who is currently 40 eligible to attend kindergarten and who resides within the attendance 41 boundary of a school that has been assigned a letter grade of D or F 42 pursuant to section 15-241. 43

(v) A previous recipient of a scholarship issued pursuant to 44 section 15-891 or this section, unless the qualified student's parent has 45

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been removed from eligibility in the program for failure to comply 1 pursuant to section 15-2403, subsection C. 2

(vi) A child of a parent who is a member of the armed forces of the 3 United States and who is on active duty or was killed in the line of 4 duty. A child who meets the requirements of this item is not subject to 5 subdivision (b) of this paragraph. 6

(vii) A child who is a ward of the juvenile court and who is 7 residing with a prospective permanent placement pursuant to section 8-862 8 and the case plan is adoption or permanent guardianship. 9

(viii) A child who was a ward of the juvenile court and who 10 achieved permanency through adoption or permanent guardianship. 11

(ix) A child who is the sibling of a current or previous 12 empowerment scholarship account recipient or of an eligible qualified 13 student who accepts the terms of and enrolls in the empowerment 14 scholarship program. 15

(x) A child who resides within the boundaries of an Indian 16 reservation in this state as determined by the department of education or 17 a tribal government. 18

(xi) A child of a parent who is legally blind pursuant to section 19 41-1973, subsection C or deaf or hard of hearing pursuant to AS DEFINED IN 20 section 36-1941. 21

(b) And, except as provided in subdivision (a), item (vi) of this 22 paragraph, who meets any of the following requirements: 23

(i) Attended a governmental primary or secondary school as a 24 full-time student as defined in section 15-901 for at least the first one 25 hundred days of the prior fiscal year and who transferred from a 26 governmental primary or secondary school under a contract to participate 27 in an empowerment scholarship account. First, second and third grade 28 students who are enrolled in Arizona online instruction must receive four 29 hundred hours of logged instruction to be eligible pursuant to this item. 30 Fourth, fifth and sixth grade students who are enrolled in Arizona online 31 instruction must receive five hundred hours of logged instruction to be 32 eligible pursuant to this item. Seventh and eighth grade students who are 33 enrolled in Arizona online instruction must receive five hundred fifty 34 hours of logged instruction to be eligible pursuant to this item. High 35 school students who are enrolled in Arizona online instruction must 36 receive five hundred hours of logged instruction to be eligible pursuant 37 to this item. 38

(ii) Previously participated in the empowerment scholarship account 39 program. 40

(iii) Received a scholarship under section 43-1505 and who 41 continues to attend a qualified school if the student attended a 42 governmental primary or secondary school as a full-time student as defined 43 in section 15-901 for at least ninety days of the prior fiscal year or one 44 full semester prior to attending a qualified school. 45

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(iv) Was eligible for an Arizona scholarship for pupils with 1 disabilities and received monies from a school tuition organization 2 pursuant to section 43-1505 or received an Arizona scholarship for pupils 3 with disabilities but did not receive monies from a school tuition 4 organization pursuant to section 43-1505 and who continues to attend a 5 qualified school if the student attended a governmental primary or 6 secondary school as a full-time student as defined in section 15-901 for 7 at least ninety days of the prior fiscal year or one full semester prior 8 to attending a qualified school. 9

(v) Has not previously attended a governmental primary or secondary 10 school but is currently eligible to enroll in a kindergarten program in a 11 school district or charter school in this state or attended a program for 12 preschool children with disabilities. 13

(vi) Has not previously attended a governmental primary or 14 secondary school but is currently eligible to enroll in a program for 15 preschool children with disabilities in this state. 16

8. "Treasurer" means the office of the state treasurer. 17 Sec. 113. Section 15-2401, Arizona Revised Statutes, as amended by 18

Laws 2017, chapter 139, section 1, is amended to read: 19 15-2401. Definitions 20 In this chapter, unless the context otherwise requires: 21 1. "Curriculum" means a complete course of study for content areas 22

or grade levels, including any supplemental materials required by the 23 curriculum approved by the department. 24

2. "Department" means the department of education. 25 3. "Eligible postsecondary institution" means a community college 26

as defined in section 15-1401, a university under the jurisdiction of the 27 Arizona board of regents IN THIS STATE or an accredited private 28 postsecondary institution. 29

4. "Low-income student" means a child who is or was a ward of the 30 juvenile court pursuant to paragraph 7, subdivision (a), item (viii) or 31 (ix) of this section or a child who is a dependent of a family whose 32 federal adjusted gross income as reflected on the last state income tax 33 return that was required to be filed does not exceed two hundred fifty 34 percent of the federal poverty guidelines for that same year. 35

5. "Parent" means a resident of this state who is the parent or 36 legal guardian of a qualified student. 37

6. "Qualified school" means a nongovernmental primary or secondary 38 school or a preschool for pupils with disabilities that is located in this 39 state and that does not discriminate on the basis of race, color or 40 national origin. 41

7. "Qualified student" means a resident of this state who: 42 (a) Is any of the following: 43 (i) Identified as having a disability under section 504 of the 44

rehabilitation act of 1973 (29 United States Code section 794). 45

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(ii) Identified by a school district or by an independent third 1 party pursuant to section 15-2403, subsection I as a child with a 2 disability as defined in section 15-731 or 15-761. 3

(iii) A child with a disability who is eligible to receive services 4 from a school district under section 15-763. 5

(iv) Attending a school or school district that has been assigned a 6 letter grade of D or F pursuant to section 15-241. 7

(v) A child who is currently eligible to attend kindergarten and 8 who resides within the attendance boundary of a school or school district 9 that has been assigned a letter grade of D or F pursuant to section 10 15-241. 11

(vi) A previous recipient of a scholarship issued pursuant to 12 section 15-891 or this section, unless the qualified student's parent has 13 been removed from eligibility in the program for failure to comply 14 pursuant to section 15-2403, subsection C. 15

(vii) A child of a parent who is a member of the armed forces of 16 the United States and who is on active duty or was killed in the line of 17 duty. A child who meets the requirements of this item is not subject to 18 subdivision (b) of this paragraph. 19

(viii) A child who is a ward of the juvenile court and who is 20 residing with a prospective permanent placement pursuant to section 8-862 21 and the case plan is adoption or permanent guardianship. 22

(ix) A child who was a ward of the juvenile court and who achieved 23 permanency through adoption or permanent guardianship. 24

(x) A child who is the sibling of a current or previous empowerment 25 scholarship account recipient or of an eligible qualified student who 26 accepts the terms of and enrolls in an empowerment scholarship account. 27

(xi) A child who resides within the boundaries of an Indian 28 reservation in this state as determined by the department of education or 29 a tribal government. 30

(xii) A child of a parent who is legally blind or is deaf or hard 31 of hearing as defined in section 36-1941. 32

(xiii) Beginning in the 2017-2018 school year, a child who 33 currently attends or is eligible to attend a public school in a 34 kindergarten program or any of grades one, six and nine. 35

(xiv) Beginning in the 2018-2019 school year, a child who currently 36 attends or is eligible to attend a public school in a kindergarten program 37 or any of grades one, two, six, seven, nine and ten. 38

(xv) Beginning in the 2019-2020 school year, a child who currently 39 attends or is eligible to attend a public school in a kindergarten program 40 or any of grades one through three and grades six through eleven. 41

(xvi) Beginning in the 2020-2021 school year, a child who currently 42 attends or is eligible to attend a public school in a kindergarten program 43 or any of grades one through twelve. 44

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(b) And, except as provided in subdivision (a), item (vii) of this 1 paragraph, who meets any of the following requirements: 2

(i) Attended a governmental primary or secondary school as a 3 full-time student as defined in section 15-901 for at least one hundred 4 days of the prior fiscal year and who transferred from a governmental 5 primary or secondary school under a contract to participate in an 6 empowerment scholarship account. First, second and third grade students 7 who are enrolled in Arizona online instruction must receive four hundred 8 hours of logged instruction to be eligible pursuant to this item. Fourth, 9 fifth and sixth grade students who are enrolled in Arizona online 10 instruction must receive five hundred hours of logged instruction to be 11 eligible pursuant to this item. Seventh and eighth grade students who are 12 enrolled in Arizona online instruction must receive five hundred fifty 13 hours of logged instruction to be eligible pursuant to this item. High 14 school students who are enrolled in Arizona online instruction must 15 receive five hundred hours of logged instruction to be eligible pursuant 16 to this item. The department may request a local education agency to 17 provide documentation or confirmation of the student attendance required 18 by this item, and the school shall comply with the department's request 19 within ten days. 20

(ii) Previously participated in an empowerment scholarship account. 21 (iii) Received a scholarship under section 43-1505 and who 22

continues to attend a qualified school if the student attended a 23 governmental primary or secondary school as a full-time student as defined 24 in section 15-901 for at least ninety days of the prior fiscal year or one 25 full semester prior to attending a qualified school. 26

(iv) Was eligible for an Arizona scholarship for pupils with 27 disabilities and received monies from a school tuition organization 28 pursuant to section 43-1505 or received an Arizona scholarship for pupils 29 with disabilities but did not receive monies from a school tuition 30 organization pursuant to section 43-1505 and who continues to attend a 31 qualified school if the student attended a governmental primary or 32 secondary school as a full-time student as defined in section 15-901 for 33 at least ninety days of the prior fiscal year or one full semester prior 34 to attending a qualified school. 35

(v) Has not previously attended a governmental primary or secondary 36 school but is currently eligible to enroll in a kindergarten program in a 37 school district or charter school in this state or attended a program for 38 preschool children with disabilities. For the purposes of this item, a 39 child is eligible to enroll in a kindergarten program if the child is at 40 least four but under seven years of age. 41

(vi) Has not previously attended a governmental primary or 42 secondary school but is currently eligible to enroll in a program for 43 preschool children with disabilities in this state. 44

8. "Treasurer" means the office of the state treasurer. 45

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17-491. Livestock loss board; members; terms; compensation; 3 annual report; board termination 4

A. The livestock loss board is established to address the 5 depredation of wolves on livestock operations. The livestock loss board 6 consists of the following members: 7

1. The director of the Arizona department of agriculture or the 8 director's designee. 9

2. The director of the Arizona game and fish department or the 10 director's designee. 11

3. Three members who represent the livestock industry, who have 12 knowledge and experience with wildlife impacts and management and who are 13 appointed by the governor pursuant to section 38-211. 14

4. Two members who represent wildlife conservation or wildlife 15 management, who have knowledge and experience with livestock production or 16 management and who are appointed by the governor pursuant to section 17 38-211. 18

5. One member who is a livestock auction market owner and who is 19 appointed by the speaker of the house of representatives. 20

6. One member who is a faculty member at a PUBLIC university under 21 the jurisdiction of the Arizona board of regents IN THIS STATE, who has 22 expertise in agricultural and life sciences and who is appointed by the 23 president of the senate. 24

B. The initial members of the livestock loss board who are 25 appointed pursuant to subsection A, paragraphs 3, 4, 5 and 6 of this 26 section shall assign themselves by lot to terms of two and four years in 27 office. All subsequent members serve four-year terms of office. The 28 chairperson shall notify the governor's office, the president of the 29 senate and the speaker of the house of representatives of these 30 appointments. 31

C. A majority of the members constitute a quorum. 32 D. The livestock loss board shall annually elect a chairperson from 33

its members. 34 E. Members of the livestock loss board are not eligible to receive 35

compensation but are eligible for reimbursement of expenses pursuant to 36 title 38, chapter 4, article 2. 37

F. The livestock loss board shall submit to the governor, the 38 president of the senate and the speaker of the house of representatives on 39 or before December 31 of each year a report of the number of applications 40 for compensation, the total amount of monies provided to landowners, 41 lessees and livestock operators that year and any recommendations. The 42 livestock loss board shall provide a copy of this report to the secretary 43 of state. 44

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G. The board established by this section ends on July 1, 2023 1 pursuant to section 41-3103. 2


18-101. Definitions 5 In this chapter, unless the context otherwise requires: 6 1. "Budget unit" means a department, commission, board, institution 7

or other agency of the state receiving, expending or disbursing state 8 funds or incurring obligations of the state, including the Arizona board 9 of regents but excluding the PUBLIC universities under the jurisdiction of 10 the Arizona board of regents, the community college districts and the 11 legislative or judicial branches. 12

2. "Committee" means the information technology authorization 13 committee. 14

3. "Department" means the department of administration. 15 4. "Director" means the director of the department. 16 5. "Disaster recovery" means the measures required to mitigate the 17

loss of information technology capability. 18 6. "Information technology" means all computerized and auxiliary 19

automated information processing, telecommunications and related 20 technology, including hardware, software, vendor support and related 21 services, equipment and projects. 22


23-391. Overtime pay; workweek 25 A. Subject to availability of appropriated funds, an employee of 26

this state or any political subdivision serving in a position determined 27 by the law enforcement merit system council, the director of the 28 department of administration, the Arizona board of regents GOVERNING BOARD 29 OF A UNIVERSITY, the board of directors for the Arizona state schools for 30 the deaf and the blind or the governing body of a political subdivision, 31 in the discretion of the board or body, to be eligible for overtime 32 compensation who is required to work in excess of the person's normal work 33 week WORKWEEK shall be compensated for the excess time at the following 34 rates: 35

1. One and one-half times the regular rate at which the person is 36 employed or one and one-half hours of compensatory time off for each hour 37 worked if overtime compensation is mandated by federal law. 38

2. If federal law does not mandate overtime compensation, the 39 person shall receive the regular rate of pay or compensatory leave on an 40 hour for hour HOUR-FOR-HOUR basis at the discretion of the board or 41 governing body. 42

B. Notwithstanding subsection A of this section, the state or a 43 political subdivision may provide, by action of the law enforcement merit 44 system council, the Arizona board of regents THE GOVERNING BOARD OF A 45

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UNIVERSITY, the board of directors for the Arizona state schools for the 1 deaf and the blind or the director of the department of administration in 2 the case of the state or of the governing body of the political 3 subdivision, for a work week WORKWEEK of forty hours in less than five 4 days for certain classes of employees employed by the state or the 5 political subdivision. 6

C. For state agencies of the state personnel system, unless 7 otherwise provided by law, the state work week WORKWEEK is the period of 8 seven consecutive days starting Saturday at 12:00 a.m. and ending Friday 9 at 11:59 p.m. Notwithstanding any other law, the director of the 10 department of administration may authorize a workday, for the method and 11 purpose of recording time entries to be included in a workweek and a pay 12 period for employees of this state who are in the correctional officer 13 class series of the state department of corrections AND who are regularly 14 scheduled to work a shift that spans two calendar days, defined as the day 15 a majority of the hours are regularly scheduled to be worked. If the 16 regularly scheduled hours are equally split between two calendar days, the 17 workday is defined as the day the shift ends. Scheduled shift start and 18 end times shall not be adjusted to avoid the payment of overtime. 19


23-722.04. Unemployment insurance information; disclosure; 22 violation; classification 23

A. The department or the office of economic opportunity may 24 disclose unemployment insurance information to the following entities: 25

1. Any federal, state or local governmental agency in the 26 investigation of fraud relating to public programs or the misuse of public 27 monies. 28

2. Divisions of the department, including the employment and 29 rehabilitation services administrations, for program and research 30 purposes. 31

3. The workforce Arizona council for program performance, regional 32 planning and other program and research purposes. 33

4. The department of education to evaluate adult education program 34 performance and for other primary and adult education program and research 35 purposes. 36

5. The Arizona board of regents GOVERNING BOARDS OF UNIVERSITIES, 37 PUBLIC universities under the jurisdiction of the Arizona board of regents 38 IN THIS STATE and community college districts to evaluate program 39 performance and for other program and research purposes. 40

6. The United States department of labor, or its agents, or the 41 United States census bureau, or its agents, as required by law or in 42 connection with the requirements imposed as a result of receiving federal 43 funding. 44

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7. Department contractors or subcontractors, or their agents, for 1 the sole purpose of providing for the processing, storage and transmission 2 of information. This disclosure must be consistent with this section. 3

8. The industrial commission of Arizona, department of insurance or 4 attorney general for use by those agencies, or their agents or 5 contractors, in the prevention, investigation and prosecution of workers' 6 compensation fraud. 7

B. On the request of one of the entities specified in subsection A 8 of this section to the department or the office of economic opportunity, 9 the department or the office of economic opportunity shall disclose 10 unemployment insurance information to the entity pursuant to guidelines 11 established by the workforce data task force established by section 12 41-5404 and pursuant to a written data sharing agreement with the 13 requesting entity in a form determined by the workforce data task force 14 pursuant to the laws of this state and applicable federal regulations. 15 The department or the office of economic opportunity may disclose the 16 unemployment insurance information only after the requesting entity has 17 demonstrated that the information will be kept confidential, except for 18 those purposes for which the information was provided to the requesting 19 entity, and that the requesting entity has security safeguards in place to 20 prevent the unauthorized disclosure of the information. 21

C. Except as otherwise allowed by law or as otherwise authorized by 22 agreement between the department of economic security and the United 23 States department of labor, the department of economic security or the 24 office of economic opportunity may not use federal unemployment insurance 25 grant monies to pay for any costs incurred in processing and handling 26 requests for disclosure of unemployment insurance information. The 27 department of economic security and the office of economic opportunity, in 28 consultation with the workforce data task force, shall establish a rate 29 structure that complies with 20 Code of Federal Regulations section 603.8 30 for costs incurred in processing requests for disclosure of unemployment 31 insurance information. 32

D. The requesting entity may not make public any unemployment 33 insurance information that identifies an individual or the individual's 34 employer. Any unauthorized disclosure, including security breaches, shall 35 be reported to the department and the office of economic opportunity 36 immediately. Any person who knowingly discloses confidential unemployment 37 insurance information in violation of this section without prior written 38 authorization from the department or the office of economic opportunity or 39 authorization as otherwise provided by law is guilty of a class 3 40 misdemeanor. 41

E. The office of economic opportunity may use unemployment 42 insurance information to perform economic analyses, for the development of 43 labor market information and a state workforce evaluation data system and 44 for other program and research purposes. 45

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F. This section does not prohibit disclosure that is required or 1 allowed by federal law. 2

Sec. 118. Section 27-102, Arizona Revised Statutes, as amended by 3 Laws 2016, chapter 128, section 5, is amended to read: 4

27-102. Arizona geological survey; state geologist; powers 5 A. The Arizona geological survey is established within the 6

university of Arizona with offices located in proximity to the university 7 of Arizona in Tucson. The state geologist shall administer the Arizona 8 geological survey and shall serve at the pleasure of the Arizona board of 9 regents GOVERNING BOARD OF THE UNIVERSITY OF ARIZONA. The state geologist 10 shall EITHER be REGISTERED AS A GEOLOGIST BY THE STATE BOARD OF TECHNICAL 11 REGISTRATION OR BE A TRAINED GEOLOGIST AS DEFINED IN SECTION 32-144, a 12 graduate of an accredited institution and otherwise qualified by education 13 and experience to direct the research and information functions of the 14 Arizona geological survey. 15

B. The state geologist may: 16 1. Engage the services of faculty members or students, and shall 17

have reasonable access to the data and other resources, of the university 18 of Arizona or any other state university in this state to conduct or 19 supervise research, experimentation or other related work of the Arizona 20 geological survey. 21

2. Organize field expeditions to perform work for the Arizona 22 geological survey using university students who are sufficiently advanced 23 in their study of geology to be able to perform satisfactory work. 24

3. Establish and appoint an advisory board consisting of 25 independent practicing geologists, university or college faculty, mining 26 geologists and others who use and rely on data, information and other 27 services of the Arizona geological survey. 28

4. Engage volunteer staff as necessary. 29 C. The expenses of the Arizona geological survey shall be paid by 30

annual appropriation from the state general fund and as otherwise provided 31 by this article. 32

Sec. 119. Repeal 33 Section 27-102, Arizona Revised Statutes, as amended by Laws 2016, 34

chapter 371, section 6, is repealed. 35 Sec. 120. Section 27-104, Arizona Revised Statutes, is amended to 36

read: 37 27-104. Qualifications of employees; private activities 38

relating to geological services prohibited 39 Qualifications of employees working with the Arizona geological 40

survey shall be prescribed by the Arizona board of regents GOVERNING BOARD 41 OF THE UNIVERSITY OF ARIZONA. Neither the state geologist nor any 42 employee working with the Arizona geological survey shall: 43

1. Acquire a pecuniary interest in any mineral resources property 44 in the state. 45

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2. Act as broker or agent for any purchaser, owner or agent of 1 mineral resources property, equipment or products. 2

3. Accept any commission or compensation for services rendered in 3 connection with industry in this state. 4

4. Make an investigation or report on an individual Arizona deposit 5 of mineral resources or metallurgical process other than pursuant to such 6 employee's official duties. 7


27-106. Duties of Arizona geological survey; mining, mineral 10 and natural resources educational museum 11

A. Under the operation, management and authority of the university 12 of Arizona, the Arizona geological survey shall: 13

1. Map and describe the bedrock and related geologic materials and 14 processes in this state, as follows: 15

(a) Prepare geologic maps that show the distribution of rock 16 formations and surficial materials at the surface and in the subsurface. 17

(b) Describe the character of rock and surficial materials, 18 including their age, origin and physical and chemical properties. 19

(c) Map, describe and monitor known and potential geologic hazards 20 and limitations to land and resource management. 21

(d) Map and characterize energy and mineral resources and identify 22 areas that may have potential for future discoveries. 23

2. Provide objective, scientific information about the geologic 24 character of this state as follows: 25

(a) Provide timely, courteous responses to requests for 26 information, advice and assistance from the public. 27

(b) Maintain a computerized bibliographic database of maps and 28 reports on the geology of this state that is accessible to the public. 29

(c) Maintain an internet website that includes information about 30 the Arizona geological survey, products and services available and the 31 geologic character of this state. 32

(d) Give lectures and talks, conduct workshops, lead field trips 33 and provide information and assistance to public, educational and 34 professional groups. 35

(e) Publish reports and other information, written in nontechnical 36 terms, to inform those who are not trained in geology about the geologic 37 character of this state. 38

3. Prepare all data files of known areas of earth fissures, produce 39 maps of those areas with overlays showing affected counties, cities, 40 towns, highways and streets and transmit the maps in printed and 41 electronic format to the state real estate department for purposes of 42 providing public access to the earth fissure maps pursuant to this 43 paragraph and section 32-2117. The Arizona geological survey shall 44 provide any map to any member of the public in printed or electronic 45

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format on request. The following notice shall be displayed below each 1 map: 2

Notice 3 The state of Arizona has made a reasonable effort to ensure 4 the accuracy of this map when it was produced, but errors may 5 be present and the state of Arizona does not guarantee its 6 accuracy. The map supplements, and is not a substitute for, a 7 professional inspection of property for defects and 8 conditions. 9 4. Operate and maintain a central repository and a computerized 10

database for reports, books, maps and other publications regarding the 11 geology, mining and mineral resources and associated technologies. Such 12 repository and database shall be available for the use of the public and 13 may be located at or connected with the university of Arizona or another 14 state university or agency of this state. All databases and other 15 archival materials shall be maintained in a secure and retrievable format 16 and at a location prescribed by the state geologist to protect and 17 preserve information from damage or destruction. 18

5. Utilize the services and expertise of the universities of this 19 state at the discretion of the state geologist. 20

6. Cooperate with local, county, state and federal agencies. 21 7. Provide quality mining data, evaluation and assistance relating 22

to mining and mineral development to the legislature, federal, state and 23 local governmental agencies and the public. 24

8. Serve as a source of mining information and data necessary or 25 advisable to attain its objectives. The Arizona board of regents 26 GOVERNING BOARD OF THE UNIVERSITY OF ARIZONA may establish reasonable fees 27 for publications and other services of the Arizona geological survey. 28

9. Cooperate with the Arizona corporation commission in its 29 investigations and administration of laws, relating to the sale of mining 30 securities. 31

B. In coordination with the mining, mineral and natural resources 32 educational museum advisory council established by section 27-111, the 33 university of Arizona shall operate and maintain a mining, mineral and 34 natural resources educational museum as the state depository for 35 collecting, cataloging and displaying mining, mineral and natural 36 resources artifacts and specimens. In connection with the mining, mineral 37 and natural resources educational museum, the university of Arizona may: 38

1. Promote the recognition and celebration of the historical, 39 cultural, economic and social contributions to this state made by the 40 mining, mineral and natural resources industries in this state, including 41 the livestock and agricultural industries. 42

2. Apply for and accept grants, gifts, bequests of legacies of real 43 or personal property, donations, including donations of time, services and 44 materials, or any other contribution, financial or otherwise, for use in 45

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accordance with the direction of the donor or, in the absence of an 1 express direction, as prescribed by the university of Arizona. Monies 2 received pursuant to this paragraph shall be deposited in a separate 3 mining, mineral and natural resources educational museum account in the 4 geological survey fund established by section 27-107 to be used 5 exclusively for the maintenance, restoration and operations of the mining, 6 mineral and natural resources educational museum. 7

3. Accept from the federal or state government, any local 8 government or any of their agencies restricted and unrestricted monies 9 made available to this state for the mining, mineral and natural resources 10 educational museum. 11

4. Establish and collect entrance fees to the mining, mineral and 12 natural resources educational museum. 13

5. Operate a retail gift shop, including the acquisition, purchase 14 and resale of mining, mineral and natural resources specimens and related 15 items. 16

6. Employ a curator for the mining, mineral and natural resources 17 educational museum who possesses knowledge or experience in natural 18 resources and operating a museum. 19

7. Operate educational programming for the mining, mineral and 20 natural resources educational museum. 21

8. Accept the services of volunteers and provide oversight for 22 their activities. 23

9. Pay the necessary maintenance and operation expenses of the 24 mining, mineral and natural resources educational museum. 25

C. The university of Arizona: 26 1. Under the advisement of the mining, mineral and natural 27

resources educational museum advisory council, shall adopt a collections 28 management policy that is consistent with national standards and best 29 practices for museums in the United States established by a national 30 association of museums. 31

2. Shall maintain the items, artifacts and other inventory received 32 for display or storage, including equipment and outdoor displays. 33

3. In coordination with the mining, mineral and natural resources 34 educational museum advisory council and pursuant to the standards and best 35 practices adopted pursuant to paragraph 1 of this subsection, may sell or 36 otherwise dispose of materials received for the mining, mineral and 37 natural resources educational museum. 38

4. Shall operate, manage and maintain the mining, mineral and 39 natural resources educational museum at the location where it is housed on 40 August 9, 2017 consistent with this article. 41

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27-108. Publications; deposit 3 A. The Arizona board of regents GOVERNING BOARD OF THE UNIVERSITY 4

OF ARIZONA, through the state geologist, may publish, in the form of 5 bulletins, circulars, maps and other related series, or otherwise make 6 available to state agencies, government officials, industry and the public 7 the results of geological and related research and investigation 8 undertaken by the Arizona geological survey. A publication shall not 9 include any confidential information pursuant to section 27-522. The 10 state geologist shall consult with the operator and obtain the approval of 11 the scope of work for the publication before the state geologist releases 12 any proposed publication pertaining to a project regulated by the oil and 13 gas conservation commission. 14

B. The publications of the Arizona geological survey shall be 15 printed as the university of Arizona determines and distributed or sold as 16 the interests of this state or science demand. Money obtained by the sale 17 of publications shall be deposited in the geological survey fund 18 established by section 27-107 for printing further publications. 19

C. All materials collected, after having served the purpose of the 20 Arizona geological survey, shall be made available to the universities, 21 community colleges and high schools of this state. 22


27-110. Trade secrets; confidentiality; definition 25 A. The Arizona board of regents GOVERNING BOARD OF THE UNIVERSITY 26

OF ARIZONA may receive and accept geologic, engineering and feasibility 27 studies and other economic and technical information that is considered a 28 trade secret in the mineral industry. 29

B. Trade secret information obtained under this section is 30 confidential and not subject to public disclosure. 31

C. For the purposes of this section, "trade secret" means 32 information to which all of the following apply: 33

1. A person has taken reasonable measures to protect the 34 information from disclosure and the person intends to continue to take 35 those measures. 36

2. The information is not and has not been reasonably obtainable by 37 legitimate means by other persons without the person's consent, other than 38 by governmental entities and other than in discovery based on a showing of 39 special need in a judicial or quasi-judicial proceeding. 40

3. A statute does not specifically require disclosure of the 41 information to the public. 42

4. The person has satisfactorily shown that disclosing the 43 information is likely to cause substantial harm to the person's 44 competitive position. 45

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28-2412. Collegiate special plates; definition 3 A. The department shall issue collegiate special plates that 4

identify each university that is described in section 15-1601 or each 5 community college district. The collegiate special plates shall have the 6 same color and design as the collegiate license plates issued on or before 7 December 31, 1992, except that on the request of a university as described 8 in section 15-1601 or a community college district, the department may 9 revise the color and design of the plates as appropriate for the 10 university or community college district. 11

B. Of the twenty-five dollar fee required by section 28-2402 for 12 original special plates and for renewal of special plates, eight dollars 13 is a special plate administration fee and seventeen dollars is a 14 collegiate plate annual donation. 15

C. The department shall deposit, pursuant to sections 35-146 and 16 35-147, all special plate administration fees in the state highway fund 17 established by section 28-6991 and shall transmit the collegiate plate 18 annual donations as follows: 19

1. To the board of regents GOVERNING BOARD OF THE APPROPRIATE 20 UNIVERSITY for placement in the appropriate university collegiate special 21 plate fund. 22

2. To the community college district collegiate special plate fund 23 established by PURSUANT TO section 15-1447. 24

D. The request for collegiate special plates may be combined with a 25 request for personalized special plates. This request shall be on a form 26 prescribed by the director and is subject to the fees required for the 27 personalized special plates in addition to the fees required for 28 collegiate special plates. 29

E. For the purposes of this section, "community college district" 30 means a community college district that includes all of the following: 31

1. Is established pursuant to sections 15-1402 and 15-1403 or 32 section 15-1402.01. 33

2. Is a political subdivision of this state. 34 3. Has a full-time equivalent student enrollment pursuant to 35

section 15-1466.01 of more than fifty thousand students. 36 Sec. 125. Section 28-9102, Arizona Revised Statutes, is amended to 37

read: 38 28-9102. Formation 39 A. An intergovernmental public transportation authority may be 40

organized as provided by this section in any county with a population of 41 two hundred thousand persons or less. 42

B. The governing body of one or more incorporated cities or towns 43 may petition the county board of supervisors to establish an authority 44

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consisting of the area within the incorporated boundary of the 1 municipality or municipalities. 2

C. If the organizing municipalities are not contiguous, the 3 unincorporated areas between the organizing municipalities must also be 4 included in the authority with the approval of the county board of 5 supervisors. The board of supervisors shall establish the boundaries of 6 the unincorporated area to be included in the authority. 7

D. Incorporated cities and towns in different counties, each of 8 which meet the population limit prescribed by subsection A OF THIS 9 SECTION, may petition their respective county boards of supervisors to 10 establish a joint authority consisting of the combined areas within their 11 respective municipal boundaries and including any intervening 12 unincorporated areas in the counties. 13

E. The board of supervisors shall hold at least one hearing on the 14 petition in one of the petitioning municipalities to determine public 15 support for the authority and whether establishing the authority would be 16 in the public interest. In the case of petitioning municipalities in 17 different counties, the board of supervisors of each county shall hold 18 separate hearings and each board shall make its determination separately. 19

F. If the board of supervisors determines that establishing the 20 authority would serve the public convenience, necessity, safety or 21 welfare, the board of supervisors shall establish the authority by a 22 resolution that includes a description of the boundaries of the authority. 23 In the case of an authority in different counties, the county boards of 24 supervisors shall establish the authority by an intergovernmental 25 agreement. 26

G. If an authority is established under this chapter, any PUBLIC 27 university that is under the jurisdiction of the Arizona board of regents 28 and IN THIS STATE that is located in a municipality in the authority, any 29 community college district that is located in a municipality in the 30 authority, or any Indian nation that has a boundary within a county in 31 which an authority is established, may become a member of the authority 32 by intergovernmental agreement. 33


34-105. Guaranteed energy cost savings contracts; definitions 36 A. An agent may contract for the procurement of a guaranteed energy 37

cost savings contract with a qualified provider. 38 B. An agent may enter into a guaranteed energy cost savings 39

contract with a qualified provider if the agent determines that the amount 40 the agent would spend on the energy cost savings measures recommended in 41 the proposal would not exceed the amount to be saved in energy costs over 42 the expected life, according to the manufacturer's equipment standards, of 43 the energy cost savings measures implemented, the term of the financial 44 agreement or twenty-five years, whichever is shortest, after the date that 45

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installation or implementation is complete, if the recommendations in the 1 proposal are followed. An agent shall retain the cost savings achieved by 2 a guaranteed energy cost saving SAVINGS contract, and these cost savings 3 may be used to pay for the contract and project implementation. 4

C. An agent shall use objective criteria in selecting the qualified 5 provider, including the cost of the contract, the energy savings, the net 6 projected energy savings, the quality of the technical approach, the 7 quality of the project management plan, the financial solvency of the 8 qualified provider and the experience of the qualified provider with 9 projects of similar size and scope. An agent shall state each criterion 10 with its relevant order of importance in the request for proposal. 11

D. In selecting a contractor to perform any construction work 12 related to performing the guaranteed energy cost savings contract, the 13 qualified provider may develop and use a prequalification process for 14 contractors. These prequalifications may require the contractor to 15 demonstrate that the contractor is adequately bonded to perform the work 16 and that the contractor has not failed to perform on a prior job. 17

E. The selected qualified provider shall perform a study in order 18 to establish the exact scope of the guaranteed energy cost savings 19 contract, the fixed cost savings guarantee amount and the methodology for 20 determining actual savings. The agent shall review and approve this 21 report before the actual installation of any equipment. The qualified 22 provider shall transmit a copy of the approved study to the governor's 23 office of energy policy. 24

F. The guaranteed energy cost savings contract shall require that 25 in determining whether the projected energy savings calculations have been 26 met, the energy costs savings shall be computed by comparing the energy 27 baseline before installation or implementation of the energy cost savings 28 measures with the energy consumed after installation or implementation of 29 the energy cost savings measures. The qualified provider and the agent 30 may agree to make modifications to the energy baseline only for any of the 31 following: 32

1. Changes in utility rates. 33 2. Changes in the number of days in the utility billing cycle. 34 3. Changes in the square footage of the facility. 35 4. Changes in the operational schedule of the facility. 36 5. Changes in facility temperature. 37 6. Significant changes in the weather. 38 7. Significant changes in the amount of equipment or lighting 39

utilized in the facility. 40 8. Significant changes in the nature or intensity of energy use 41

such as the change of classroom space to laboratory space. 42 G. The information to develop the energy baseline shall be derived 43

from historical energy costs or actual energy measurements or shall be 44 calculated from energy measurements at the facility where energy cost 45

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savings measures are to be installed or implemented. The baseline shall 1 be established before the installation or implementation of energy cost 2 savings measures. 3

H. When submitting a proposal for the installation of equipment, 4 the qualified provider shall include information on the projected energy 5 savings associated with each proposed energy cost savings measure. 6

I. An agent, or two or more agents, may enter into a financing 7 agreement with a qualified provider or the financial institution, trustee 8 or paying agent for the purchase and installation or implementation of 9 energy cost savings measures. The guaranteed energy cost savings contract 10 may provide for payments over a period of not more than the expected life, 11 according to the manufacturer's equipment standards, of the energy cost 12 savings measures implemented, the term of the financial agreement or 13 twenty-five years, whichever is shortest. The contract shall provide that 14 all payments, except obligations on termination of the contract before its 15 expiration, shall be made pursuant to the terms of the agreement. If an 16 agent purchases the energy cost savings measure, the qualified provider 17 shall guarantee that the energy cost savings meet or exceed the agent's 18 total cost of purchase. 19

J. The guaranteed energy cost savings contract shall include a 20 written guarantee of the qualified provider that the energy cost savings 21 will meet or exceed the costs of the energy cost savings measures over the 22 expected life, according to the manufacturer's equipment standards, of the 23 energy cost savings measures implemented, the term of the financial 24 agreement or twenty-five years, whichever is shortest, except as provided 25 in subsection I of this section. The qualified provider shall: 26

1. For the term of the contract, prepare a measurement and 27 verification report on an annual basis in addition to an annual 28 reconciliation of savings. 29

2. Reimburse the agent for any shortfall of guaranteed energy cost 30 savings on an annual basis. 31

3. Use the international performance and measurement and 32 verification protocol standards or the federal energy management program 33 standards to validate the savings guarantee. 34

K. The agent may obtain any required financing as part of the 35 original competitive sealed proposal process from the qualified provider 36 or a third-party financing institution. 37

L. A qualified provider that is awarded the contract shall give a 38 sufficient bond to the agent for its faithful performance of the equipment 39 installment. 40

M. This section does not apply to the construction of new 41 buildings. 42

N. An agent may use a simplified energy performance contract for 43 projects less than five hundred thousand dollars. Simplified energy 44 performance contracts are not required to include an energy savings 45

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guarantee and shall comply with all requirements in this section except 1 for the requirements that are specifically related to the energy savings 2 guarantee and the measurement and verification of the guaranteed savings. 3

O. For the purposes of this section: 4 1. "Agent" has the same meaning prescribed in section 34-101 but 5

also includes a community college district organized under title 15, 6 chapter 12, the department of administration and the Arizona board of 7 regents GOVERNING BOARD OF EACH UNIVERSITY. 8

2. "Construction" means the process of building, altering, 9 repairing, improving or demolishing any structure or building, or other 10 public improvements of any kind to any real property. Construction does 11 not include the routine operation, routine repair or routine maintenance 12 of existing structures, buildings or real property. 13

3. "Energy baseline" means a calculation of the amount of energy 14 used in an existing facility before the installation or implementation of 15 the energy cost savings measures. 16

4. "Energy cost savings measure" means a training program or 17 facility alteration designed to reduce energy consumption and may include 18 one or more of the following, and any related meters or other measuring 19 devices: 20

(a) Insulating the building structure or systems in the building. 21 (b) Storm windows or doors, caulking or weather stripping, 22

multiglazed windows or door systems, additional glazing, reductions in 23 glass area, or other window and door system modifications that reduce 24 energy consumption. 25

(c) Automated or computerized energy control systems. 26 (d) Heating, ventilating or air conditioning system modifications 27

or replacements, including ground source heat pumps. 28 (e) Replacing or modifying lighting fixtures to increase the energy 29

efficiency of the lighting system without increasing the overall 30 illumination of a facility unless an increase in illumination is necessary 31 to conform to the applicable state or local building code for the lighting 32 system after the proposed modifications are made. 33

(f) Indoor air quality improvements to increase air quality that 34 conform to the applicable state or local building code requirements. 35

(g) Energy recovery systems. 36 (h) Installing a new or retrofitting an existing day lighting 37

system. 38 (i) Procurement of low-cost utility supplies of all types, 39

including electricity, natural gas, propane and water. 40 (j) Devices that reduce water consumption and water costs or that 41

reduce sewer charges. 42 (k) Rainwater harvesting systems. 43 (l) Combined heat and power systems. 44

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(m) Renewable and alternative energy projects and renewable energy 1 power service agreements. 2

(n) Self-generation systems. 3 (o) Any additional building systems and infrastructure that produce 4

energy, or that provide utility cost savings not specifically mentioned in 5 this paragraph, if the improvements meet the life cycle LIFE-CYCLE cost 6 requirement and enhance building system performance or occupant comfort 7 and safety. 8

(p) Geothermal. 9 5. "Life cycle LIFE-CYCLE cost" means the sum of the present values 10

of investment costs, capital costs, installation costs, energy costs, 11 operating costs, maintenance costs and disposal costs and utility rebates 12 over the life of the project, product or measure as provided by federal 13 life cycle LIFE-CYCLE cost rules, regulations and criteria contained in 14 the United States department of energy federal energy management program 15 "guidance on life-cycle cost analysis" required by executive order 13423, 16 January 2007. 17

6. "Qualified provider" means a person or a business that is 18 experienced in designing, implementing or installing energy cost savings 19 measures, that has a record of established projects or measures of similar 20 size and scope, that has demonstrated technical, operational, financial 21 and managerial capabilities to design and operate cost savings measures 22 and projects and that has the financial ability to satisfy guarantees for 23 energy cost savings. 24


34-451. Energy conservation standards for public buildings 27 A. The governor's energy office in consultation with persons 28

responsible for building systems shall adopt and publish energy 29 conservation standards for construction of all new capital projects as 30 defined in section 41-790, including buildings designed and constructed by 31 school districts, community college districts and universities. These 32 standards shall be consistent with the recommended energy conservation 33 standards of the American society of heating, refrigerating and air 34 conditioning engineers and the international energy conservation code. 35

B. The standards shall be adopted to achieve energy conservation 36 and shall allow for design flexibility. 37

C. The following state agencies shall reduce energy use in public 38 buildings that they administer by ten per cent PERCENT per square foot of 39 floor area on or before July 1, 2008 and by fifteen per cent PERCENT per 40 square foot of floor area on or before July 1, 2011, using July 1, 2001 41 through June 30, 2002 as the baseline year: 42

1. The department of administration for its building systems. 43 2. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY 44

for its building systems. 45

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3. The department of transportation for its building systems. 1 D. The governor's energy office shall provide technical assistance 2

to the state agencies prescribed in subsection C of this section. On or 3 before July 1 of each year, the energy office shall measure compliance 4 with subsection C of this section, compile the results of that monitoring 5 and report to the speaker of the house of representatives and the 6 president of the senate as to the progress of attaining the goals 7 prescribed in subsection C of this section. The energy office shall 8 include in its report an explanation of the reasons for any failure to 9 achieve energy reductions in specific building systems as prescribed in 10 subsection C of this section. 11

E. All state agencies shall procure energy efficient products that 12 are certified by the United States department of energy or the United 13 States environmental protection agency as energy star or that are 14 certified under the federal energy management program in all categories 15 that are available unless the products are shown not to be cost-effective 16 on a life cycle LIFE-CYCLE cost basis. 17


34-461. Applicability of local codes; exceptions; definition 20 A. Public buildings shall be constructed in compliance with the 21

state fire code or, if at the request of a school district or charter 22 school, the state fire marshal may authorize through an intergovernmental 23 agreement with a city, town, county or fire district in which the school 24 district or charter school building is located to impose the fire code 25 adopted by the city, town, county or fire district on school district or 26 charter school buildings. An intergovernmental agreement entered into 27 pursuant to this subsection may allow the city, town, county or fire 28 district to conduct regularly scheduled fire safety inspections. Public 29 buildings shall be constructed in compliance with applicable building, 30 plumbing, electrical, fire and mechanical codes adopted by the city, town, 31 county or fire district in which the building is located. The owner of 32 the public building is subject to the same fees required of other 33 persons. Public buildings are subject to inspection during construction 34 pursuant to these codes to determine compliance. 35

B. If a public building is built in an area that has not adopted 36 local codes, the building shall be designed or constructed according to 37 the state fire code adopted by the state fire marshal and the building, 38 plumbing, electrical and mechanical codes that apply in the largest city 39 in the county in which the building is located. 40

C. Public buildings are subject to those codes that apply and are 41 in effect when the building is designed or constructed and to the 42 currently adopted codes when a building is found to be structurally 43 unsafe, without adequate egress or a fire hazard or is otherwise dangerous 44 to human life. 45

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D. Subsections A and B of this section do not apply to state owned 1 buildings except for the application of the fire code in effect where a 2 state owned building is located. In complying with the applicable codes 3 pursuant to subsections A and B of this section, the permitting process 4 and fees do not apply to a public school district owned building in a 5 county with a population of more than seven hundred fifty thousand persons 6 but less than two million persons except for the application of the design 7 and permitting process and any fee required of a fire code in effect where 8 such a public school district owned building is located. State department 9 of corrections facilities are exempt from the application of the local 10 fire code in the absence of an intergovernmental agreement between the 11 state department of corrections and the governmental entity responsible 12 for enforcing any local fire code. 13

E. Notwithstanding subsection A of this section, cities prescribed 14 in section 37-1383, subsection A, paragraph 5 do not have authority that 15 supersedes and are not exempt from the state fire marshal's established 16 fire code in state or county owned buildings wherever located throughout 17 the state. 18

F. Notwithstanding subsection A of this section, buildings and 19 properties owned by the Arizona board of regents GOVERNING BOARD OF A 20 UNIVERSITY or a THE university under its jurisdiction are exempt from any 21 city, town, county or fire district fire code in the absence of an 22 intergovernmental agreement between the Arizona board of regents GOVERNING 23 BOARD or the university and the city, town, county or fire district. 24

G. If the state fire marshal enters into an intergovernmental 25 agreement pursuant to subsection A of this section, a school district or 26 charter school may choose to have the plan review, permitting and any 27 related inspections or any regularly scheduled fire safety inspections 28 completed by either the state fire marshal or the city, town, county or 29 fire district. If the school district or charter school chooses to have 30 the city, town, county or fire district perform the plan review, 31 permitting and any related inspections or the regularly scheduled fire 32 safety inspections, the city, town, county or fire district shall inform 33 the school district or charter school of any fees associated with the 34 inspection process. 35

H. This section does not preclude a public school district in a 36 county with a population of more than seven hundred fifty thousand persons 37 but less than two million persons from submitting, at its discretion, to 38 the building design or construction permitting process of the appropriate 39 local government entity for any given project. A public school district 40 making such a decision is subject to subsections A and B of this section 41 and the permit and code compliance requirements of the local government 42 entity, including inspections and fee payments that may be required, for 43 the duration of the project that the district submitted to the local 44 government entity. 45

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I. Public school districts in a county with a population of more 1 than seven hundred fifty thousand persons but less than two million 2 persons shall adopt policies to provide requirements to be followed by 3 licensed or registered contractors or employees in order to ensure that 4 construction projects are in compliance with the applicable codes pursuant 5 to subsections A and B of this section and that records required by code 6 or law for a given project are completed and maintained by the applicable 7 district. At a minimum, these policies shall: 8

1. Include the method by which the public school district will 9 notify the appropriate local government unit or units, and retain a record 10 of the notification, that the public school district will not be using the 11 permitting process for a given project pursuant to subsection D of this 12 section. 13

2. Prohibit a construction contractor from serving as a district's 14 inspector and code compliance official on the same project for which the 15 contractor is providing construction services. 16

3. Require the architect of record for a given district project to 17 be responsible for signing the certificate of occupancy when such a 18 certificate is required for that particular project. 19

J. For the purposes of this section, "public building" means a 20 building or appurtenance to a building that is built in whole or in part 21 with public monies. 22


35-101. Definitions 25 In this chapter, unless the context otherwise requires: 26 1. "Allotment" means the allocation of an appropriation or other 27

fund source over a full fiscal year within a budget program or expenditure 28 class. 29

2. "Annual budget unit" means the following agencies: 30 (a) The department of education. 31 (b) The Arizona board of regents GOVERNING BOARD OF EACH 32

UNIVERSITY. 33 (c) Arizona state university. 34 (d) The university of Arizona. 35 (e) Northern Arizona university. 36 (f) The school facilities board. 37 (g) The department of economic security. 38 (h) The state department of corrections. 39 (i) The department of juvenile corrections. 40 (j) The Arizona health care cost containment system. 41 (k) The department of health services. 42

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(l) The department of administration. 1 (m) The department of transportation. 2 (n) The judiciary, including the supreme court, the court of 3

appeals and the superior court. 4 (o) The department of child safety. 5 3. "Authorized agent" means a commercial enterprise that is 6

contracted to process transactions on behalf of a state agency. 7 4. "Biennial budget unit" means any department, commission, board, 8

institution or other agency of the state organization receiving, expending 9 or disbursing state funds or incurring obligations against the state that 10 is not an annual budget unit. 11

5. "Budget estimates" means statements with accompanying 12 explanations, as provided by this chapter, in which a budget unit states 13 its financial requirements and requests appropriations. 14

6. "Budget program" means functions and activities of a budget unit 15 or within a budget unit that are preplanned to fulfill a distinct mission. 16

7. "Budget unit" means any department, commission, board, 17 institution or other agency of the state organization receiving, expending 18 or disbursing state funds or incurring obligations against the state. 19 Budget unit includes the annual budget units and biennial budget units. 20

8. "Cardholder" means any person: 21 (a) Named on the face of a credit card to whom or for whose benefit 22

the credit card is issued by an issuer. 23 (b) In possession of a credit card with the consent of the person 24

to whom the credit card was issued. 25 9. "Claim" means a demand against the state for payment for either: 26 (a) Goods delivered or, in the case of highway construction, goods 27

or facilities to be delivered by the federal government. 28 (b) Services performed. 29 10. "Convenience fee" means an additional fee that is imposed by an 30

authorized agent on a web-based or voice response portal transaction for 31 the acceptance of a credit card that would not be charged if the same 32 transaction were completed by an alternate method of payment. 33

11. "Credit card" means: 34 (a) Any instrument or device, whether known as a credit card, 35

charge card, credit plate, courtesy card or identification card or by any 36 other name, that is issued with or without a fee by an issuer for the use 37 of the cardholder in obtaining money, goods, services or anything else of 38 value, either on credit or in possession or in consideration of an 39 undertaking or guaranty by the issuer of the payment of a check drawn by 40 the cardholder, on a promise to pay in part or in full at a future time, 41 whether or not all or any part of the indebtedness represented by this 42 promise to make deferred payment is secured or unsecured. 43

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(b) Any debit card, electronic benefit transfer card or other 1 access instrument or device, other than a check that is signed by the 2 holder or other authorized signatory on the deposit account, that draws 3 monies from a deposit account in order to obtain money, goods, services or 4 anything else of value. 5

(c) Any stored value card, smart card or other instrument or device 6 that enables a person to obtain goods, services or anything else of value 7 through the use of value stored on the instrument or device. 8

(d) The number assigned to an instrument or device described in 9 subdivision (a), (b) or (c) of this paragraph even if the physical 10 instrument or device is not used or presented. 11

12. "Discount fee" means the fee that is calculated and charged by 12 the credit card issuer or a financial institution pursuant to an agreement 13 for the processing of any credit card transaction. 14

13. "Encumbrance" means an obligation in the form of any purchase 15 order, contract or other commitment that is chargeable to an appropriation 16 or any other authorized fund source and for which a part of the fund 17 source is reserved. It ceases to be an encumbrance when paid or canceled. 18

14. "Expenditure class" means one of the kinds of expenditure 19 denoting a class of services or commodities purchased or properties 20 acquired as specified in the classification of expenditures prescribed by 21 the director of the department of administration for use in expenditure 22 accounting, in making budget estimates and in the budget reports and 23 budgets. 24

15. "Issuer" means any business organization, state agency or 25 financial institution, or its duly authorized agent, that issues a credit 26 card. 27

16. "Prepayment" means the payment of a claim before receiving the 28 goods or services. 29

17. "Processing fee" means a fee that is charged by an entity other 30 than a credit card issuer or the processing financial institution to 31 process a credit card transaction. 32

18. "Purchase order" means a document that is signed by the 33 appropriate agency authorized signatory, that requests a vendor to deliver 34 described goods or services at a specific price and that on delivery and 35 acceptance of the goods or services by this state becomes an obligation of 36 this state. 37

19. "Service fee or surcharge" means a fee, whether fixed or 38 variable, that is in addition to the transaction amount, that is charged 39 by a state agency when the state agency accepts a credit card for payment 40 and that is necessary for the state agency to process the payment. 41

20. "Transaction amount" means the total amount due to the state 42 for any goods, service or license or anything else of value. 43

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35-116. Supervisory powers of governor relating to budget 3 report; exceptions 4

A. Prior to submission of the budget report to the legislature, the 5 governor shall examine the statements and estimates and shall make or 6 cause to be made further investigations, with hearings before the 7 governor, or the governor's designee, and shall make changes or revisions 8 in appropriations requested that the governor deems advisable. 9

B. The legislature shall not be subject to the control of the 10 governor in the preparation and submission of budgets, but shall submit 11 its requests for appropriations for the two ensuing fiscal years to the 12 governor for review by the legislature. 13

C. The judiciary shall not be subject to the control of the 14 governor in the preparation and submission of budgets, but shall submit 15 its requests for appropriations for the ensuing fiscal year to the 16 governor for review by the legislature. 17

D. The appropriation requests of the Arizona board of regents 18 GOVERNING BOARD OF EACH UNIVERSITY and the department of transportation 19 for the ensuing fiscal year may be revised by the governor, but the 20 governor shall also submit the appropriation request prepared and 21 submitted by the budget unit in its original form to the legislature for 22 review. 23


35-120. Additional powers of governor 26 A. In aid of any powers vested in the governor under this article, 27

the governor: 28 1. Shall have access to offices of all budget units. 29 2. May examine all books, papers, records and documents in the 30

office of any budget unit. 31 3. May require any state officer or head of any budget unit to 32

furnish such data, information or statements as may be necessary. 33 B. The provisions of This section shall apply APPLIES to the board 34

of regents GOVERNING BOARDS OF THE UNIVERSITIES and the institutions under 35 the jurisdiction of the board of regents PUBLIC UNIVERSITIES IN THIS 36 STATE, only as they relate to the appropriations requested. 37

C. The power of the governor as prescribed by the terms of this 38 section, to investigate budget units, including the board of regents 39 GOVERNING BOARD OF A UNIVERSITY, may be delegated to the GOVERNOR'S office 40 of strategic planning and budgeting or the department of administration. 41 Such power may be used and shall extend to funds appropriated by the 42 legislature in its relation to budget preparation for the current and 43 preceding fiscal year. The powers granted by the terms of this section 44 may be exercised by the governor during any period of the fiscal year. 45

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35-148. Payment for interagency services as credit to account 3 of agency; transfer of miscellaneous state monies 4 to general fund; exceptions 5

A. Interagency service agreements entered into between budget units 6 may provide for reimbursement for services performed or advancement of 7 funds for services to be performed. In either instance, monies received 8 by the budget unit performing the services shall be credited to its 9 appropriation account for its use in performing the services. If funds 10 are advanced, the agency performing the services shall make an accounting 11 of expenditures and return any advances not used to the appropriation 12 account of the advancing agency. 13

B. Except as provided in subsection A of this section, when money 14 belonging to the state comes into the possession of a state officer, by 15 recovery at law or otherwise, and no provision of law exists for the 16 disposition of such money, it shall be deposited, pursuant to sections 17 35-146 and 35-147, in the state general fund. 18

C. The provisions of This section shall DOES not apply to money 19 realized from the sale of personal property or from the sale of real 20 property or improvements thereon by the Arizona board of regents GOVERNING 21 BOARD OF A UNIVERSITY, or by educational institutions under the control of 22 the Arizona board of regents GOVERNING BOARD, the department of child 23 safety or the department of economic security. 24


35-190. Incurring obligations after close of fiscal year; 27 lapsing appropriations; exceptions 28

A. Except as provided in section 35-191, no officer or other agency 29 of the state shall, after the close of any fiscal year, incur or order or 30 approve the incurring of any obligation or expenditure under any 31 appropriation made by the legislature for such fiscal year, and no 32 expenditure shall be made from or be charged to any appropriation made by 33 the legislature for any fiscal year which THAT has expired at the time the 34 obligation for such AN expenditure was incurred. 35

B. The department of administration may draw warrants against the 36 available balances of appropriations made for a fiscal year for a period 37 of one month after the close of such fiscal year: 38

1. For payment of obligations incurred during the fiscal year for 39 which such appropriations were made. 40

2. In fulfillment of contracts properly made during such year as 41 determined by the director of the department of administration. 42

C. After expiration of such A period of one month from the 43 beginning of each fiscal year, all balances of appropriations for the 44

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prior fiscal year shall lapse and no further payments shall be made on any 1 claim on account of expenditures of such prior fiscal year. 2

D. Appropriations for construction or other permanent improvements 3 shall not lapse until the purpose for which the appropriation was made has 4 been accomplished or abandoned, unless such AN appropriation is available 5 during the entire fiscal year without an expenditure therefrom or 6 encumbrance thereon. 7

E. Nothing in this section shall be construed to require reversion 8 to the STATE general fund of any balance derived wholly or partly from 9 federal grants, earnings or other sources, and remaining in any special 10 revenue, endowment, interest, redemption or suspense agency fund at the 11 close of the fiscal year unless expressly so provided by law, or to 12 require reversion to the STATE general fund of any balance of fiscal year 13 appropriations made for state institutions under the control of the 14 Arizona board of regents GOVERNING BOARD OF A UNIVERSITY. 15


35-515. Rebate reporting; state agencies 18 A. The state treasurer shall report to the United States government 19

any rebate resulting from bonds issued by any state agency. The state 20 treasurer may contract with professional consultants deemed necessary by 21 the state treasurer in order to comply with the provisions of this 22 section. The state treasurer may charge any costs associated with this 23 section proportionally among the state agencies for which reports are 24 made. Rebate reporting by the state treasurer does not relieve the state 25 agency from the responsibility for any payment of any rebate that may 26 become due. 27

B. State agencies shall deliver to the state treasurer in a timely 28 manner all information required by the state treasurer to comply with 29 rebate reporting requirements. Such information shall include official 30 statements, certificates of rebate, certificates of yield, investment 31 accounting documentation, amortization schedules and contract documents. 32

C. The state treasurer shall make rebate payments on behalf of the 33 agency as required. The rebate payment and any charges incurred pursuant 34 to subsection A OF THIS SECTION shall be transferred from the account of 35 the state agency to the state treasurer for such payments. 36

D. This section shall apply APPLIES to the Arizona board of regents 37 GOVERNING BOARD OF A UNIVERSITY and the institutions UNIVERSITY under the 38 jurisdiction of the THAT board upon ON the approval of the board of 39 regents THAT GOVERNING BOARD. 40


35-701. Definitions 43 In this chapter, unless the context otherwise requires: 44

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1. "Corporation" means any corporation organized as an authority as 1 provided in this chapter. 2

2. "Governing body" means: 3 (a) The board or body in which the general legislative powers of 4

the municipality or the county are vested. 5 (b) The Arizona board of regents GOVERNING BOARD OF A UNIVERSITY 6

with respect to a corporation formed with the permission of the Arizona 7 board of regents THAT GOVERNING BOARD. 8

(c) The Arizona finance authority board of directors established by 9 title 41, chapter 53, article 2. 10

3. "Income" means gross earnings from wages, salary, commissions, 11 bonuses or tips from all jobs, net earnings from such person's or family's 12 own nonfarm business, professional practice or partnership, and net 13 earnings from such person's or family's own farm. Income includes income, 14 other than earnings, that consists of amounts received from social 15 security or railroad retirement, interest, dividends, veterans payments, 16 pensions and other regular payments, public assistance or welfare 17 payments, including aid for dependent children, old age assistance and aid 18 to the blind or persons with total disability, but excluding separate 19 payments for hospital or other medical care. 20

4. "Manufactured house" means a structure that is manufactured in a 21 factory after June 15, 1976, that is delivered to a homesite in more than 22 one section and that is placed on a permanent foundation. The dimensions 23 of the completed house shall not be less than twenty feet by forty feet, 24 the roof must be sloping, the siding and roofing must be the same as those 25 found in site-built houses and the house must be eligible for thirty year 26 THIRTY-YEAR real estate mortgage financing. 27

5. "Municipality" or "county" means the Arizona finance authority, 28 the Arizona board of regents GOVERNING BOARD OF A UNIVERSITY or any 29 incorporated city or town, including charter cities, or any county in this 30 state in which a corporation may be organized and in which it is 31 contemplated the corporation will function. 32

6. "Persons of low and moderate income" means, for the purposes of 33 financing owner-occupied single family dwelling units in areas that the 34 municipality has found, pursuant to section 36-1479, to be slum or 35 blighted areas, as defined in section 36-1471, persons and families whose 36 income does not exceed two and one-half times the median family income of 37 this state. In all other areas it means persons and families whose income 38 does not exceed one and one-half times the median family income of this 39 state. 40

7. "Project" means any land, any building or any other improvement 41 and all real and personal properties, including machinery and equipment 42 whether or not now in existence or under construction and whether located 43 within or without this state or the municipality or county approving the 44 formation of the corporation, that are suitable for any of the following: 45

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(a) With respect to a corporation formed with the permission of the 1 Arizona finance authority, a municipality or a county other than the 2 Arizona board of regents GOVERNING BOARD OF A UNIVERSITY: 3

(i) Any enterprise for the manufacturing, processing or assembling 4 of any agricultural or manufactured products. 5

(ii) Any commercial enterprise for the storing, warehousing, 6 distributing or selling of products of agriculture, mining or industry, or 7 of processes related thereto, including research and development. 8

(iii) A health care institution as defined in section 36-401. 9 (iv) Residential real property for dwelling units located within 10

the municipality or county approving the formation of the corporation and, 11 in the case of a county, whether or not also within a municipality that is 12 within the county. 13

(v) Repairing or rehabilitating single family dwelling units or 14 constructing or repairing residential fences and walls. 15

(vi) Convention or trade show facilities. 16 (vii) Airports, docks, wharves, mass commuting facilities, parking 17

facilities or storage or training facilities directly related to any of 18 the facilities as provided in this item. 19

(viii) Sewage or solid waste disposal facilities or facilities for 20 the furnishing of electric energy, gas or water. 21

(ix) Industrial park facilities. 22 (x) Air or water pollution control facilities. 23 (xi) Any educational institution that is operated by a nonprofit 24

educational organization that is exempt from taxation under section 25 501(c)(3) of the United States internal revenue code and that is not 26 otherwise funded by state monies, any educational institution or 27 organization that is established under title 15, chapter 1, article 8 and 28 that is owned by a nonprofit organization, any private nonsectarian school 29 or any private nonsectarian organization established for the purpose of 30 funding a joint technical education school district. 31

(xii) Research and development facilities. 32 (xiii) Any commercial enterprises, including facilities for 33

manufacturing, office, recreational, hotel, motel and service uses. 34 (xiv) A child welfare agency, as defined in section 8-501, owned 35

and operated by a nonprofit organization. 36 (xv) A transportation facility constructed or operated pursuant to 37

title 28, chapter 22. 38 (xvi) A museum operated by a nonprofit organization. 39 (xvii) Facilities owned or operated by a nonprofit organization 40

described in section 501(c) of the United States internal revenue code 41 of 1986. 42

(xviii) New or existing correctional facilities within this state. 43 (b) With respect to a corporation formed with the permission of the 44

Arizona board of regents GOVERNING BOARD OF A UNIVERSITY, any facility 45

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consisting of classrooms, lecture halls or conference centers or any 1 facility for research and development or for manufacturing, processing, 2 assembling, marketing, storing and transferring items developed through or 3 connected with research and development or in which the results of such 4 research and development are utilized, but only if the facility is located 5 in an area designated as a research park by the Arizona board of regents 6 GOVERNING BOARD. 7

8. "Property" means any land, improvements thereon, buildings and 8 any improvements thereto, machinery and equipment of any and all kinds 9 necessary to a project and any other personal properties deemed necessary 10 in connection with a project. 11

9. "Research park" means an area of land that has been designated 12 by the Arizona board of regents GOVERNING BOARD OF A UNIVERSITY as a 13 research park for a THAT university and that, at the date of designation, 14 is owned by this state or by the Arizona board of regents UNIVERSITY. 15

10. "Single family dwelling unit" includes any new, used or 16 manufactured house that meets the insuring requirements of the federal 17 housing administration, the United States department of veterans affairs 18 or any other insuring entity of the United States government or any 19 private mortgage insurance or surety company that is approved by the 20 federal home loan mortgage corporation or the federal national mortgage 21 association. 22


35-702. Proceedings to incorporate industrial development 25 authority 26

A. Whenever any number of natural persons, not less than three, 27 each of whom is a qualified elector of the municipality or the county or, 28 in the case of a corporation to be formed with the permission of the 29 Arizona finance authority or the Arizona board of regents GOVERNING BOARD 30 OF A UNIVERSITY, qualified electors of this state, file with any governing 31 body thereof an application in writing seeking permission to apply for the 32 incorporation of an industrial development board of the municipality or 33 county, the governing body shall consider the application. If the 34 governing body by resolution finds and determines that it is wise, 35 expedient, necessary or advisable that the corporation be formed and 36 authorizes the persons making the application to form the corporation, 37 then the persons making the application shall proceed to incorporate as 38 prescribed by this chapter. A corporation may not be formed unless the 39 application first has been filed with the governing body having 40 jurisdiction and the governing body adopts a resolution as provided in 41 this section. Any corporation when formed shall be a political 42 subdivision of this state and have only the governmental powers as are set 43 forth in this chapter or in chapter 6 of this title and the power to enter 44

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into intergovernmental agreements in accordance with title 11, chapter 7, 1 article 3. 2

B. Only one corporation shall be approved by a municipality or 3 county for operation at any time. 4


35-703. Articles of incorporation of industrial development 7 authority 8

In addition to the requirements of title 10, the articles of 9 incorporation shall set forth: 10

1. The names and residences of the applicants, together with a 11 recital that each of them is a qualified elector of the municipality or 12 the county or, in the case of a corporation to be formed with the 13 permission of the Arizona finance authority or the Arizona board of 14 regents GOVERNING BOARD OF A UNIVERSITY, a qualified elector of this 15 state. 16

2. The name of the corporation, which shall be "the industrial 17 development authority of the ____________ of _____________," (the blank 18 spaces to be filled in with the name of the municipality or the county). 19 In the case of a corporation formed with the permission of the Arizona 20 finance authority, the name shall be the "Arizona industrial development 21 authority". In the case of a corporation formed with the permission of 22 the Arizona board of regents GOVERNING BOARD OF A UNIVERSITY, the name 23 shall be the "Arizona research park authority". 24

3. A recital that permission to organize the authority has been 25 granted by resolution duly adopted by the governing body of the 26 municipality or county and the date of the adoption of such A resolution. 27

4. The location of the principal office of the authority, which 28 shall be in the municipality or county. In the case of a corporation 29 formed with the permission of the Arizona board of regents GOVERNING BOARD 30 OF A UNIVERSITY, the principal office of the corporation shall be the 31 principal office of the Arizona board of regents THAT GOVERNING BOARD. In 32 the case of a corporation formed with the permission of the Arizona 33 finance authority, the Arizona finance authority is the principal office 34 of the corporation. 35


35-705. Board of directors 38 The authority shall have a board of directors in which all powers of 39

the authority shall be vested and that shall consist of any number of 40 directors, not less than three nor more than nine, all of whom shall be 41 duly qualified electors of the municipality or county with respect to 42 which the authority was formed, except that a corporation that is formed 43 by the Arizona finance authority shall be governed pursuant to section 44 41-5353. In the case of a corporation formed with the permission of the 45

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Arizona board of regents GOVERNING BOARD OF A UNIVERSITY, the directors 1 must be qualified electors of this state. In the case of a corporation 2 formed with the permission of the Arizona finance authority, the Arizona 3 finance authority board shall serve as the board of the industrial 4 development authority. The directors shall serve without compensation, 5 except that the directors shall be reimbursed for their actual expenses 6 incurred in the performance of their duties in the same manner as is 7 provided for other state officers. A director shall not be an officer or 8 employee of the authorizing municipality or county. All directors shall 9 declare any conflict of interest as provided in title 38, chapter 3, 10 article 8. The directors shall be elected by the governing body of the 11 authorizing municipality or county, and they shall be so elected that they 12 shall hold office for overlapping terms. At the time of the election of 13 the first board of directors, the governing body of the municipality or 14 the county shall divide the directors into three groups containing as 15 nearly equal whole numbers as possible. The first term of the directors 16 included in the first group shall be two years, the first term of the 17 directors included in the second group shall be four years, the first term 18 of the directors included in the third group shall be six years, and 19 thereafter the terms of all directors shall be six years. The governing 20 body may remove a director at any time, with or without cause. 21


35-722. Approval by elected official if required by federal 24 law 25

The governor or the attorney general, or the state treasurer if 26 designated by the governor, may approve the issuance of any bonds issued 27 by a corporation formed with the permission of the Arizona finance 28 authority or the Arizona board of regents GOVERNING BOARD OF A UNIVERSITY 29 for purposes of complying with federal laws requiring approval by an 30 applicable elected representative. 31


35-771. Definitions 34 In this article, unless the context otherwise requires: 35 1. "Educational institution" means a PUBLIC university under the 36

jurisdiction of the Arizona board of regents IN THIS STATE, a community 37 college in this state, an accredited private postsecondary institution 38 eligible under title IV of the higher education act of 1965 licensed by 39 this state and any other accredited institution eligible under title IV of 40 the higher education act of 1965 offering postsecondary education or 41 courses, whether located within or outside of the boundaries of this 42 state, that awards any eligible degree. 43

2. "Eligible degree" means any postsecondary degree or program. 44

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3. "Eligible lender" means an entity affiliated or contracting with 1 a corporation or a qualified educational institution that may make student 2 loans to eligible students or to the parents of eligible students or a 3 nonprofit entity that is exempt from taxation under section 501(c)(3) of 4 the internal revenue code and that makes student loans. 5

4. "Eligible student" means any student attending any qualified 6 educational institution and any resident of this state attending any 7 educational institution. 8

5. "Parent" means a student's mother, father, adoptive parent, 9 grandparent or guardian or any person with the duty and authority to make 10 important decisions in matters having a permanent effect on the life and 11 development of a THE student and to be concerned about the student's 12 general welfare. 13

6. "Qualified educational institution" means an educational 14 institution, as defined in paragraph 1 of this section, with a campus and 15 facilities located in this state that offers one or more eligible degrees. 16

7. "State program representative" means the state treasurer or the 17 state treasurer's designee. 18

8. "Student loan" means a loan to or for the benefit of an eligible 19 student for the purpose of financing all or a part of the eligible 20 student's cost of attending an educational institution in pursuit of an 21 eligible degree or refinancing any such loan previously made. 22


36-2102. Medical affiliation; contract for services; use of 25 monies; limitation 26

A. The director may contract with any Arizona hospital, the Arizona 27 board of regents GOVERNING BOARD OF A UNIVERSITY, a licensed dialysis 28 center or A home delivery health service for: 29

1. The operation and administration of limited care dialysis 30 centers. 31

2. Assistance in home dialysis. 32 3. Kidney transplants. 33 B. State funds MONIES appropriated to the department for the 34

continuation of limited care dialysis centers, assistance in home 35 dialysis, kidney transplants and related services shall not be utilized to 36 pay for general medical care services other than kidney transplants, 37 dialysis treatment and necessary laboratory procedures, including 38 prescription drugs, THAT ARE related to such THE treatment or transplant 39 and complications arising in the treatment of dialysis patients. 40


36-2903.01. Additional powers and duties; report; definition 43 A. The director of the Arizona health care cost containment system 44

administration may adopt rules that provide that the system may withhold 45

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or forfeit payments to be made to a noncontracting provider by the system 1 if the noncontracting provider fails to comply with this article, the 2 provider agreement or rules that are adopted pursuant to this article and 3 that relate to the specific services rendered for which a claim for 4 payment is made. 5

B. The director shall: 6 1. Prescribe uniform forms to be used by all contractors. The 7

rules shall require a written and signed application by the applicant or 8 an applicant's authorized representative, or, if the person is incompetent 9 or incapacitated, a family member or a person acting responsibly for the 10 applicant may obtain a signature or a reasonable facsimile and file the 11 application as prescribed by the administration. 12

2. Enter into an interagency agreement with the department to 13 establish a streamlined eligibility process to determine the eligibility 14 of all persons defined pursuant to section 36-2901, paragraph 6, 15 subdivision (a). At the administration's option, the interagency 16 agreement may allow the administration to determine the eligibility of 17 certain persons, including those defined pursuant to section 36-2901, 18 paragraph 6, subdivision (a). 19

3. Enter into an intergovernmental agreement with the department 20 to: 21

(a) Establish an expedited eligibility and enrollment process for 22 all persons who are hospitalized at the time of application. 23

(b) Establish performance measures and incentives for the 24 department. 25

(c) Establish the process for management evaluation reviews that 26 the administration shall perform to evaluate the eligibility determination 27 functions performed by the department. 28

(d) Establish eligibility quality control reviews by the 29 administration. 30

(e) Require the department to adopt rules, consistent with the 31 rules adopted by the administration for a hearing process, that applicants 32 or members may use for appeals of eligibility determinations or 33 redeterminations. 34

(f) Establish the department's responsibility to place sufficient 35 eligibility workers at federally qualified health centers to screen for 36 eligibility and at hospital sites and level one trauma centers to ensure 37 that persons seeking hospital services are screened on a timely basis for 38 eligibility for the system, including a process to ensure that 39 applications for the system can be accepted on a twenty-four hour basis, 40 seven days a week. 41

(g) Withhold payments based on the allowable sanctions for errors 42 in eligibility determinations or redeterminations or failure to meet 43 performance measures required by the intergovernmental agreement. 44

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(h) Recoup from the department all federal fiscal sanctions that 1 result from the department's inaccurate eligibility determinations. The 2 director may offset all or part of a sanction if the department submits a 3 corrective action plan and a strategy to remedy the error. 4

4. By rule establish a procedure and time frames for the intake of 5 grievances and requests for hearings, for the continuation of benefits and 6 services during the appeal process and for a grievance process at the 7 contractor level. Notwithstanding sections 41-1092.02, 41-1092.03 and 8 41-1092.05, the administration shall develop rules to establish the 9 procedure and time frame for the informal resolution of grievances and 10 appeals. A grievance that is not related to a claim for payment of system 11 covered services shall be filed in writing with and received by the 12 administration or the prepaid capitated provider or program contractor not 13 later than sixty days after the date of the adverse action, decision or 14 policy implementation being grieved. A grievance that is related to a 15 claim for payment of system covered services must be filed in writing and 16 received by the administration or the prepaid capitated provider or 17 program contractor within twelve months after the date of service, within 18 twelve months after the date that eligibility is posted or within sixty 19 days after the date of the denial of a timely claim submission, whichever 20 is later. A grievance for the denial of a claim for reimbursement of 21 services may contest the validity of any adverse action, decision, policy 22 implementation or rule that related to or resulted in the full or partial 23 denial of the claim. A policy implementation may be subject to a 24 grievance procedure, but it may not be appealed for a hearing. The 25 administration is not required to participate in a mandatory settlement 26 conference if it is not a real party in interest. In any proceeding 27 before the administration, including a grievance or hearing, persons may 28 represent themselves or be represented by a duly authorized agent who is 29 not charging a fee. A legal entity may be represented by an officer, 30 partner or employee who is specifically authorized by the legal entity to 31 represent it in the particular proceeding. 32

5. Apply for and accept federal funds available under title XIX of 33 the social security act (P.L. 89-97; 79 Stat. 344; 42 United States Code 34 section 1396 (1980)) in support of the system. The application made by 35 the director pursuant to this paragraph shall be designed to qualify for 36 federal funding primarily on a prepaid capitated basis. Such funds may be 37 used only for the support of persons defined as eligible pursuant to title 38 XIX of the social security act or the approved section 1115 waiver. 39

6. At least thirty days before the implementation of a policy or a 40 change to an existing policy relating to reimbursement, provide notice to 41 interested parties. Parties interested in receiving notification of 42 policy changes shall submit a written request for notification to the 43 administration. 44

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7. In addition to the cost sharing requirements specified in 1 subsection D, paragraph 4 of this section: 2

(a) Charge monthly premiums up to the maximum amount allowed by 3 federal law to all populations of eligible persons who may be charged. 4

(b) Implement this paragraph to the extent permitted under the 5 federal deficit reduction act of 2005 and other federal laws, subject to 6 the approval of federal waiver authority and to the extent that any 7 changes in the cost sharing requirements under this paragraph would permit 8 this state to receive any enhanced federal matching rate. 9

C. The director is authorized to apply for any federal funds 10 available for the support of programs to investigate and prosecute 11 violations arising from the administration and operation of the system. 12 Available state funds appropriated for the administration and operation of 13 the system may be used as matching funds to secure federal funds pursuant 14 to this subsection. 15

D. The director may adopt rules or procedures to do the following: 16 1. Authorize advance payments based on estimated liability to a 17

contractor or a noncontracting provider after the contractor or 18 noncontracting provider has submitted a claim for services and before the 19 claim is ultimately resolved. The rules shall specify that any advance 20 payment shall be conditioned on the execution before payment of a contract 21 with the contractor or noncontracting provider that requires the 22 administration to retain a specified percentage, which shall be at least 23 twenty percent, of the claimed amount as security and that requires 24 repayment to the administration if the administration makes any 25 overpayment. 26

2. Defer liability, in whole or in part, of contractors for care 27 provided to members who are hospitalized on the date of enrollment or 28 under other circumstances. Payment shall be on a capped fee-for-service 29 basis for services other than hospital services and at the rate 30 established pursuant to subsection G of this section for hospital services 31 or at the rate paid by the health plan, whichever is less. 32

3. Deputize, in writing, any qualified officer or employee in the 33 administration to perform any act that the director by law is empowered to 34 do or charged with the responsibility of doing, including the authority to 35 issue final administrative decisions pursuant to section 41-1092.08. 36

4. Notwithstanding any other law, require persons eligible pursuant 37 to section 36-2901, paragraph 6, subdivision (a), section 36-2931 and 38 section 36-2981, paragraph 6 to be financially responsible for any cost 39 sharing requirements established in a state plan or a section 1115 waiver 40 and approved by the centers for medicare and medicaid services. Cost 41 sharing requirements may include copayments, coinsurance, deductibles, 42 enrollment fees and monthly premiums for enrolled members, including 43 households with children enrolled in the Arizona long-term care system. 44

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E. The director shall adopt rules that further specify the medical 1 care and hospital services that are covered by the system pursuant to 2 section 36-2907. 3

F. In addition to the rules otherwise specified in this article, 4 the director may adopt necessary rules pursuant to title 41, chapter 6 to 5 carry out this article. Rules adopted by the director pursuant to this 6 subsection shall consider the differences between rural and urban 7 conditions on the delivery of hospitalization and medical care. 8

G. For inpatient hospital admissions and outpatient hospital 9 services on and after March 1, 1993, the administration shall adopt rules 10 for the reimbursement of hospitals according to the following procedures: 11

1. For inpatient hospital stays from March 1, 1993 through 12 September 30, 2014, the administration shall use a prospective tiered per 13 diem methodology, using hospital peer groups if analysis shows that cost 14 differences can be attributed to independently definable features that 15 hospitals within a peer group share. In peer grouping the administration 16 may consider such factors as length of stay differences and labor market 17 variations. If there are no cost differences, the administration shall 18 implement a stop loss-stop gain or similar mechanism. Any stop loss-stop 19 gain or similar mechanism shall ensure that the tiered per diem rates 20 assigned to a hospital do not represent less than ninety percent of its 21 1990 base year costs or more than one hundred ten percent of its 1990 base 22 year costs, adjusted by an audit factor, during the period of March 1, 23 1993 through September 30, 1994. The tiered per diem rates set for 24 hospitals shall represent no less than eighty-seven and one-half percent 25 or more than one hundred twelve and one-half percent of its 1990 base year 26 costs, adjusted by an audit factor, from October 1, 1994 through 27 September 30, 1995 and no less than eighty-five percent or more than one 28 hundred fifteen percent of its 1990 base year costs, adjusted by an audit 29 factor, from October 1, 1995 through September 30, 1996. For the periods 30 after September 30, 1996 no stop loss-stop gain or similar mechanisms 31 shall be in effect. An adjustment in the stop loss-stop gain percentage 32 may be made to ensure that total payments do not increase as a result of 33 this provision. If peer groups are used, the administration shall 34 establish initial peer group designations for each hospital before 35 implementation of the per diem system. The administration may also use a 36 negotiated rate methodology. The tiered per diem methodology may include 37 separate consideration for specialty hospitals that limit their provision 38 of services to specific patient populations, such as rehabilitative 39 patients or children. The initial per diem rates shall be based on 40 hospital claims and encounter data for dates of service November 1, 1990 41 through October 31, 1991 and processed through May of 1992. The 42 administration may also establish a separate reimbursement methodology for 43 claims with extraordinarily high costs per day that exceed thresholds 44 established by the administration. 45

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2. For rates effective on October 1, 1994, and annually through 1 September 30, 2011, the administration shall adjust tiered per diem 2 payments for inpatient hospital care by the data resources incorporated 3 market basket index for prospective payment system hospitals. For rates 4 effective beginning on October 1, 1999, the administration shall adjust 5 payments to reflect changes in length of stay for the maternity and 6 nursery tiers. 7

3. Through June 30, 2004, for outpatient hospital services, the 8 administration shall reimburse a hospital by applying a hospital specific 9 outpatient cost-to-charge ratio to the covered charges. Beginning on 10 July 1, 2004 through June 30, 2005, the administration shall reimburse a 11 hospital by applying a hospital specific outpatient cost-to-charge ratio 12 to covered charges. If the hospital increases its charges for outpatient 13 services filed with the Arizona department of health services pursuant to 14 chapter 4, article 3 of this title, by more than 4.7 percent for dates of 15 service effective on or after July 1, 2004, the hospital specific 16 cost-to-charge ratio will be reduced by the amount that it exceeds 4.7 17 percent. If charges exceed 4.7 percent, the effective date of the 18 increased charges will be the effective date of the adjusted Arizona 19 health care cost containment system cost-to-charge ratio. The 20 administration shall develop the methodology for a capped fee-for-service 21 schedule and a statewide cost-to-charge ratio. Any covered outpatient 22 service not included in the capped fee-for-service schedule shall be 23 reimbursed by applying the statewide cost-to-charge ratio that is based on 24 the services not included in the capped fee-for-service schedule. 25 Beginning on July 1, 2005, the administration shall reimburse clean claims 26 with dates of service on or after July 1, 2005, based on the capped 27 fee-for-service schedule or the statewide cost-to-charge ratio established 28 pursuant to this paragraph. The administration may make additional 29 adjustments to the outpatient hospital rates established pursuant to this 30 section based on other factors, including the number of beds in the 31 hospital, specialty services available to patients and the geographic 32 location of the hospital. 33

4. Except if submitted under an electronic claims submission 34 system, a hospital bill is considered received for purposes of this 35 paragraph on initial receipt of the legible, error-free claim form by the 36 administration if the claim includes the following error-free 37 documentation in legible form: 38

(a) An admission face sheet. 39 (b) An itemized statement. 40 (c) An admission history and physical. 41 (d) A discharge summary or an interim summary if the claim is 42

split. 43 (e) An emergency record, if admission was through the emergency 44

room. 45

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(f) Operative reports, if applicable. 1 (g) A labor and delivery room report, if applicable. 2

Payment received by a hospital from the administration pursuant to this 3 subsection or from a contractor either by contract or pursuant to section 4 36-2904, subsection I is considered payment by the administration or the 5 contractor of the administration's or contractor's liability for the 6 hospital bill. A hospital may collect any unpaid portion of its bill from 7 other third-party payors or in situations covered by title 33, chapter 7, 8 article 3. 9

5. For services rendered on and after October 1, 1997, the 10 administration shall pay a hospital's rate established according to this 11 section subject to the following: 12

(a) If the hospital's bill is paid within thirty days of the date 13 the bill was received, the administration shall pay ninety-nine percent of 14 the rate. 15

(b) If the hospital's bill is paid after thirty days but within 16 sixty days of the date the bill was received, the administration shall pay 17 one hundred percent of the rate. 18

(c) If the hospital's bill is paid any time after sixty days of the 19 date the bill was received, the administration shall pay one hundred 20 percent of the rate plus a fee of one percent per month for each month or 21 portion of a month following the sixtieth day of receipt of the bill until 22 the date of payment. 23

6. In developing the reimbursement methodology, if a review of the 24 reports filed by a hospital pursuant to section 36-125.04 indicates that 25 further investigation is considered necessary to verify the accuracy of 26 the information in the reports, the administration may examine the 27 hospital's records and accounts related to the reporting requirements of 28 section 36-125.04. The administration shall bear the cost incurred in 29 connection with this examination unless the administration finds that the 30 records examined are significantly deficient or incorrect, in which case 31 the administration may charge the cost of the investigation to the 32 hospital examined. 33

7. Except for privileged medical information, the administration 34 shall make available for public inspection the cost and charge data and 35 the calculations used by the administration to determine payments under 36 the tiered per diem system, provided that individual hospitals are not 37 identified by name. The administration shall make the data and 38 calculations available for public inspection during regular business hours 39 and shall provide copies of the data and calculations to individuals 40 requesting such copies within thirty days of receipt of a written request. 41 The administration may charge a reasonable fee for the provision of the 42 data or information. 43

8. The prospective tiered per diem payment methodology for 44 inpatient hospital services shall include a mechanism for the prospective 45

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payment of inpatient hospital capital related costs. The capital payment 1 shall include hospital specific and statewide average amounts. For tiered 2 per diem rates beginning on October 1, 1999, the capital related cost 3 component is frozen at the blended rate of forty percent of the hospital 4 specific capital cost and sixty percent of the statewide average capital 5 cost in effect as of January 1, 1999 and as further adjusted by the 6 calculation of tier rates for maternity and nursery as prescribed by law. 7 Through September 30, 2011, the administration shall adjust the capital 8 related cost component by the data resources incorporated market basket 9 index for prospective payment system hospitals. 10

9. For graduate medical education programs: 11 (a) Beginning September 30, 1997, the administration shall 12

establish a separate graduate medical education program to reimburse 13 hospitals that had graduate medical education programs that were approved 14 by the administration as of October 1, 1999. The administration shall 15 separately account for monies for the graduate medical education program 16 based on the total reimbursement for graduate medical education reimbursed 17 to hospitals by the system in federal fiscal year 1995-1996 pursuant to 18 the tiered per diem methodology specified in this section. The graduate 19 medical education program reimbursement shall be adjusted annually by the 20 increase or decrease in the index published by the global insight hospital 21 market basket index for prospective hospital reimbursement. Subject to 22 legislative appropriation, on an annual basis, each qualified hospital 23 shall receive a single payment from the graduate medical education program 24 that is equal to the same percentage of graduate medical education 25 reimbursement that was paid by the system in federal fiscal year 26 1995-1996. Any reimbursement for graduate medical education made by the 27 administration shall not be subject to future settlements or appeals by 28 the hospitals to the administration. The monies available under this 29 subdivision shall not exceed the fiscal year 2005-2006 appropriation 30 adjusted annually by the increase or decrease in the index published by 31 the global insight hospital market basket index for prospective hospital 32 reimbursement, except for monies distributed for expansions pursuant to 33 subdivision (b) of this paragraph. 34

(b) The monies available for graduate medical education programs 35 pursuant to this subdivision shall not exceed the fiscal year 2006-2007 36 appropriation adjusted annually by the increase or decrease in the index 37 published by the global insight hospital market basket index for 38 prospective hospital reimbursement. Graduate medical education programs 39 eligible for such reimbursement are not precluded from receiving 40 reimbursement for funding under subdivision (c) of this paragraph. 41 Beginning July 1, 2006, the administration shall distribute any monies 42 appropriated for graduate medical education above the amount prescribed in 43 subdivision (a) of this paragraph in the following order or priority: 44

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(i) For the direct costs to support the expansion of graduate 1 medical education programs established before July 1, 2006 at hospitals 2 that do not receive payments pursuant to subdivision (a) of this 3 paragraph. These programs must be approved by the administration. 4

(ii) For the direct costs to support the expansion of graduate 5 medical education programs established on or before October 1, 1999. 6 These programs must be approved by the administration. 7

(c) The administration shall distribute to hospitals any monies 8 appropriated for graduate medical education above the amount prescribed in 9 subdivisions (a) and (b) of this paragraph for the following purposes: 10

(i) For the direct costs of graduate medical education programs 11 established or expanded on or after July 1, 2006. These programs must be 12 approved by the administration. 13

(ii) For a portion of additional indirect graduate medical 14 education costs for programs that are located in a county with a 15 population of less than five hundred thousand persons at the time the 16 residency position was created or for a residency position that includes a 17 rotation in a county with a population of less than five hundred thousand 18 persons at the time the residency position was established. These 19 programs must be approved by the administration. 20

(d) The administration shall develop, by rule, the formula by which 21 the monies are distributed. 22

(e) Each graduate medical education program that receives funding 23 pursuant to subdivision (b) or (c) of this paragraph shall identify and 24 report to the administration the number of new residency positions created 25 by the funding provided in this paragraph, including positions in rural 26 areas. The program shall also report information related to the number of 27 funded residency positions that resulted in physicians locating their 28 practices in this state. The administration shall report to the joint 29 legislative budget committee by February 1 of each year on the number of 30 new residency positions as reported by the graduate medical education 31 programs. 32

(f) Local, county and tribal governments and any PUBLIC university 33 under the jurisdiction of the Arizona board of regents IN THIS STATE may 34 provide monies in addition to any state general fund monies appropriated 35 for graduate medical education in order to qualify for additional matching 36 federal monies for providers, programs or positions in a specific locality 37 and costs incurred pursuant to a specific contract between the 38 administration and providers or other entities to provide graduate medical 39 education services as an administrative activity. Payments by the 40 administration pursuant to this subdivision may be limited to those 41 providers designated by the funding entity and may be based on any 42 methodology deemed appropriate by the administration, including replacing 43 any payments that might otherwise have been paid pursuant to subdivision 44 (a), (b) or (c) of this paragraph had sufficient state general fund monies 45

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or other monies been appropriated to fully fund those payments. These 1 programs, positions, payment methodologies and administrative graduate 2 medical education services must be approved by the administration and the 3 centers for medicare and medicaid services. The administration shall 4 report to the president of the senate, the speaker of the house of 5 representatives and the director of the joint legislative budget committee 6 on or before July 1 of each year on the amount of money contributed and 7 number of residency positions funded by local, county and tribal 8 governments, including the amount of federal matching monies used. 9

(g) Any funds appropriated but not allocated by the administration 10 for subdivision (b) or (c) of this paragraph may be reallocated if funding 11 for either subdivision is insufficient to cover appropriate graduate 12 medical education costs. 13

10. Notwithstanding section 41-1005, subsection A, paragraph 9, the 14 administration shall adopt rules pursuant to title 41, chapter 6 15 establishing the methodology for determining the prospective tiered per 16 diem payments that are in effect through September 30, 2014. 17

11. For inpatient hospital services rendered on or after October 1, 18 2011, the prospective tiered per diem payment rates are permanently reset 19 to the amounts payable for those services as of October 1, 2011 pursuant 20 to this subsection. 21

12. The administration shall adopt a diagnosis-related group based 22 hospital reimbursement methodology consistent with title XIX of the social 23 security act for inpatient dates of service on and after October 1, 2014. 24 The administration may make additional adjustments to the inpatient 25 hospital rates established pursuant to this section for hospitals that are 26 publicly operated or based on other factors, including the number of beds 27 in the hospital, the specialty services available to patients, the 28 geographic location and diagnosis-related group codes that are made 29 publicly available by the hospital pursuant to section 36-437. The 30 administration may also provide additional reimbursement for 31 extraordinarily high cost cases that exceed a threshold above the standard 32 payment. The administration may also establish a separate payment 33 methodology for specific services or hospitals serving unique populations. 34

H. The director may adopt rules that specify enrollment procedures, 35 including notice to contractors of enrollment. The rules may provide for 36 varying time limits for enrollment in different situations. The 37 administration shall specify in contract when a person who has been 38 determined eligible will be enrolled with that contractor and the date on 39 which the contractor will be financially responsible for health and 40 medical services to the person. 41

I. The administration may make direct payments to hospitals for 42 hospitalization and medical care provided to a member in accordance with 43 this article and rules. The director may adopt rules to establish the 44 procedures by which the administration shall pay hospitals pursuant to 45

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this subsection if a contractor fails to make timely payment to a 1 hospital. Such payment shall be at a level determined pursuant to section 2 36-2904, subsection H or I. The director may withhold payment due to a 3 contractor in the amount of any payment made directly to a hospital by the 4 administration on behalf of a contractor pursuant to this subsection. 5

J. The director shall establish a special unit within the 6 administration for the purpose of monitoring the third-party payment 7 collections required by contractors and noncontracting providers pursuant 8 to section 36-2903, subsection B, paragraph 10 and subsection F and 9 section 36-2915, subsection E. The director shall determine by rule: 10

1. The type of third-party payments to be monitored pursuant to 11 this subsection. 12

2. The percentage of third-party payments that is collected by a 13 contractor or noncontracting provider and that the contractor or 14 noncontracting provider may keep and the percentage of such payments that 15 the contractor or noncontracting provider may be required to pay to the 16 administration. Contractors and noncontracting providers must pay to the 17 administration one hundred percent of all third-party payments that are 18 collected and that duplicate administration fee-for-service payments. A 19 contractor that contracts with the administration pursuant to section 20 36-2904, subsection A may be entitled to retain a percentage of 21 third-party payments if the payments collected and retained by a 22 contractor are reflected in reduced capitation rates. A contractor may be 23 required to pay the administration a percentage of third-party payments 24 that are collected by a contractor and that are not reflected in reduced 25 capitation rates. 26

K. The administration shall establish procedures to apply to the 27 following if a provider that has a contract with a contractor or 28 noncontracting provider seeks to collect from an individual or financially 29 responsible relative or representative a claim that exceeds the amount 30 that is reimbursed or should be reimbursed by the system: 31

1. On written notice from the administration or oral or written 32 notice from a member that a claim for covered services may be in violation 33 of this section, the provider that has a contract with a contractor or 34 noncontracting provider shall investigate the inquiry and verify whether 35 the person was eligible for services at the time that covered services 36 were provided. If the claim was paid or should have been paid by the 37 system, the provider that has a contract with a contractor or 38 noncontracting provider shall not continue billing the member. 39

2. If the claim was paid or should have been paid by the system and 40 the disputed claim has been referred for collection to a collection agency 41 or referred to a credit reporting bureau, the provider that has a contract 42 with a contractor or noncontracting provider shall: 43

(a) Notify the collection agency and request that all attempts to 44 collect this specific charge be terminated immediately. 45

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(b) Advise all credit reporting bureaus that the reported 1 delinquency was in error and request that the affected credit report be 2 corrected to remove any notation about this specific delinquency. 3

(c) Notify the administration and the member that the request for 4 payment was in error and that the collection agency and credit reporting 5 bureaus have been notified. 6

3. If the administration determines that a provider that has a 7 contract with a contractor or noncontracting provider has billed a member 8 for charges that were paid or should have been paid by the administration, 9 the administration shall send written notification by certified mail or 10 other service with proof of delivery to the provider that has a contract 11 with a contractor or noncontracting provider stating that this billing is 12 in violation of federal and state law. If, twenty-one days or more after 13 receiving the notification, a provider that has a contract with a 14 contractor or noncontracting provider knowingly continues billing a member 15 for charges that were paid or should have been paid by the system, the 16 administration may assess a civil penalty in an amount equal to three 17 times the amount of the billing and reduce payment to the provider that 18 has a contract with a contractor or noncontracting provider accordingly. 19 Receipt of delivery signed by the addressee or the addressee's employee is 20 prima facie evidence of knowledge. Civil penalties collected pursuant to 21 this subsection shall be deposited in the state general fund. Section 22 36-2918, subsections C, D and F, relating to the imposition, collection 23 and enforcement of civil penalties, apply to civil penalties imposed 24 pursuant to this paragraph. 25

L. The administration may conduct postpayment review of all claims 26 paid by the administration and may recoup any monies erroneously paid. 27 The director may adopt rules that specify procedures for conducting 28 postpayment review. A contractor may conduct a postpayment review of all 29 claims paid by the contractor and may recoup monies that are erroneously 30 paid. 31

M. Subject to title 41, chapter 4, article 4, the director or the 32 director's designee may employ and supervise personnel necessary to assist 33 the director in performing the functions of the administration. 34

N. The administration may contract with contractors for obstetrical 35 care who are eligible to provide services under title XIX of the social 36 security act. 37

O. Notwithstanding any other law, on federal approval the 38 administration may make disproportionate share payments to private 39 hospitals, county operated hospitals, including hospitals owned or leased 40 by a special health care district, and state operated institutions for 41 mental disease beginning October 1, 1991 in accordance with federal law 42 and subject to legislative appropriation. If at any time the 43 administration receives written notification from federal authorities of 44 any change or difference in the actual or estimated amount of federal 45

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funds available for disproportionate share payments from the amount 1 reflected in the legislative appropriation for such purposes, the 2 administration shall provide written notification of such change or 3 difference to the president and the minority leader of the senate, the 4 speaker and the minority leader of the house of representatives, the 5 director of the joint legislative budget committee, the legislative 6 committee of reference and any hospital trade association within this 7 state, within three working days not including weekends after receipt of 8 the notice of the change or difference. In calculating disproportionate 9 share payments as prescribed in this section, the administration may use 10 either a methodology based on claims and encounter data that is submitted 11 to the administration from contractors or a methodology based on data that 12 is reported to the administration by private hospitals and state operated 13 institutions for mental disease. The selected methodology applies to all 14 private hospitals and state operated institutions for mental disease 15 qualifying for disproportionate share payments. 16

P. Disproportionate share payments made pursuant to subsection O of 17 this section include amounts for disproportionate share hospitals 18 designated by political subdivisions of this state, tribal governments and 19 PUBLIC universities under the jurisdiction of the Arizona board of regents 20 IN THIS STATE. Subject to the approval of the centers for medicare and 21 medicaid services, any amount of federal funding allotted to this state 22 pursuant to section 1923(f) of the social security act and not otherwise 23 spent under subsection O of this section shall be made available for 24 distribution pursuant to this subsection. Political subdivisions of this 25 state, tribal governments and PUBLIC universities under the jurisdiction 26 of the Arizona board of regents IN THIS STATE may designate hospitals 27 eligible to receive disproportionate share payments in an amount up to the 28 limit prescribed in section 1923(g) of the social security act if those 29 political subdivisions, tribal governments or universities provide 30 sufficient monies to qualify for the matching federal monies for the 31 disproportionate share payments. 32

Q. Notwithstanding any law to the contrary, the administration may 33 receive confidential adoption information to determine whether an adopted 34 child should be terminated from the system. 35

R. The adoption agency or the adoption attorney shall notify the 36 administration within thirty days after an eligible person receiving 37 services has placed that person's child for adoption. 38

S. If the administration implements an electronic claims submission 39 system, it may adopt procedures pursuant to subsection G of this section 40 requiring documentation different than prescribed under subsection G, 41 paragraph 4 of this section. 42

T. In addition to any requirements adopted pursuant to subsection 43 D, paragraph 4 of this section, notwithstanding any other law, subject to 44 approval by the centers for medicare and medicaid services, beginning 45

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July 1, 2011, members eligible pursuant to section 36-2901, paragraph 6, 1 subdivision (a), section 36-2931 and section 36-2981, paragraph 6 shall 2 pay the following: 3

1. A monthly premium of fifteen dollars, except that the total 4 monthly premium for an entire household shall not exceed sixty dollars. 5

2. A copayment of five dollars for each physician office visit. 6 3. A copayment of ten dollars for each urgent care visit. 7 4. A copayment of thirty dollars for each emergency department 8

visit. 9 U. Subject to the approval of the centers for medicare and medicaid 10

services, political subdivisions of this state, tribal governments and any 11 university under the jurisdiction of the Arizona board of regents PUBLIC 12 UNIVERSITIES IN THIS STATE may provide to the Arizona health care cost 13 containment system administration monies in addition to any state general 14 fund monies appropriated for critical access hospitals in order to qualify 15 for additional federal monies. Any amount of federal monies received by 16 this state pursuant to this subsection shall be distributed as 17 supplemental payments to critical access hospitals. 18

V. For the purposes of this section, "disproportionate share 19 payment" means a payment to a hospital that serves a disproportionate 20 share of low-income patients as described by 42 United States Code section 21 1396r-4. 22


38-533. Exemptions 25 This article does not apply to an employee or former employee of a 26

state university or the board of regents which GOVERNING BOARD OF A 27 UNIVERSITY THAT has in effect at the time a personnel action is taken 28 against the employee a rule or provision for the protection of its 29 employees from reprisal for the disclosure of information to a public 30 body, except that the employee or former employee may appeal the final 31 administrative decision to the superior court as provided in title 12, 32 chapter 7, article 6. Notwithstanding section 12-910, an employee or 33 former employee who has been dismissed is entitled to a trial de novo in 34 superior court. 35


38-611. Compensation of certain state officers and employees 38 A. Except as otherwise provided in subsections B and C of this 39

section, any officer or employee of the state, or any of its agencies, is 40 entitled to receive a salary within the range as determined by the 41 department of administration unless modified by the legislature. 42

B. Elected state officers, employees of the supreme court, 43 employees of the court of appeals, employees of the legislature, employees 44 of the governor's office, employees of the Arizona state schools for the 45

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deaf and the blind except the superintendent and the medical officer and 1 all employees of the Arizona board of regents GOVERNING BOARDS OF THE 2 UNIVERSITIES and the state universities are exempt from the provisions of 3 this section. 4

C. Except as otherwise provided by statute or specific legislative 5 appropriation, members of boards, commissions, councils or advisory 6 committees who are authorized by law to receive compensation may receive 7 compensation at the rate of not to exceed thirty dollars for each day 8 engaged in the service of such board, commission, council or advisory 9 committee. 10


38-612. Administration of payroll salary deductions 13 A. There shall be no payroll salary deductions from the 14

compensation of state officers or employees except as specifically 15 authorized by federal law or regulation or by a statute of this state. An 16 administrative agency of this state may not authorize any other deduction. 17

B. Notwithstanding subsection A of this section, reductions to 18 retroactive payroll compensation are authorized pursuant to section 19 38-1106, subsection J, paragraph 5. 20

C. In addition to those payroll salary deductions required by 21 federal law or regulation or by statute, state officers or employees may 22 authorize deductions to be made from their salaries or wages for the 23 payment of: 24

1. Premiums on any health benefits, disability plans or group life 25 plans provided for by statute and any existing insurance programs already 26 provided by payroll deduction. 27

2. Shares or obligations to any state or federally chartered credit 28 union established primarily for the purpose of serving state officers and 29 employees and their families. 30

3. Dues in a recognized association composed principally of 31 employees and former employees of agencies of this state, subject to the 32 following criteria: 33

(a) When composed of at least one thousand state employees other 34 than employees of the state universities, the department of public safety 35 and academic personnel of the Arizona state schools for the deaf and the 36 blind. 37

(b) When composed of at least twenty-five percent of the academic 38 personnel or of the nonacademic employees of any state university. 39

(c) When composed of at least twenty-five percent of the academic 40 personnel of the Arizona state schools for the deaf and the blind. 41

(d) When composed of at least four hundred state employees who are 42 certified as peace officers by the Arizona peace officer standards and 43 training board established by section 41-1821. 44

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(e) When composed of a combined total of at least eight hundred 1 state employees described in subdivision (d) of this paragraph, state 2 employees of the state department of corrections and state employees who 3 are law enforcement officers. 4

4. Deferred compensation or tax sheltered annuity salary reductions 5 when made under approved plans. 6

5. Federal savings bond plans. 7 6. Recurrent fees, charges or other payments payable to a state 8

agency under a collection plan approved by the director of the department 9 of administration. 10

7. Except as provided in subsection G of this section, 11 contributions made to a charitable organization: 12

(a) Organized and operated exclusively for charitable purposes and 13 selected by the presidents of the state universities. Employees of the 14 state universities shall be advised by form of the charitable 15 organizations to which the employees may contribute through payroll salary 16 deductions. The advisory provided under this subdivision shall be 17 substantially similar to the following and prominently printed: 18

"You may contribute to any charitable organization registered under 19 internal revenue code section 501(c)(3), tax exempt status. 20

________________________________ 21 Charitable organization name" 22 This subdivision applies only to academic personnel and nonacademic 23

employees of the state universities. 24 (b) Organized and operated exclusively for charitable purposes, 25

provided a fund drive by such an organization shall be applicable to all 26 state agencies except the state universities covered under subdivision (a) 27 of this paragraph and no state officer or employee of state agencies 28 subject to this subdivision may authorize more than one deduction for 29 charitable purposes to be in effect at the same time. This subdivision 30 applies to all state agencies except the universities covered under 31 subdivision (a) of this paragraph. 32

8. Contributions made for the purpose of contributing to a fund 33 raising FUND-RAISING campaign for a university or a club for faculty or 34 staff, or both, which THAT is recognized by the university president and 35 authorized by the Arizona board of regents GOVERNING BOARD OF THAT 36 UNIVERSITY. This paragraph applies only to academic personnel and 37 nonacademic employees of the state universities. 38

9. Charges payable for transportation expenses pursuant to 39 section 41-710.01. 40

10. Payments ordered by courts of competent jurisdiction within 41 this state. 42

11. Automobile or homeowner's insurance premiums. 43

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12. Premiums for the following state-sponsored group benefits that 1 are established primarily for the purpose of serving state officers and 2 employees and their families: 3

(a) Long-term care insurance. 4 (b) Critical care insurance. 5 (c) Prepaid legal services. 6 (d) Identity theft protection services. 7 13. A computer system as defined in section 13-2301 for personal 8

use. 9 D. In order for the department of administration to establish and 10

maintain a dues deduction pursuant to subsection C, paragraph 3 of this 11 section, the department of administration may establish and maintain the 12 deduction without the appropriation of any additional monies or 13 technological improvements. The department of administration shall track 14 all personnel hours dedicated to dues deduction. The department of 15 administration may charge a fee to a recognized association that qualifies 16 under subsection C, paragraph 3 of this section for establishing the 17 automatic dues deduction and anytime changes are needed in the automatic 18 dues deduction system as a result of an increase or decrease in 19 association dues. If the membership criteria of a recognized association 20 falls FALL below the criteria set forth in subsection C, paragraph 3 of 21 this section, the recognized association shall be on probation for one 22 year. If the membership of a recognized association falls below the 23 criteria set forth in subsection C, paragraph 3 of this section for more 24 than one year, or if the members of the association engage in a work 25 slowdown or work stoppage, the dues deduction authorized by this section 26 shall immediately be discontinued. 27

E. For those state officers and employees under payroll systems 28 that are under the direction of the director of the department of 29 administration, the director shall provide for the administration of 30 payroll deductions for the purposes set forth in this section. For all 31 other state officers and employees and for persons receiving allowances or 32 benefits under other state payroll and retirement systems, the appropriate 33 state officer shall provide for such administration of payroll deductions. 34 Such administration shall operate without cost or contribution from the 35 state other than the incidental expense of making the deductions and 36 remittances to the payees. If any payee requests additional services, the 37 director of the department of administration or any other appropriate 38 state officer may require payment for the additional cost of providing 39 such services. 40

F. As a means of readily identifying the employee from whom payroll 41 deductions are to be made, the state officer administering payroll 42 deductions may request an employee to enter such THE employee's social 43 security identification number on the payroll deduction authorization. 44 Such THIS number shall not be used for any other purpose. 45

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G. There shall be no payroll salary deductions from the 1 compensation of state officers or employees for contributions made to a 2 charitable organization that performs a nonfederally qualified abortion or 3 maintains or operates a facility where a nonfederally qualified abortion 4 is performed for the provision of family planning services. For the 5 purposes of this subsection, "nonfederally qualified abortion" has the 6 same meaning prescribed in section 35-196.05 MEANS AN ABORTION THAT DOES 7 NOT MEET THE REQUIREMENTS FOR FEDERAL REIMBURSEMENT UNDER TITLE XIX OF THE 8 SOCIAL SECURITY ACT. 9

H. The THIS state, the director of the department of administration 10 or any other appropriate state officer shall be relieved of any liability 11 to employees authorizing deductions or organizations receiving deductions 12 that may result from authorizations pursuant to this section. 13


38-615. Payment for accumulated sick leave; requirements; 16 limit; definition 17

A. An officer or employee of this state, subject to legislative 18 appropriation, or an officer or employee of a county, subject to 19 authorization by the board of supervisors, is eligible, on retirement, to 20 receive benefits as follows: 21

1. An officer or employee who has at least five hundred but less 22 than seven hundred fifty hours of sick leave is entitled to receive 23 payments equal to twenty-five per cent PERCENT of the officer's or 24 employee's salary at the officer's or employee's current hourly rate for 25 each hour of accumulated sick leave. 26

2. An officer or employee who has at least seven hundred fifty but 27 less than one thousand hours of sick leave is entitled to receive payments 28 equal to thirty-three per cent PERCENT of the officer's or employee's 29 salary at the officer's or employee's current hourly rate for each hour of 30 accumulated sick leave. 31

3. An officer or employee who has at least one thousand hours of 32 sick leave is entitled to receive payments equal to fifty per cent PERCENT 33 of the officer's or employee's salary at the officer's or employee's 34 current hourly rate for each hour of accumulated sick leave not to exceed 35 one thousand five hundred hours of accumulated sick leave. 36

B. In order to be eligible to receive payments pursuant to 37 subsection A of this section: 38

1. An officer or employee must establish a retirement date not 39 later than thirty-one days after termination of employment by qualifying 40 with an authorized retirement system or plan of this state. 41

2. The retirement date must be effective not later than thirty-one 42 days after termination of employment. 43

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3. An officer or employee shall elect retirement benefits that are 1 defined not later than thirty-one days after termination of employment. 2

C. An officer or employee who receives payments as provided in 3 subsection A of this section shall not receive more than thirty thousand 4 dollars. 5

D. If an officer or employee receives payments pursuant to 6 subsection A of this section, the officer or employee shall be paid the 7 amount due the officer or employee either in a lump sum or in installments 8 over a three year THREE-YEAR period. 9

E. If an officer or employee dies before the officer or employee 10 receives the total payment due to the officer or employee or if an officer 11 or employee is eligible for normal retirement but has not retired at the 12 time of the officer's or employee's death, the officer's or employee's 13 beneficiary is entitled to receive the balance due to the officer or 14 employee in a lump sum. 15

F. Notwithstanding any other law: 16 1. The cash value of the sick leave credit pursuant to subsection A 17

of this section shall not be used to compute the average salary. 18 2. The payment authorized by this section for accumulated sick 19

leave is not salary or compensation for the purposes of making retirement 20 contributions or computing any pension benefit. 21

3. The sick leave must be available for use by the officer or 22 employee at the time of termination of employment. This section does not 23 apply to previously forfeited sick leave. 24

G. This section applies to an officer or employee of this state or 25 a county who is eligible to participate in the Arizona state retirement 26 system as provided in chapter 5, article 2 of this title, in the public 27 safety personnel retirement system as provided in chapter 5, article 4 of 28 this title, in the corrections officer retirement plan as provided in 29 chapter 5, article 6 of this title or in an optional retirement program 30 established by the Arizona board of regents GOVERNING BOARD OF A 31 UNIVERSITY pursuant to section 15-1628. 32

H. This section applies retroactively to July 1, 1998 to an officer 33 or employee of a PUBLIC university under the jurisdiction of the Arizona 34 board of regents IN THIS STATE who participates in a federal retirement 35 system, except that this section does not apply to a participant in a 36 federal retirement system if the participant receives any sick leave 37 payment from the federal government. 38

I. This section applies only to officers or employees of this state 39 or a county whose compensation regulations provide for a forfeiture of 40 sick leave on retirement. 41

J. For the purposes of this section, "hourly rate" means an 42 officer's or employee's hourly salary on retirement, excluding overtime 43 pay and pay for unused annual leave. 44

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38-618. Performance based incentives program 3 A. The director of the department of administration and the 4

president of the Arizona board of regents GOVERNING BOARDS OF THE 5 UNIVERSITIES may JOINTLY establish a performance based incentives program 6 to promote efficiency and effectiveness in state government. The director 7 of the department of administration shall identify state agencies and the 8 president of the Arizona board of regents GOVERNING BOARDS shall identify 9 state universities in which to implement the program. 10

B. The director of the department of administration and the 11 president of the Arizona board of regents GOVERNING BOARDS OF THE 12 UNIVERSITIES shall cooperate with the directors of agencies and the 13 presidents of the identified universities, respectively, to: 14

1. Develop a performance based appraisal system of state employee 15 performance that is based on agency or university goals and objectives, as 16 identified and approved by the agency's or university's employees, 17 supervisors, director or president. 18

2. Authorize all agency directors and university presidents 19 participating in the program to recognize the performance of state 20 employees, who are under their authority, based on the outcome of the 21 appraisal conducted pursuant to paragraph 1 of this subsection. 22

C. The director of the department of administration shall cooperate 23 with the director of the department of public safety, the superintendent 24 of public instruction and the superintendent of the ARIZONA state schools 25 for the deaf and the blind to implement the performance based incentives 26 program. The president of the Arizona board of regents shall cooperate 27 with the president of each university under the jurisdiction of the 28 Arizona board of regents to implement the performance based incentives 29 program. 30

D. Notwithstanding section 35-174, subsection B, the director of 31 the department of administration, the director of the department of public 32 safety, the president of the Arizona board of regents GOVERNING BOARD OF 33 EACH UNIVERSITY, the superintendent of public instruction and the 34 superintendent of the ARIZONA state schools for the deaf and the blind may 35 authorize the expenditure of up to eighty per cent PERCENT of excess 36 vacancy savings to recognize employees of state agencies and state 37 universities who are under their respective authority and who are 38 participating in the performance based incentives program. In addition to 39 excess vacancy savings, the participating agency or university may use 40 monies appropriated from the state general fund or other sources, 41 including federal enhanced funding an agency or university receives for 42 quality initiatives. Federal enhanced monies do not revert to the state 43 general fund but remain in a separate agency or university account at the 44 end of the fiscal year for use by the agency or university in accordance 45

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with the terms and conditions imposed by the federal funding source. For 1 the purposes of this subsection, "excess vacancy savings" means the same 2 as "vacancy saving" as defined in section 35-174, subsection A, except 3 that excess vacancy savings are any vacancy savings that are over and 4 above the amount eliminated from an agency's budget as the result of the 5 applied vacancy factor reported in the annual appropriations report 6 prepared by the joint legislative budget committee. 7

E. As provided for in subsection D of this section, any incentive 8 or performance compensation using monies from excess vacancy savings or 9 other fund sources, including state general fund appropriations, shall not 10 be added to an agency's salary base. 11

F. Recognition of state employees may be in the form of increase in 12 compensation for future services, but the increase may not exceed two 13 hundred seventy-five dollars per month per employee. 14

G. An approved program shall notify the director of the department 15 of administration or the president of the Arizona board of regents 16 GOVERNING BOARD OF THE APPROPRIATE UNIVERSITY when it makes any 17 substantive changes to the approved program. 18


38-626. Out-of-state travel; approval; exemptions 21 A. When the official duties or activities of a public officer, 22

deputy or employee of the THIS state or of any department, institution, 23 commission, board or other agency of the THIS state necessitate 24 out-of-state travel, the travel order shall be countersigned by the agency 25 head or by the president of the respective university for its university 26 employees and is authority to pay the claims from any funds available for 27 such travel. The agency head or the university president may delegate the 28 authority to countersign out-of-state travel orders. Except as provided 29 by subsection B OF THIS SECTION, the department of administration shall: 30

1. Adopt policies and procedures for the approval of out-of-state 31 travel orders. 32

2. Disseminate these policies and procedures to all agencies. 33 3. Perform compliance reviews on out-of-state travel orders for 34

compliance with the policies and procedures. 35 4. Require that all outside travel orders shall be available for 36

public inspection. 37 B. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY 38

is responsible for implementing the provisions of subsection A, paragraphs 39 1, 3 and 4, OF THIS SECTION for the universities under its jurisdiction 40 THAT UNIVERSITY. 41

C. The requirements of subsection A OF THIS SECTION shall not apply 42 under the following: 43

1. When, by the shortest practical routing, travel through an 44 adjoining state is necessary to reach remote areas of this state. 45

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2. When any legislative member, officers and employees of the 1 legislature, the legislative council, joint legislative budget committee 2 members and employees, and other legislative interim committee members are 3 traveling on official business. 4


38-671. Employee benefits; exclusions; definitions 7 A. Notwithstanding any other law, any state employee WHO IS 8

initially hired on or after July 20, 2011 is not eligible to become a 9 member of any state retirement system before the twenty-seventh week of 10 employment. The state employee shall become a member of the state 11 retirement system on the twenty-seventh week of employment if membership 12 criteria are met under the state retirement system statutes. 13

B. Subsection A of this section does not apply to a person who is 14 already a member of the state retirement system. 15

C. For the purposes of this section: 16 1. "State employee" means a person who is employed by an agency, 17

department, board or commission of this state, a PUBLIC university under 18 the jurisdiction of the Arizona board of regents IN THIS STATE, the 19 judicial branch and whose salary is paid through the department of 20 administration, the Arizona corporation commission or the legislature. 21

2. "State retirement system" means the Arizona state retirement 22 system established by chapter 5, article 2 of this title and the long-term 23 disability program established by chapter 5, article 2.1 of this title. 24


38-727. Eligibility; options 27 A. The following provisions apply to all employees hired on or 28

after the effective date: 29 1. All employees and officers of this state and all officers and 30

employees of political subdivisions establishing a retirement plan 31 administered by the board pursuant to this article are subject to this 32 article, except that membership is not mandatory: 33

(a) On the part of any employee who is eligible and who elects to 34 participate in the optional retirement programs established by the Arizona 35 board of regents GOVERNING BOARD OF A UNIVERSITY pursuant to the authority 36 conferred by section 15-1628 or by a community college district board 37 pursuant to authority conferred by section 15-1451. 38

(b) For a state elected official who is subject to term limits, who 39 is elected or appointed before January 1, 2014, who is eligible for 40 participation in ASRS because the state elected official elected not to 41 participate in the elected officials' retirement plan as provided in 42 section 38-804, subsection A and who elects not to participate in ASRS as 43 provided in paragraph 7 of this subsection. 44

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(c) On the part of any employee or officer who is eligible to 1 participate and who participates in the elected officials' retirement plan 2 pursuant to article 3 of this chapter, the elected officials' defined 3 contribution retirement system pursuant to article 3.1 of this chapter, 4 the public safety personnel retirement system pursuant to article 4 of 5 this chapter or the corrections officer retirement plan pursuant to 6 article 6 of this chapter. 7

2. All employees and officers of political subdivisions whose 8 compensation is provided wholly or in part from state monies and who are 9 declared to be state employees and officers by the legislature for 10 retirement purposes are subject, on legislative enactment, to this article 11 and are members of ASRS. 12

3. Any member whose service terminates other than by death or 13 withdrawal from membership is deemed to be a member of ASRS until the 14 member's death benefit is paid. 15

4. Employees and officers shall not become members of ASRS and, if 16 they are members immediately before becoming employed as provided by this 17 section, shall have their membership status suspended while they are 18 employed by state departments paying the salaries of their officers and 19 employees wholly or in part from monies received from sources other than 20 appropriations from the state general fund for the period or periods 21 payment of the employer contributions is not made by or on behalf of the 22 departments. 23

5. Notwithstanding other provisions of this section, a temporary 24 employee of the legislature whose projected term of employment is for not 25 more than six months is ineligible for membership in ASRS. If the 26 employment continues beyond six successive months, the employee may elect 27 to either: 28

(a) Receive credit for service for the first six months of 29 employment and establish membership in ASRS as of the beginning of the 30 current term of employment if, within forty-five days after the first six 31 months of employment, both the employer and the employee contribute to 32 ASRS the amount that would have been required to be contributed to ASRS 33 during the first six months of employment as if the employee had been a 34 member of ASRS during those six months. 35

(b) Establish membership in ASRS as of the day following the 36 completion of six months of employment. 37

6. A person who is employed in postgraduate training in an approved 38 medical residency training program of an employer or a postdoctoral 39 scholar who is employed by a PUBLIC university under the jurisdiction of 40 the Arizona board of regents IN THIS STATE is ineligible for membership in 41 ASRS. 42

7. A state elected official who is subject to term limits, who is 43 elected or appointed before January 1, 2014 and who is eligible for 44 participation in ASRS because the state elected official elected not to 45

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participate in the elected officials' retirement plan as provided in 1 section 38-804, subsection A may elect not to participate in ASRS. The 2 election not to participate is specific for that term of office. The 3 state elected official who is subject to term limits shall make the 4 election in writing and file the election with ASRS within thirty days 5 after the elected official's retirement plan mails the notice to the state 6 elected official of the state elected official's eligibility to 7 participate in ASRS. The election is effective on the first day of the 8 state elected official's eligibility. If a state elected official who is 9 subject to term limits fails to make an election as provided in this 10 paragraph, the state elected official is deemed to have elected to 11 participate in ASRS. The election not to participate in ASRS is 12 irrevocable and constitutes a waiver of all benefits provided by ASRS for 13 the state elected official's entire term, except for any benefits accrued 14 by the state elected official in ASRS for periods of participation before 15 being elected to an office subject to term limits or any benefits 16 expressly provided by law. 17

8. A person may elect not to participate in ASRS if the person 18 becomes employed by an employer after the person has attained at least 19 sixty-five years of age, is not an active member, inactive member, retired 20 member or receiving benefits pursuant to article 2.1 of this chapter and 21 does not have any credited service or prior service in ASRS. The employee 22 shall make the election not to participate in writing and file the 23 election with ASRS within thirty days after employment. The election not 24 to participate is irrevocable for the remainder of the person's employment 25 for which the person made the election and constitutes a waiver of all 26 benefits provided by the Arizona state retirement system. The period the 27 person works is not eligible for purchase under section 38-743 or 38-744. 28

9. The following are ineligible for membership in ASRS: 29 (a) A person who performs services in a hospital, home or other 30

institution as an inmate or patient at the hospital, home or other 31 institution. 32

(b) A person who performs agricultural labor services, as defined 33 in section 210 of the social security act. 34

(c) A person who is a nonresident alien temporarily residing in the 35 United States and who holds an F-1, J-1, M-1 or Q-1 visa when services are 36 performed. 37

(d) A person who performs services for a school, college or 38 university in this state at which the person is enrolled as a student, as 39 defined by the employing institution. The employing institution shall 40 maintain an appeal process for a person who disagrees with the employing 41 institution's determination that the person is a student and not eligible 42 for membership in ASRS. 43

(e) A person who performs services under a program designed to 44 relieve the person from unemployment. 45

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B. The following elected officials are subject to this article if 1 the member's employer is an employer under article 3 of this chapter: 2

1. A state elected official who is subject to term limits, who is 3 elected or appointed on or before December 31, 2013 and who is an active, 4 an inactive or a retired member of ASRS or a member of ASRS with a 5 disability because the state elected official had previously elected not 6 to participate in the elected officials' retirement plan as provided in 7 section 38-804, subsection A. 8

2. An elected official, as defined in section 38-831, who is an 9 active, an inactive or a retired member of ASRS or a member of ASRS with a 10 disability, if the elected official's employer is a participating employer 11 under this article. 12


38-842. Definitions 15 In this article, unless the context otherwise requires: 16 1. "Accidental disability" means a physical or mental condition 17

that the local board finds totally and permanently prevents an employee 18 from performing a reasonable range of duties within the employee's job 19 classification and that was incurred in the performance of the employee's 20 duty. 21

2. "Accumulated contributions" means, for each member, the sum of 22 the amount of the member's aggregate contributions made to the fund and 23 the amount, if any, attributable to the employee's contributions before 24 the member's effective date under another public retirement system, other 25 than the federal social security act, and transferred to the fund minus 26 the benefits paid to or on behalf of the member. 27

3. "Actuarial equivalent" means equality in present value of the 28 aggregate amounts expected to be received under two different forms of 29 payment, based on mortality and interest assumptions adopted by the board. 30

4. "Alternate payee" means the spouse or former spouse of a 31 participant as designated in a domestic relations order. 32

5. "Alternate payee's portion" means benefits that are payable to 33 an alternate payee pursuant to a plan approved domestic relations order. 34

6. "Annuitant" means a person who is receiving a benefit pursuant 35 to section 38-846.01. 36

7. "Average monthly benefit compensation" means the result obtained 37 by dividing the total compensation paid to an employee during a considered 38 period by the number of months, including fractional months, in which such 39 compensation was received. For an employee who becomes a member of the 40 system: 41

(a) Before January 1, 2012, the considered period shall be the 42 three consecutive years within the last twenty completed years of credited 43 service that yield the highest average. 44

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(b) On or after January 1, 2012 and before July 1, 2017, the 1 considered period is the five consecutive years within the last twenty 2 completed years of credited service that yield the highest average. In 3 the computation under this paragraph, a period of nonpaid or partially 4 paid industrial leave shall be considered based on the compensation the 5 employee would have received in the employee's job classification if the 6 employee was not on industrial leave. 7

(c) On or after July 1, 2017, the considered period is the five 8 consecutive years within the last fifteen completed years of credited 9 service that yield the highest average. In the computation under this 10 paragraph, a period of nonpaid or partially paid industrial leave shall be 11 considered based on the compensation the employee would have received in 12 the employee's job classification if the employee was not on industrial 13 leave. 14

8. "Board" means the board of trustees of the system, who are the 15 persons appointed to invest and operate the fund. 16

9. "Catastrophic disability" means a physical and not a 17 psychological condition that the local board determines prevents the 18 employee from totally and permanently engaging in any gainful employment 19 and that results from a physical injury incurred in the performance of the 20 employee's duty. 21

10. "Certified peace officer" means a peace officer certified by 22 the Arizona peace officer standards and training board. 23

11. "Claimant" means any member or beneficiary who files an 24 application for benefits pursuant to this article. 25

12. "Compensation" means, for the purpose of computing retirement 26 benefits, base salary, overtime pay, shift differential pay, military 27 differential wage pay, compensatory time used by an employee in lieu of 28 overtime not otherwise paid by an employer and holiday pay paid to an 29 employee by the employer for the employee's performance of services in an 30 eligible group on a regular monthly, semimonthly or biweekly payroll basis 31 and longevity pay paid to an employee at least every six months for which 32 contributions are made to the system pursuant to section 38-843, 33 subsection D. Compensation does not include, for the purpose of computing 34 retirement benefits, payment for unused sick leave, payment in lieu of 35 vacation, payment for unused compensatory time or payment for any fringe 36 benefits. In addition, compensation does not include, for the purpose of 37 computing retirement benefits, payments made directly or indirectly by the 38 employer to the employee for work performed for a third party on a 39 contracted basis or any other type of agreement under which the third 40 party pays or reimburses the employer for the work performed by the 41 employee for that third party, except for third party contracts between 42 public agencies for law enforcement, criminal, traffic and crime 43 suppression activities training or fire, wildfire, emergency medical or 44 emergency management activities or where the employer supervises the 45

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employee's performance of law enforcement, criminal, traffic and crime 1 suppression activities training or fire, wildfire, emergency medical or 2 emergency management activities. For the purposes of this paragraph, 3 "base salary" means the amount of compensation each employee is regularly 4 paid for personal services rendered to an employer before the addition of 5 any extra monies, including overtime pay, shift differential pay, holiday 6 pay, longevity pay, fringe benefit pay and similar extra payments. 7

13. "Credited service" means the member's total period of service 8 before the member's effective date of participation, plus those 9 compensated periods of the member's service thereafter for which the 10 member made contributions to the fund. 11

14. "Cure period" means the ninety-day period in which a 12 participant or alternate payee may submit an amended domestic relations 13 order and request a determination, calculated from the time the system 14 issues a determination finding that a previously submitted domestic 15 relations order did not qualify as a plan approved domestic relations 16 order. 17

15. "Depository" means a bank in which all monies of the system are 18 deposited and held and from which all expenditures for benefits, expenses 19 and investments are disbursed. 20

16. "Determination" means a written document that indicates to a 21 participant and alternate payee whether a domestic relations order 22 qualifies as a plan approved domestic relations order. 23

17. "Determination period" means the ninety-day period in which the 24 system must review a domestic relations order that is submitted by a 25 participant or alternate payee to determine whether the domestic relations 26 order qualifies as a plan approved domestic relations order, calculated 27 from the time the system mails a notice of receipt to the participant and 28 alternate payee. 29

18. "Direct rollover" means a payment by the system to an eligible 30 retirement plan that is specified by the distributee. 31

19. "Distributee" means a member, a member's surviving spouse or a 32 member's spouse or former spouse who is the alternate payee under a plan 33 approved domestic relations order. 34

20. "Domestic relations order" means an order of a court of this 35 state that is made pursuant to the domestic relations laws of this state 36 and that creates or recognizes the existence of an alternate payee's right 37 to, or assigns to an alternate payee the right to, receive a portion of 38 the benefits payable to a participant. 39

21. "Effective date of participation" means July 1, 1968, except 40 with respect to employers and their covered employees whose contributions 41 to the fund commence thereafter, the effective date of their participation 42 in the system is as specified in the applicable joinder agreement. 43

22. "Effective date of vesting" means the date a member's rights to 44 benefits vest pursuant to section 38-844.01. 45

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23. "Eligible child" means an unmarried child of a deceased member 1 or retired member who meets one of the following qualifications: 2

(a) Is under eighteen years of age. 3 (b) Is at least eighteen years of age and under twenty-three years 4

of age only during any period that the child is a full-time student. 5 (c) Is under a disability that began before the child attained 6

twenty-three years of age and remains a dependent of the surviving spouse 7 or guardian. 8

24. "Eligible groups" means only the following who are regularly 9 assigned to hazardous duty: 10

(a) Municipal police officers who are certified peace officers. 11 (b) Municipal firefighters. 12 (c) Paid full-time firefighters employed directly by a fire 13

district organized pursuant to section 48-803 or 48-804 or a joint powers 14 authority pursuant to section 48-805.01 with three or more full-time 15 firefighters, but not including firefighters employed by a fire district 16 pursuant to a contract with a corporation. 17

(d) State highway patrol officers who are certified peace officers. 18 (e) State firefighters. 19 (f) County sheriffs and deputies who are certified peace officers. 20 (g) Game and fish wardens who are certified peace officers. 21 (h) Police officers who are certified peace officers and 22

firefighters of a nonprofit corporation operating a public airport 23 pursuant to sections 28-8423 and 28-8424. A police officer shall be 24 designated pursuant to section 28-8426 to aid and supplement state and 25 local law enforcement agencies and a firefighter's sole duty shall be to 26 perform firefighting services, including services required by federal 27 regulations. 28

(i) Police officers who are certified peace officers and who are 29 appointed by the Arizona board of regents GOVERNING BOARD OF A UNIVERSITY. 30

(j) Police officers who are certified peace officers and who are 31 appointed by a community college district governing board. 32

(k) State attorney general investigators who are certified peace 33 officers. 34

(l) County attorney investigators who are certified peace officers. 35 (m) Police officers who are certified peace officers and who are 36

employed by an Indian reservation police agency. 37 (n) Firefighters who are employed by an Indian reservation 38

firefighting agency. 39 (o) Department of liquor licenses and control investigators who are 40

certified peace officers. 41 (p) Arizona department of agriculture officers who are certified 42

peace officers. 43 (q) Arizona state parks board rangers and managers who are 44

certified peace officers. 45

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(r) County park rangers who are certified peace officers. 1 25. "Eligible retirement plan" means any of the following that 2

accepts a distributee's eligible rollover distribution: 3 (a) An individual retirement account described in section 408(a) of 4

the internal revenue code. 5 (b) An individual retirement annuity described in section 408(b) of 6

the internal revenue code. 7 (c) An annuity plan described in section 403(a) of the internal 8

revenue code. 9 (d) A qualified trust described in section 401(a) of the internal 10

revenue code. 11 (e) An annuity contract described in section 403(b) of the internal 12

revenue code. 13 (f) An eligible deferred compensation plan described in section 14

457(b) of the internal revenue code that is maintained by a state, a 15 political subdivision of a state or any agency or instrumentality of a 16 state or a political subdivision of a state and that agrees to separately 17 account for amounts transferred into the eligible deferred compensation 18 plan from this plan. 19

26. "Eligible rollover distribution" means a payment to a 20 distributee, but does not include any of the following: 21

(a) Any distribution that is one of a series of substantially equal 22 periodic payments made not less frequently than annually for the life or 23 life expectancy of the member or the joint lives or joint life 24 expectancies of the member and the member's beneficiary or for a specified 25 period of ten years or more. 26

(b) Any distribution to the extent the distribution is required 27 under section 401(a)(9) of the internal revenue code. 28

(c) The portion of any distribution that is not includable in gross 29 income. 30

(d) Any distribution made to satisfy the requirements of section 31 415 of the internal revenue code. 32

(e) Hardship distributions. 33 (f) Similar items designated by the commissioner of the United 34

States internal revenue service in revenue rulings, notices and other 35 guidance published in the internal revenue bulletin. 36

27. "Employee" means any person who is employed by a participating 37 employer and who is a member of an eligible group but does not include any 38 persons compensated on a contractual or fee basis. If an eligible group 39 requires certified peace officer status or firefighter certification and 40 at the option of the local board, employee may include a person who is 41 training to become a certified peace officer or firefighter. 42

28. "Employers" means: 43 (a) Cities contributing to the fire fighters' relief and pension 44

fund as provided in sections 9-951 through 9-971 or statutes amended 45

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thereby and antecedent thereto, as of June 30, 1968 on behalf of their 1 full-time paid firefighters. 2

(b) Cities contributing under the state police pension laws as 3 provided in sections 9-911 through 9-934 or statutes amended thereby and 4 antecedent thereto, as of June 30, 1968 on behalf of their municipal 5 policemen. 6

(c) The state highway patrol covered under the state highway patrol 7 retirement system. 8

(d) The state, or any political subdivision of this state, 9 including towns, cities, fire districts, joint powers authorities, 10 counties and nonprofit corporations operating public airports pursuant to 11 sections 28-8423 and 28-8424, that has elected to participate in the 12 system on behalf of an eligible group of public safety personnel pursuant 13 to a joinder agreement entered into after July 1, 1968. 14

(e) Indian tribes that have elected to participate in the system on 15 behalf of an eligible group of public safety personnel pursuant to a 16 joinder agreement entered into after July 1, 1968. 17

29. "Fund" means the public safety personnel retirement fund, which 18 is the fund established to receive and invest contributions accumulated 19 under the system and from which benefits are paid. 20

30. "Local board" means the retirement board of the employer, who 21 are the persons appointed to administer the system as it applies to their 22 members in the system. 23

31. "Member": 24 (a) Means any full-time employee who meets all of the following 25

qualifications: 26 (i) Who is either a paid municipal police officer, a paid 27

firefighter, a law enforcement officer who is employed by this state 28 including the director thereof, a state firefighter who is primarily 29 assigned to firefighting duties, a firefighter or police officer of a 30 nonprofit corporation operating a public airport pursuant to sections 31 28-8423 and 28-8424, all ranks designated by the Arizona law enforcement 32 merit system council, a state attorney general investigator who is a 33 certified peace officer, a county attorney investigator who is a certified 34 peace officer, a department of liquor licenses and control investigator 35 who is a certified peace officer, an Arizona department of agriculture 36 officer who is a certified peace officer, an Arizona state parks board 37 ranger or manager who is a certified peace officer, a county park ranger 38 who is a certified peace officer, a person who is a certified peace 39 officer and who is employed by an Indian reservation police agency, a 40 firefighter who is employed by an Indian reservation firefighting agency 41 or an employee included in a group designated as eligible employees under 42 a joinder agreement entered into by their employer after July 1, 1968 and 43 who is or was regularly assigned to hazardous duty or, beginning 44 retroactively to January 1, 2009, who is a police chief or a fire chief. 45

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(ii) Who, on or after the employee's effective date of 1 participation, is receiving compensation for personal services rendered to 2 an employer or would be receiving compensation except for an authorized 3 leave of absence. 4

(iii) Whose customary employment is at least forty hours per week 5 or, for those employees who customarily work fluctuating workweeks, whose 6 customary employment averages at least forty hours per week. 7

(iv) Who is engaged to work for more than six months in a calendar 8 year. 9

(v) Who, if economic conditions exist, is required to take furlough 10 days or reduce the hours of the employee's normal workweek below forty 11 hours but not less than thirty hours per pay cycle, and maintain the 12 employee's active member status within the system as long as the hour 13 change does not extend beyond twelve consecutive months. 14

(vi) Who has not attained age sixty-five before the employee's 15 effective date of participation or who was over age sixty-five with 16 twenty-five years or more of service prior to the employee's effective 17 date of participation. 18

(b) Does not include an employee who is hired on or after July 1, 19 2017, who makes the irrevocable election to participate solely in the 20 public safety personnel defined contribution retirement plan established 21 pursuant to article 4.1 of this chapter and who was not an active, an 22 inactive or a retired member of the system or a member of the system with 23 a disability on June 30, 2017. 24

32. "Normal retirement date" means: 25 (a) For an employee who becomes a member of the system before 26

January 1, 2012, the first day of the calendar month immediately following 27 the employee's completion of twenty years of service or the employee's 28 sixty-second birthday and the employee's completion of fifteen years of 29 service. 30

(b) For an employee who becomes a member of the system on or after 31 January 1, 2012 and before July 1, 2017, the first day of the calendar 32 month immediately following the employee's completion of either 33 twenty-five years of service or fifteen years of credited service if the 34 employee is at least fifty-two and one-half years of age. 35

(c) For an employee who becomes a member of the system on or after 36 July 1, 2017, the first day of the calendar month immediately following 37 the employee's completion of fifteen years of credited service if the 38 employee is at least fifty-five years of age. 39

33. "Notice of receipt" means a written document that is issued by 40 the system to a participant and alternate payee and that states that the 41 system has received a domestic relations order and a request for a 42 determination that the domestic relations order is a plan approved 43 domestic relations order. 44

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34. "Ordinary disability" means a physical condition that the local 1 board determines will prevent an employee totally and permanently from 2 performing a reasonable range of duties within the employee's department 3 or a mental condition that the local board determines will prevent an 4 employee totally and permanently from engaging in any substantial gainful 5 activity. 6

35. "Participant" means a member who is subject to a domestic 7 relations order. 8

36. "Participant's portion" means benefits that are payable to a 9 participant pursuant to a plan approved domestic relations order. 10

37. "Pension" means a series of monthly amounts that are payable to 11 a person who is entitled to receive benefits under the plan but does not 12 include an annuity that is payable pursuant to section 38-846.01. 13

38. "Personal representative" means the personal representative of 14 a deceased alternate payee. 15

39. "Physician" means a physician who is licensed pursuant to title 16 32, chapter 13 or 17. 17

40. "Plan approved domestic relations order" means a domestic 18 relations order that the system approves as meeting all the requirements 19 for a plan approved domestic relations order as otherwise prescribed in 20 this article. 21

41. "Plan year" or "fiscal year" means the period beginning on July 22 1 of any year and ending on June 30 of the next succeeding year. 23

42. "Regularly assigned to hazardous duty" means regularly assigned 24 to duties of the type normally expected of municipal police officers, 25 municipal or state firefighters, eligible fire district firefighters, 26 state highway patrol officers, county sheriffs and deputies, fish and game 27 wardens, firefighters and police officers of a nonprofit corporation 28 operating a public airport pursuant to sections 28-8423 and 28-8424, 29 police officers who are appointed by the Arizona board of regents 30 GOVERNING BOARD OF A UNIVERSITY or a community college district governing 31 board, state attorney general investigators who are certified peace 32 officers, county attorney investigators who are certified peace officers, 33 department of liquor licenses and control investigators who are certified 34 peace officers, Arizona department of agriculture officers who are 35 certified peace officers, Arizona state parks board rangers and managers 36 who are certified peace officers, county park rangers who are certified 37 peace officers, police officers who are certified peace officers and who 38 are employed by an Indian reservation police agency or firefighters who 39 are employed by an Indian reservation firefighting agency. Those 40 individuals who are assigned solely to support duties such as secretaries, 41 stenographers, clerical personnel, clerks, cooks, maintenance personnel, 42 mechanics and dispatchers are not assigned to hazardous duty regardless of 43 their position classification title. Since the normal duties of those 44 jobs described in this paragraph are constantly changing, questions as to 45

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whether a person is or was previously regularly assigned to hazardous duty 1 shall be resolved by the local board on a case-by-case basis. Resolutions 2 by local boards are subject to rehearing and appeal. 3

43. "Retirement" or "retired" means termination of employment after 4 a member has fulfilled all requirements for a pension, for an employee who 5 becomes a member of the system on or after January 1, 2012 and before July 6 1, 2017, attains the age and service requirements for a normal retirement 7 date or for an employee who becomes a member of the system on or after 8 July 1, 2017 attains the age and credited service requirements for a 9 normal retirement date. Retirement shall be considered as commencing on 10 the first day of the month immediately following a member's last day of 11 employment or authorized leave of absence, if later. 12

44. "Segregated funds" means the amount of benefits that would 13 currently be payable to an alternate payee pursuant to a domestic 14 relations order under review by the system, or a domestic relations order 15 submitted to the system that failed to qualify as a plan approved domestic 16 relations order, if the domestic relations order were determined to be a 17 plan approved domestic relations order. 18

45. "Service" means the last period of continuous employment of an 19 employee by the employers before the employee's retirement, except that if 20 such period includes employment during which the employee would not have 21 qualified as a member had the system then been effective, such as 22 employment as a volunteer firefighter, then only twenty-five percent of 23 such noncovered employment shall be considered as service. Any absence 24 that is authorized by an employer shall not be considered as interrupting 25 continuity of employment if the employee returns within the period of 26 authorized absence. Transfers between employers also shall not be 27 considered as interrupting continuity of employment. Any period during 28 which a member is receiving sick leave payments or a temporary disability 29 pension shall be considered as service. Notwithstanding any other 30 provision of this paragraph, any period during which a person was employed 31 as a full-time paid firefighter for a corporation that contracted with an 32 employer to provide firefighting services on behalf of the employer shall 33 be considered as service if the employer has elected at its option to 34 treat part or all of the period the firefighter worked for the company as 35 service in its applicable joinder agreement. Any reference in this system 36 to the number of years of service of an employee shall be deemed to 37 include fractional portions of a year. 38

46. "State" means the state of Arizona, including any department, 39 office, board, commission, agency or other instrumentality of the state. 40

47. "System" means the public safety personnel retirement system 41 established by this article. 42

48. "Temporary disability" means a physical or mental condition 43 that the local board finds totally and temporarily prevents an employee 44 from performing a reasonable range of duties within the employee's 45

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department and that was incurred in the performance of the employee's 1 duty. 2


41-191.09. Attorney general legal services cost allocation 5 fund; contributions; annual report; exemptions 6

A. The attorney general legal services cost allocation fund is 7 established for the purpose of reimbursing the department of law for 8 general agency counsel. Monies in the fund are subject to legislative 9 appropriation. The attorney general shall administer the fund. 10

B. Except as provided in subsection E of this section, each state 11 agency or department may be charged for general agency counsel provided by 12 the department of law. The amount, if any, shall be specified annually in 13 the general appropriations act. 14

C. On or before September 1 of each year, each state agency or 15 department shall submit a report to the joint legislative budget committee 16 that identifies the funding sources for the monies to be deposited 17 pursuant to this section. The funding sources may not include the state 18 general fund, federal funds or other funds that are legally restricted 19 from making such payments. 20

D. A claim for the legal services cost allocation payment shall be 21 submitted according to the fund source to the department of administration 22 for deposit in the attorney general legal services cost allocation fund. 23

E. The following agencies are exempt from this section: 24 1. The department of water resources. 25 2. The residential utility consumer office. 26 3. The industrial commission. 27 4. The universities and the Arizona board of regents GOVERNING 28

BOARD OF EACH UNIVERSITY. 29 5. The auditor general. 30 6. The corporation commission. 31 7. The office of the governor. 32 8. The department of law. 33 9. The house of representatives. 34 10. The senate. 35 11. The joint legislative budget committee. 36 12. The Arizona state library, archives and public records. 37 13. The legislative council. 38 14. The department of administration risk management fund. 39 15. The department of transportation. 40 16. The Arizona game and fish department. 41 17. The department of economic security. 42 18. The Arizona health care cost containment system. 43 19. The superior court. 44 20. The court of appeals. 45

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21. The supreme court. 1 22. The Arizona department of agriculture and councils that receive 2

administrative and budgetary services from the Arizona department of 3 agriculture. 4

23. All self-supporting regulatory agencies as determined pursuant 5 to section 35-143.01. 6

24. The Arizona commerce authority. 7 25. The department of child safety. 8 F. Monies in the attorney general legal services cost allocation 9

fund are exempt from lapsing to the state general fund at the end of each 10 fiscal year. 11


41-192. Powers and duties of attorney general; restrictions 14 on state agencies as to legal counsel; exceptions; 15 compromise and settlement monies 16

A. The attorney general shall have charge of and direct the 17 department of law and shall serve as chief legal officer of the state. 18 The attorney general shall: 19

1. Be the legal advisor of the departments of this state and render 20 such legal services as the departments require. 21

2. Establish administrative and operational policies and procedures 22 within his THE department OF LAW. 23

3. Approve long-range plans for developing departmental programs 24 therein, and coordinate the legal services required by other departments 25 of this state or other state agencies. 26

4. Represent school districts and governing boards of school 27 districts in any lawsuit involving a conflict of interest with other 28 county offices. 29

5. Represent political subdivisions, school districts and 30 municipalities in suits to enforce state or federal statutes pertaining to 31 antitrust, restraint of trade or price-fixing activities or conspiracies, 32 if the attorney general notifies in writing the political subdivisions, 33 school districts and municipalities of the attorney general's intention to 34 bring any such action on its THEIR behalf. At any time within thirty days 35 after the notification, the political subdivisions, school districts and 36 municipalities A POLITICAL SUBDIVISION, SCHOOL DISTRICT OR MUNICIPALITY, 37 by formal resolution of its governing body, may withdraw the authority of 38 the attorney general to bring the intended action on its behalf. 39

6. In any action brought by the attorney general pursuant to state 40 or federal statutes pertaining to antitrust, restraint of trade, or 41 price-fixing activities or conspiracies for the recovery of damages by 42 this state or any of its political subdivisions, school districts or 43 municipalities, in addition to the attorney general's other powers and 44 authority, the attorney general on behalf of this state may enter into 45

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contracts relating to the investigation and prosecution of such AN action 1 with any other party plaintiff who has brought a similar action for the 2 recovery of damages and with whom the attorney general finds it 3 advantageous to act jointly or to share common expenses or to cooperate in 4 any manner relative to such action. In any such action, notwithstanding 5 any other laws to the contrary, the attorney general may undertake, among 6 other things, to render legal services as special counsel or to obtain the 7 legal services of special counsel from any department or agency of the 8 United States, of this state or any other state or any department or 9 agency thereof or any county, city, public corporation or public district 10 in this state or in any other state that has brought or intends to bring a 11 similar action for the recovery of damages or their ITS duly authorized 12 legal representatives in such AN action. 13

7. Organize the civil rights division within the department of law 14 and administer such THE division pursuant to the powers and duties 15 provided in chapter 9 of this title. 16

8. Compile, publish and distribute to all state agencies, 17 departments, boards, commissions and councils, and to other persons and 18 government entities on request, at least every ten years, the Arizona 19 agency handbook that sets forth and explains the major state laws that 20 govern state agencies, including information on the laws relating to 21 bribery, conflicts of interest, contracting with the government, 22 disclosure of public information, discrimination, nepotism, financial 23 disclosure, gifts and extra compensation, incompatible employment, 24 political activity by employees, public access and misuse of public 25 resources for personal gain. A supplement to the handbook reflecting 26 revisions to the information contained in the handbook shall be compiled 27 and distributed by the attorney general as deemed necessary. 28

B. Except as otherwise provided by law, the attorney general may: 29 1. Organize the department into such bureaus, subdivisions or units 30

as he THE ATTORNEY GENERAL deems most efficient and economical, and 31 consolidate or abolish them. 32

2. Adopt rules for the orderly conduct of the business of the 33 department. 34

3. Subject to chapter 4, article 4 of this title, employ and assign 35 assistant attorneys general and other employees necessary to perform the 36 functions of the department. 37

4. Compromise or settle any action or claim by or against this 38 state or any department, board or agency of this state. If the compromise 39 or settlement involves a particular department, board or agency of this 40 state, the compromise or settlement shall be first approved by the 41 department, board or agency. If no department or agency is named or 42 otherwise materially involved, the approval of the governor shall be first 43 obtained. 44

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5. Charge reasonable fees for distributing official publications, 1 including attorney general legal opinions and the Arizona agency handbook. 2 The fees received shall be transmitted to the state treasurer for deposit 3 in the state general fund. 4

C. The powers and duties of a bureau, subdivision or unit shall be 5 limited to those assigned by law to the department. 6

D. Notwithstanding any law to the contrary, except as provided in 7 subsections E and F of this section, no state agency other than the 8 attorney general shall employ legal counsel or make an expenditure or 9 incur an indebtedness for legal services, but the following are exempt 10 from this section: 11

1. The director of water resources. 12 2. The residential utility consumer office. 13 3. The industrial commission. 14 4. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY. 15 5. The auditor general. 16 6. The corporation commissioners and the corporation commission 17

other than the securities division. 18 7. The office of the governor. 19 8. The constitutional defense council. 20 9. The office of the state treasurer. 21 10. The Arizona commerce authority. 22 E. If the attorney general determines that he is disqualified from 23

providing judicial or quasi-judicial legal representation or legal 24 services on behalf of any state agency in relation to any matter, the 25 attorney general shall give written notification to the state agency 26 affected. If the agency has received written notification from the 27 attorney general that the attorney general is disqualified from providing 28 judicial or quasi-judicial legal representation or legal services in 29 relation to any particular matter, the state agency is authorized to make 30 expenditures and incur indebtedness to employ attorneys to provide the 31 representation or services. 32

F. If the attorney general and the director of the department of 33 agriculture cannot agree on the final disposition of a pesticide complaint 34 under section 3-368, if the attorney general and the director determine 35 that a conflict of interest exists as to any matter or if the attorney 36 general and the director determine that the attorney general does not have 37 the expertise or attorneys available to handle a matter, the director is 38 authorized to make expenditures and incur indebtedness to employ attorneys 39 to provide representation or services to the department with regard to 40 that matter. 41

G. Any department or agency of this state authorized by law to 42 maintain a legal division or incur expenses for legal services from funds 43 derived from sources other than the general revenue of the state, or from 44 any special or trust fund, shall pay from such source of revenue or 45

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special or trust fund into the general fund of the state, to the extent 1 such funds are available and upon ON a reimbursable basis for warrants 2 drawn, the amount actually expended by the department of law within 3 legislative appropriations for such legal division or legal services. 4

H. Appropriations made pursuant to subsection G of this section 5 shall not be subject to lapsing provisions otherwise provided by law. 6 Services for departments or agencies to which this subsection and 7 subsection F of this section are applicable shall be performed by special 8 or regular assistants to the attorney general. 9

I. Notwithstanding section 35-148, monies received by the attorney 10 general from charges to state agencies and political subdivisions for 11 legal services relating to interagency service agreements shall be 12 deposited, pursuant to sections 35-146 and 35-147, in an attorney general 13 agency services fund. Monies in the fund are subject to legislative 14 appropriation and are exempt from the provisions of section 35-190 15 relating to lapsing of appropriations. 16

J. Unless otherwise provided by law, monies received for and 17 belonging to the state and resulting from compromises and settlements 18 entered into pursuant to subsection B of this section, excluding 19 restitution and reimbursement to state agencies for costs or attorney 20 fees, shall be deposited into the state treasury and credited to the state 21 general fund pursuant to section 35-142. Monies received for and 22 belonging to the state and resulting from a compromise or settlement are 23 not considered custodial, private or quasi-private monies unless 24 specifically provided by law. On or before January 15, April 15, July 15 25 and October 15, the attorney general shall file with the governor, with 26 copies to the director of the department of administration, the president 27 of the senate, the speaker of the house of representatives, the secretary 28 of state and the staff director of the joint legislative budget committee, 29 a full and complete account of the deposits into the state treasury made 30 pursuant to this subsection in the previous calendar quarter. For the 31 purposes of this subsection, "restitution" means monies intended to 32 compensate a specific, identifiable person, including this state, for 33 economic loss. 34


41-612. Post-9/11 veteran education relief fund; advisory 37 committee; committee termination; definitions 38

A. The post-9/11 veteran education relief fund is established 39 consisting of private donations, grants, bequests and any other monies. 40 The department shall administer the fund. Monies in the fund are 41 continuously appropriated to the department solely for the purposes 42 prescribed in this section. On notice from the director, the state 43 treasurer shall invest and divest monies in the fund as provided by 44

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section 35-313, and monies earned from investment shall be credited to the 1 fund. 2

B. The post-9/11 veteran education relief advisory committee is 3 established consisting of the following members: 4

1. The director or the director's designee. 5 2. One member who is JOINTLY recommended by the Arizona board of 6

regents GOVERNING BOARDS OF THE UNIVERSITIES. 7 3. One member who holds a certificate from the state board of 8

education and who has teaching experience that includes high school 9 education or one public member who has teaching experience at a 10 postsecondary institution. 11

4. One member who is an active duty or reserve member of the 12 uniformed services of the United States or national guard or who has 13 retired from active duty or reserve or national guard status and who has 14 served as a command career counselor or in a regular assignment that 15 included oversight of training or education programs. 16

5. Two public members who have professional experience in human 17 resource management. 18

6. One member from an education profession who is employed by a 19 public or private school entity. 20

7. Two members who are military members or family members of 21 military members. 22

C. Except for the director, the governor shall appoint the members 23 based on recommendations by the director, the adjutant general, the 24 Arizona board of regents GOVERNING BOARDS OF THE UNIVERSITIES and THE 25 commanders of military bases or reserve centers in this state. Appointed 26 members shall serve for a term of two years, that WHICH may be extended or 27 renewed by the governor at the recommendation of the director. The 28 advisory committee shall elect a chairperson from among the appointed 29 members. 30

D. The advisory committee shall: 31 1. Establish criteria for the use of monies in the fund. 32 2. Establish and revise as necessary the application process for 33

financial assistance. 34 3. Review and evaluate applications. 35 4. Make other recommendations as necessary. 36 E. The advisory committee may meet in executive session, with 37

notice pursuant to section 38-431.02, to review and evaluate applications. 38 Applications for financial assistance and all committee considerations and 39 evaluations of the applications are confidential. 40

F. The monies in the fund shall be used to provide financial 41 assistance pursuant to this subsection. A qualifying military veteran may 42 apply for financial assistance for the cost of tuition at a PUBLIC 43 university that is under the jurisdiction of the Arizona board of regents 44 and IN THIS STATE that is an Arizona veteran supportive campus as defined 45

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in section 41-609. The assistance shall be based on financial need up to 1 the amount of tuition that the qualifying military veteran was charged in 2 the last year that the veteran received benefits under the post-9/11 3 veterans educational assistance act of 2008 (P.L. 110-252; 122 Stat. 2357; 4 38 United States Code sections 3301 through 3325). The advisory committee 5 shall make tuition assistance payments directly to the university. 6

G. The advisory committee shall adopt rules to carry out the 7 purposes of this section that include both the following: 8

1. A mechanism to publicize the availability of financial 9 assistance to potential qualifying military veterans. 10

2. A procedure to ensure that financial assistance awards made 11 before a military veteran withdraws from a university due to military 12 activation remain available on reentry to a university. 13

H. The committee established by this section ends on July 1, 2024 14 pursuant to section 41-3103. 15

I. For the purposes of this section: 16 1. "Department" means the department of veterans' services. 17 2. "Director" means the director of the department of veterans' 18

services. 19 3. "Military member" includes an active duty, reserve or retired 20

member of the uniformed services of the United States or national guard, a 21 veteran who is a member of a veterans' organization or a veteran who has a 22 service-connected disability. 23

4. "Qualifying military veteran" means a person who meets all of 24 the following requirements: 25

(a) Is eligible for in-state tuition status pursuant to section 26 15-1802, subsection G. 27

(b) Is attending a PUBLIC university that is under the jurisdiction 28 of the Arizona board of regents and IN THIS STATE that is an Arizona 29 veteran supportive campus as defined in section 41-609. 30

(c) Maintains a grade point average of at least 2.2 on a 4.0 scale, 31 or the equivalent. 32

(d) Has qualified for benefits under the post-9/11 veterans 33 educational assistance act of 2008 (P.L. 110-252; 122 Stat. 2357; 38 34 United States Code sections 3301 through 3325). 35

(e) Has not transferred any portion of the person's benefits under 36 the program to a dependent. 37

(f) Is within one year of completion of the person's first 38 baccalaureate degree as a full-time student or within two years of 39 completion of the person's first baccalaureate degree as a part-time 40 student. 41

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41-706. State employee living donor leave; definitions 3 A. An employee is entitled to a leave of absence for the time 4

specified for the following purposes: 5 1. Five work days to serve as a bone marrow donor for a bone marrow 6

transplant if the employee provides the employee's employer with written 7 verification that the employee is to serve as a bone marrow donor. 8

2. Thirty work days to serve as an organ donor for a human organ 9 transplant if the employee provides the employee's employer with written 10 verification that the employee is to serve as an organ donor. 11

B. An employee who is granted a leave of absence pursuant to this 12 section is entitled to receive base pay without interruption during the 13 leave of absence. For the purpose of determining seniority, pay or pay 14 advancement and performance awards and for the receipt of any benefit that 15 may be affected by a leave of absence, the service of the employee is 16 considered uninterrupted by the leave of absence. 17

C. The employer shall not penalize an employee for requesting or 18 obtaining a leave of absence pursuant to this section. 19

D. For the purposes of this section: 20 1. "Bone marrow" means the soft material that fills human bone 21

cavities. 22 2. "Bone marrow transplant" means the medical procedure by which 23

transfer of bone marrow is made from the body of a person to the body of 24 another person. 25

3. "Employee" means a person employed in a position in any office, 26 board, commission or department in state government, a person employed by 27 the judiciary or a person employed by a PUBLIC university under the 28 jurisdiction of the Arizona board of regents IN THIS STATE or a community 29 college district. 30

4. "Human organ transplant" means the medical procedure by which 31 transfer of an organ or part of an organ is made from the body of a person 32 to the body of another person. 33

5. "Organ" means human organs or parts of an organ that are capable 34 of being transferred from the body of a person to the body of another 35 person. 36


41-724. Exemptions 39 A. The Arizona board of regents GOVERNING BOARDS OF THE 40

UNIVERSITIES, the Arizona commerce authority and the legislative and 41 judicial branches of state government shall ARE not be subject to the 42 provisions of this article except as prescribed by law. 43

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B. The Arizona board of regents GOVERNING BOARDS OF THE 1 UNIVERSITIES and the judicial branch of state government shall be ARE 2 subject to the provisions of sections 35-112 and 35-113. 3


41-741. Definitions 6 In this article and articles 5 and 6 of this chapter, unless the 7

context otherwise requires: 8 1. "Appointing authority" means the person or group of persons 9

authorized by law or delegated authority to make appointments to fill 10 positions. 11

2. "At will" means an employment relationship where IN WHICH either 12 party to the relationship may sever the relationship at any time for any 13 reason other than an unlawful reason. 14

3. "Break in service" means a separation from state employment, 15 regardless of the reason for separation. 16

4. "Change in assignment" means movement of an employee to a 17 different position in the same state agency or another state agency. 18

5. "Covered employee" means an employee who: 19 (a) Before September 29, 2012, is in the state service, is not 20

uncovered pursuant to section 41-742, subsection A and has remained in 21 covered status without a break in service since that date. 22

(b) Before September 29, 2012, is in the state service, is employed 23 as a correctional officer I, correctional officer II, correctional officer 24 III or community corrections officer and has remained in covered status 25 without a break in service since that date. 26

(c) Before September 29, 2012, is in the state service, is a full 27 authority peace officer as certified by the Arizona peace officer 28 standards and training board and has remained in that status without a 29 break in service since that date. 30

(d) On or after September 29, 2012, is a correctional officer I, 31 correctional officer II, correctional officer III or community corrections 32 officer and is appointed to a position in the covered service, but does 33 not include a position in any other class in the correctional officer 34 class series or the community correctional officer class series or in any 35 other correctional class series. 36

(e) On or after September 29, 2012, is a full authority peace 37 officer as certified by the Arizona peace officer standards and training 38 board and is appointed to a position that requires such a certification in 39 the covered service. 40

6. "Covered service" means that employment status conferring rights 41 of appeal as prescribed in sections 41-782 and 41-783 or section 42 41-1830.16, as applicable. 43

7. "Director" means the director of the department of 44 administration, or the director's designee, who is responsible for 45

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administering the state personnel system pursuant to applicable state and 1 federal laws. 2

8. "Employee" means all officers and employees of this state, 3 whether in covered service or uncovered service, unless otherwise 4 prescribed. 5

9. "Full authority peace officer" means a peace officer whose 6 authority to enforce the laws of this state is not limited by the rules 7 adopted by the Arizona peace officer standards and training board. 8

10. "Original probationary period" means the specified period 9 following initial appointment to covered service. 10

11. "Probationary period" means a working test period of employment 11 in a covered service position for evaluation of the employee's work. 12

12. "Promotional probation" means the specified period of 13 employment following promotion of a permanent status employee to another 14 covered service position that has a higher pay grade. 15

13. "Rules" means rules adopted by the department of 16 administration, human resources division. 17

14. "Significant procurement role": 18 (a) Means any role that includes any of the following duties: 19 (i) Participating in the development of a procurement as defined in 20

section 41-2503. 21 (ii) Participating in the development of an evaluation tool. 22 (iii) Approving a procurement as defined in section 41-2503 or an 23

evaluation tool. 24 (iv) Soliciting quotes greater than ten thousand dollars for the 25

provision of materials, services or construction. 26 (v) Serving as a technical advisor or an evaluator who evaluates a 27

procurement as defined in section 41-2503. 28 (vi) Recommending or selecting a vendor that will provide 29

materials, services or construction to this state. 30 (vii) Serving as a decision maker DECISION-MAKER or designee on a 31

protest or an appeal by a party regarding an agency procurement selection 32 or decision. 33

(b) Does not include making decisions on developing specifications 34 and the scope of work for a procurement as defined in section 41-2503 if 35 the decision is based on the application of commonly accepted industry 36 standards or known published standards of the agency as applied to the 37 project, services, goods or materials. 38

15. "State agency" means a department, board, office, authority, 39 commission or other governmental budget unit of this state and includes an 40 agency assigned to a department for administrative purposes. State agency 41 does not include the legislative and judicial branches, the Arizona board 42 of regents GOVERNING BOARDS OF THE UNIVERSITIES, state universities, the 43 Arizona state schools for the deaf and the blind, the department of public 44

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safety, the Arizona peace officer standards and training board, the cotton 1 research and protection council or public corporations. 2

16. "State personnel board" means the board established by 3 section 41-781. 4

17. "State personnel system" means all state agencies and employees 5 of those agencies that are not exempted by this article. 6

18. "State service" means all offices and positions of employment 7 in state government that, before September 29, 2012, were subject to the 8 provisions of articles 5 and 6 of this chapter that were in effect before 9 September 29, 2012. 10

19. "Supervisor" means a state employee who has one or more other 11 state employees reporting directly to the person and, for those state 12 employees, typically has the authority to: 13

(a) Approve sick or annual leave. 14 (b) Recommend hiring, discipline or dismissal. 15 (c) Assign or schedule daily work. 16 (d) Complete a performance evaluation. 17 20. "Uncovered employee" means an employee in uncovered service. 18 21. "Uncovered service" means employment at will and includes all 19

state employees except those in covered service. 20 Sec. 158. Section 41-742, Arizona Revised Statutes, is amended to 21

read: 22 41-742. State personnel system; covered and uncovered 23

employees; application; exemptions 24 A. Beginning September 29, 2012, unless otherwise prescribed in 25

this article: 26 1. All new hires are at will uncovered employees. 27 2. Any employee who meets any of the following criteria is an at 28

will uncovered employee: 29 (a) Is employed as an attorney in a position assigned to the 30

attorney salary schedule. 31 (b) IS a supervisor. 32 (c) Is at a pay grade of nineteen or above or, if a successor 33

compensation system is established, in an equivalent pay range as 34 determined by the director. 35

(d) Is in a position assigned to the information technology salary 36 schedule, in a position assigned to an information technology 37 classification or, if a successor compensation system is established, in 38 an equivalent pay range as determined by the director. 39

3. Any covered employee who voluntarily accepts a change in 40 assignment to a position in the uncovered service, regardless of whether 41 the voluntary change in assignment is a promotion, demotion or lateral 42 transfer, is an at will uncovered employee on the start date of the 43 voluntary change in assignment. 44

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4. A covered employee may voluntarily elect to become an at will 1 uncovered employee without a change in assignment on approval by the state 2 agency head and the director. If approved, the change from covered to 3 uncovered status is immediate. 4

5. Once a covered employee becomes an at will uncovered employee, 5 the change is irrevocable. 6

B. Except as provided in subsection F of this section, the purpose 7 of this article is for all state agencies in the state personnel system to 8 treat employees pursuant to the following principles: 9

1. Recruiting, selecting and advancing employees on the basis of 10 the employee's relative ability, knowledge and skills after open 11 competition. 12

2. Providing compensation based on merit, performance, job value 13 and competitiveness within applicable labor markets. 14

3. Training employees if the training will result in better 15 organizational and individual performance. 16

4. Retaining employees on the basis of the adequacy of their 17 performance, correct CORRECTING inadequate performance where possible and 18 appropriate and separate SEPARATING employees whose performance is 19 inadequate. 20

5. Managing applicants and employees in all aspects of personnel 21 administration without regard to political affiliation, race, color, 22 national origin, sex, age, disability or religious creed and with proper 23 regard for their privacy and constitutional rights as citizens. 24

6. Ensuring that employees are protected against coercion for 25 partisan political purposes and are prohibited from using their official 26 authority for the purpose of interfering with or affecting the result of 27 an election or nomination for office. 28

C. The director shall establish and administer the state personnel 29 system, including: 30

1. A classification system and job classes and associated 31 knowledge, skills and abilities for those classes. 32

2. A centralized job announcement system to streamline statewide 33 recruiting for applicants. 34

3. A centralized employment system to be used by all successful 35 applicants, including a common application form to be used by all state 36 agencies. 37

4. A compensation system, including assigning pay ranges for all 38 job classes and special pay plans for certain classes or groups of 39 employees considering such factors as occupational patterns, economic 40 conditions and pay plans common to government, business and industry. 41

5. A statewide training program. 42 6. A statewide performance management system. 43 7. An audit function to review state agencies' processes and 44

compliance with applicable statutes, personnel rules and policies. 45

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8. An integrated system to process personnel, payroll and benefits 1 transactions and serve as the system of record for state employees. 2

D. This article and articles 5 and 6 OF THIS CHAPTER do not apply 3 to: 4

1. An elected state officer. An elected state officer means only 5 elected officials and does not include the employees of elected state 6 officers unless expressly provided. 7

2. Members of boards and commissions who are appointed by the 8 legislature or the governor, board members appointed pursuant to section 9 41-619.52 unless otherwise prescribed by law, employees of the Arizona 10 legislative council, employees appointed or employed by the legislature, 11 any legislative agency or either house of the legislature and employees of 12 the supreme court and the court of appeals. 13

3. The Arizona board of regents GOVERNING BOARDS OF THE 14 UNIVERSITIES, officers or employees of state universities and personnel of 15 the Arizona state schools for the deaf and the blind. 16

4. Patients or inmates employed in state institutions. 17 5. Officers and enlisted personnel of the national guard of Arizona 18

and employees of the department of emergency and military affairs who 19 occupy Arizona national guard positions identified as mobilization assets. 20

6. The cotton research and protection council. 21 7. The department of public safety. 22 8. The Arizona peace officer standards and training board. 23 E. Unless otherwise prescribed in this article, subsection A, 24

paragraphs 1, 2 and 3 of this section do not apply to either an initial 25 appointment to or changes in assignment to: 26

1. An employee of any state agency who is a full authority peace 27 officer as certified by the Arizona peace officer standards and training 28 board. 29

2. An employee of the state department of corrections who is 30 employed as a correctional officer I, correctional officer II, 31 correctional officer III, community corrections officer or, if a successor 32 classification system is established, in an equivalent job class as 33 determined by the director. 34

F. Subsection B, paragraph 1 of this section, relating to open 35 competition and subsection B, paragraph 4 of this section and subsection 36 B, paragraph 5 of this section, relating to political affiliation, do not 37 apply to: 38

1. Employees of the governor's office. 39 2. Employees of offices of elected officials who either: 40 (a) Report directly to the elected official. 41 (b) Head a primary component or report directly to the head of a 42

primary component of the office of the elected official. 43 (c) As a primary duty, determine or publicly advocate substantive 44

program policy for the office of the elected official. 45

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3. The state agency head and each deputy director, or equivalent, 1 of each state agency and employees of the state agency who report directly 2 to either the state agency head or deputy director. 3

4. Each assistant director, or equivalent, of each state agency and 4 employees in the state agency who report directly to an assistant 5 director. 6

5. Attorneys in the office of the attorney general. 7 6. Employees in investment related positions in the state 8

retirement system or plans established by title 38, chapter 5, article 2, 9 3, 4 or 6. 10

G. This article and articles 5 and 6 of this chapter do not confer 11 any rights in excess of, or in addition to, those previously authorized to 12 any state employee. 13

H. This article does not create or confer any contractual 14 employment right for any employee and, unless otherwise provided by law, 15 state agencies are prohibited from executing employment contracts with any 16 state employee. 17

I. Any communications, including policy manuals, employee 18 handbooks, job offers and performance appraisals and other communications 19 as determined by the director, whether in writing or oral, that conflict 20 with article 1, 5 or 6 of this chapter or this article are void and do not 21 alter or supersede article 1, 5 or 6 of this chapter or this article. 22


41-751. Annual report and recommendations 25 A. The director shall prepare a report on state personnel and the 26

operation of the state personnel system. 27 B. The report shall include: 28 1. Information concerning all state employees, including employees 29

of all executive, legislative and judicial branch agencies. All state 30 agencies shall provide any information requested by the director to 31 prepare the annual report. 32

2. Information concerning turnover, including the number of 33 employees separating from state employment and the reasons for separation. 34

3. Information concerning the compensation during the preceding 35 year and the coming year of state employees and the compensation of other 36 public employees and private employees. 37

4. An advisory recommendation on state employees' salaries. In 38 establishing the recommendation, the director shall consider the relative 39 levels of duties and responsibilities of the various classes of positions, 40 rates paid for comparable positions elsewhere and other relevant factors. 41 Salary recommendations are not required for elected officials. The 42 director shall make advisory salary recommendations for specific positions 43 in the governor's office, the legislature and the courts if requested by 44 the respective administrative heads of these units of state government. 45

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5. The overtime pay of all state agencies. 1 6. Other information as determined by the director. 2 C. The annual report and recommendations shall be presented to the 3

governor and the legislature on or before September 1 of each year. The 4 director shall provide a copy of the report to the secretary of state. 5

D. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY, 6 the department of public safety, the judicial department and the Arizona 7 state schools for the deaf and the blind shall each prepare and submit an 8 annual report on their personnel as prescribed in this section. The 9 report shall include: 10

1. Information concerning the number of employees affected by and 11 reasons for turnover of their employees. 12

2. Information concerning the compensation during the preceding 13 year and the coming year of their employees and the compensation of other 14 public employees and private employees. 15

3. An advisory recommendation on the salary plan and adjustments 16 for their employees. In establishing the salary plan, they shall consider 17 the relative levels of duties and responsibilities of the various classes 18 of positions, rates paid for comparable positions elsewhere and other 19 relevant factors. 20

4. The overtime pay for their employees. 21 Sec. 160. Section 41-782, Arizona Revised Statutes, is amended to 22

read: 23 41-782. Powers and duties of the state personnel board 24 A. Except as provided by section 41-1830.16, the state personnel 25

board shall hear and review appeals as provided in this article relating 26 to dismissal of a covered employee from covered service, suspension for 27 more than eighty working hours or involuntary demotion resulting from 28 disciplinary action as defined in the personnel rules for an employee in 29 covered service. 30

B. The state personnel board shall hear and review complaints as 31 provided in title 38, chapter 3, article 9, relating to any personnel 32 action taken against an employee or former employee of this state, except 33 an employee or former employee of a state university or the board of 34 regents GOVERNING BOARD OF A UNIVERSITY, which the employee or former 35 employee believes was taken in reprisal for the employee's or former 36 employee's disclosure of information to a public body. The state 37 personnel board shall recommend the dismissal of a supervisor or other 38 responsible person, other than an elected official, who it determines 39 committed a prohibited personnel practice. 40

C. The state personnel board may adopt rules it deems necessary for 41 the administration of hearings and the review of appeals and complaints as 42 prescribed in this section. 43

D. The state personnel board shall only exercise authority that is 44 specifically granted to the board pursuant to this article. 45

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41-791.01. Powers and duties relating to facilities planning 3 and construction; exemption 4

A. The department has the following facilities planning and 5 construction powers and duties: 6

1. Review all architectural, engineering and construction contracts 7 before submission to the department of law. 8

2. Approve plans and specifications and changes thereof for all 9 capital projects for which monies are appropriated by the legislature. 10

3. Review and approve all progress payments on all major capital 11 projects. 12

4. Make regular inspections of all capital projects during the 13 course of construction to ensure compliance with the plans and 14 specifications approved by the director. 15

B. The Arizona board of regents shall GOVERNING BOARDS OF THE 16 UNIVERSITIES ARE not be subject to the provisions of this section. 17


41-792. Lease cost review board; members; duties; square 20 footage lease costs 21

A. A THE lease cost review board is established. Board membership 22 consists of the director or the director's designee and four members 23 appointed by the director, as follows: 24

1. Three directors of other state agencies. 25 2. A staff member of the joint legislative budget committee. 26 B. The term of office of appointed members is three years. A 27

director of a state agency may appoint an employee of the agency to serve 28 on the committee in the director's stead. 29

C. Before July 1 of each even-numbered year, the lease cost review 30 board shall: 31

1. Estimate an average square foot dollar cost for the following 32 two fiscal years for leasing privately owned office space. 33

2. Recommend to the director a rental rate to be charged to state 34 agencies for using space in buildings owned by or leased to this state. 35

D. Leases proposed to be entered into by a state agency for 36 privately owned office space must be approved by the director, or in the 37 case of the state universities, by the Arizona board of regents GOVERNING 38 BOARD OF THAT UNIVERSITY. Before August 1 of each even-numbered year, the 39 director and the LEASE COST REVIEW board shall each submit a report to the 40 joint committee on capital review that lists all leases that were approved 41 during the prior two fiscal years and that exceeded the average square 42 foot dollar cost estimated for the prior fiscal year pursuant to 43 subsection C OF THIS SECTION. 44

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41-793. Building systems; capital improvement plans 3 A. The department of administration, the Arizona board of regents 4

GOVERNING BOARD OF EACH UNIVERSITY and the department of transportation 5 shall each be considered as a separate building system. Subject to 6 approval by the joint committee on capital review, the director of the 7 department of administration shall establish additional building systems 8 for the purpose of computing and funding building renewal. Subject to 9 approval by the joint committee on capital review, each building system 10 shall designate an agency that is responsible for computing building 11 renewal needs for each fiscal year pursuant to the formula approved by the 12 committee and for allocating appropriated building renewal monies within 13 the building system. 14

B. The agency responsible for each building system established 15 pursuant to subsection A of this section shall prepare each year a capital 16 improvement plan that contains proposals for state spending on land 17 acquisition, capital projects, energy systems, energy management systems 18 and building renewal for the building system. Copies of the plan shall be 19 submitted to the governor no later than October 15. Each plan shall 20 include: 21

1. A detailed list of all land acquisition and capital projects 22 that are recommended to be undertaken or continued for the building system 23 during the next fiscal year, an explanation as to the need for each 24 acquisition or project, the effect of the recommended acquisition or 25 capital project on the future operating expenses of this state, 26 recommendations as to the priority of recommended acquisitions or capital 27 projects and the means of financing those acquisitions or projects. 28

2. Forecasts as to the requirements for land acquisition and 29 capital projects for the building system during the two fiscal years 30 following the fiscal year provided for in paragraph 1 of this subsection 31 and for any additional periods as may be necessary or desirable for an 32 adequate presentation of the capital projects and a schedule for the 33 planning and implementation or construction of those capital projects. 34

3. A report on the status of all ongoing or recently completed land 35 acquisitions and capital projects for the building system, with a summary 36 of monies expended for each acquisition or project. 37

4. A report on the condition, maintenance and utilization of all 38 buildings within the building system that were inspected during the prior 39 fiscal year. 40

5. A report on the building renewal activities undertaken during 41 the past fiscal year, including the specific purposes for which monies 42 were expended, proposed activities for the current fiscal year and a 43 prioritized schedule of renewal projects proposed for the following fiscal 44 year. 45

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6. The amount of appropriation required in the following fiscal 1 year for building renewal as determined by the building renewal formula 2 set forth in section 41-793.01. 3

C. On or before June 1 of each year or thirty days after the state 4 legislature adjourns its regular session sine die, whichever is later, 5 each state agency under the department of administration building system 6 and not later than August 1 of each year each agency under the Arizona 7 board of regents UNIVERSITY building system shall provide to the agency 8 responsible for its building system: 9

1. A detailed list of land acquisition and capital projects the 10 agency seeks to undertake or continue in the next fiscal year, an 11 explanation as to the need for each acquisition or project, the effect of 12 the acquisitions or capital projects on future operating expenses of this 13 state, including energy systems and energy management systems, and other 14 relevant supporting data requested by the agency responsible for the 15 building system. 16

2. Forecasts as to the requirements for land acquisition or capital 17 projects of the agency for the two fiscal years following the fiscal year 18 provided for in paragraph 1 of this subsection and for any additional 19 periods as may be necessary or desirable for the adequate presentation of 20 the capital projects and a schedule for the planning and implementation or 21 construction of those capital projects. 22

3. A report on all ongoing or recently completed land acquisitions 23 and capital projects of the agency, with a summary of monies expended for 24 each acquisition or project, and energy consumption and expenditure 25 information. 26

4. Any other information requested by the agency responsible for 27 the building system. 28

D. Each state agency in complying with subsection C, paragraph 1 of 29 this section and the agency responsible for each building system in 30 complying with subsection B, paragraph 1 of this section should give 31 priority to fire and life safety projects. 32

E. The agency responsible for a building system shall inspect the 33 condition, maintenance and utilization of each building within the 34 building system not less than once every four fiscal years and shall 35 report its findings pursuant to subsection B of this section. For 36 purposes of complying with this requirement, the agency responsible for 37 each building system shall inspect approximately fifty per cent PERCENT of 38 its buildings within the first two years of the four year FOUR-YEAR 39 cycle. The agency shall inspect the other fifty per cent PERCENT of the 40 buildings in the remaining two years of the four year FOUR-YEAR cycle. 41

F. The governor shall prescribe standard forms in accordance with 42 the provisions of this section to be used by state agencies in preparing 43 and submitting capital improvement plans. The forms prescribed shall be 44

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so constructed as to allow each building system to adequately provide 1 information pertinent to its manner of operation. 2

G. Each plan, forecast and report required for two or more fiscal 3 years in this section shall be delineated separately for each year. 4


41-1002.01. Educational programs; enrollment limit 7 prohibited; definition 8

A. An agency may not limit enrollment in any school or educational 9 program of an institution of higher education. 10

B. For the purposes of this section, "agency" has the same meaning 11 prescribed in section 41-1001 but does not include the Arizona board of 12 regents GOVERNING BOARD OF A UNIVERSITY or any community college district 13 GOVERNING board. 14


41-1005. Exemptions 17 A. This chapter does not apply to any: 18 1. Rule that relates to the use of public works, including streets 19

and highways, under the jurisdiction of an agency if the effect of the 20 order is indicated to the public by means of signs or signals. 21

2. Order or rule of the Arizona game and fish commission that does 22 the following: 23

(a) Opens, closes or alters seasons or establishes bag or 24 possession limits for wildlife. 25

(b) Establishes a fee pursuant to section 5-321, 5-322 or 5-327. 26 (c) Establishes a license classification, fee or application fee 27

pursuant to title 17, chapter 3, article 2. 28 3. Rule relating to section 28-641 or to any rule regulating motor 29

vehicle operation that relates to speed, parking, standing, stopping or 30 passing enacted pursuant to title 28, chapter 3. 31

4. Rule concerning only the internal management of an agency that 32 does not directly and substantially affect the procedural or substantive 33 rights or duties of any segment of the public. 34

5. Rule that only establishes specific prices to be charged for 35 particular goods or services sold by an agency. 36

6. Rule concerning only the physical servicing, maintenance or care 37 of agency owned or operated facilities or property. 38

7. Rule or substantive policy statement concerning inmates or 39 committed youths of a correctional or detention facility in secure custody 40 or patients admitted to a hospital, if made by the state department of 41 corrections, the department of juvenile corrections, the board of 42 executive clemency or the department of health services or a facility or 43 hospital under the jurisdiction of the state department of corrections, 44

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the department of juvenile corrections or the department of health 1 services. 2

8. Form whose contents or substantive requirements are prescribed 3 by rule or statute, and instructions for the execution or use of the form. 4

9. Capped fee-for-service schedule adopted by the Arizona health 5 care cost containment system administration pursuant to title 36, 6 chapter 29. 7

10. Fees prescribed by section 6-125. 8 11. Order of the director of water resources adopting or modifying 9

a management plan pursuant to title 45, chapter 2, article 9. 10 12. Fees established under section 3-1086. 11 13. Fees established under sections 41-4010 and 41-4042. 12 14. Rule or other matter relating to agency contracts. 13 15. Fees established under section 32-2067 or 32-2132. 14 16. Rules made pursuant to section 5-111, subsection A. 15 17. Rules made by the Arizona state parks board concerning the 16

operation of the Tonto natural bridge state park, the facilities located 17 in the Tonto natural bridge state park and the entrance fees to the Tonto 18 natural bridge state park. 19

18. Fees or charges established under section 41-511.05. 20 19. Emergency medical services protocols except as provided in 21

section 36-2205, subsection B. 22 20. Fee schedules established pursuant to section 36-3409. 23 21. Procedures of the state transportation board as prescribed in 24

section 28-7048. 25 22. Rules made by the state department of corrections. 26 23. Fees prescribed pursuant to section 32-1527. 27 24. Rules made by the department of economic security pursuant to 28

section 46-805. 29 25. Schedule of fees prescribed by section 23-908. 30 26. Procedure that is established pursuant to title 23, chapter 6, 31

article 6. 32 27. Rules, administrative policies, procedures and guidelines 33

adopted for any purpose by the Arizona commerce authority pursuant to 34 chapter 10 of this title if the authority provides, as appropriate under 35 the circumstances, for notice of an opportunity for comment on the 36 proposed rules, administrative policies, procedures and guidelines. 37

28. Rules made by a marketing commission or marketing committee 38 pursuant to section 3-414. 39

29. Administration of public assistance program monies authorized 40 for liabilities that are incurred for disasters declared pursuant to 41 sections 26-303 and 35-192. 42

30. User charges, tolls, fares, rents, advertising and sponsorship 43 charges, services charges or similar charges established pursuant to 44 section 28-7705. 45

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31. Administration and implementation of the hospital assessment 1 pursuant to section 36-2901.08, except that the Arizona health care cost 2 containment system administration must provide notice and an opportunity 3 for public comment at least thirty days before establishing or 4 implementing the administration of the assessment. 5

32. Rules made by the Arizona department of agriculture to adopt 6 and implement the provisions of the federal milk ordinance as prescribed 7 by section 3-605. 8

B. Notwithstanding subsection A, paragraph 21 of this section, at 9 such time as the federal highway administration authorizes the 10 privatization of rest areas, the state transportation board shall make 11 rules governing the lease or license by the department of transportation 12 to a private entity for the purposes of privatization of a rest area. 13

C. Coincident with the making of a final rule pursuant to an 14 exemption from the applicability of this chapter under this section, 15 another statute or session law, the agency shall file a copy of the rule 16 with the secretary of state for publication pursuant to section 41-1012 17 and provide a copy to the council. 18

D. Unless otherwise required by law, articles 2, 3, 4 and 5 of this 19 chapter do not apply to the Arizona board of regents and the institutions 20 under its jurisdiction GOVERNING BOARDS OF THE UNIVERSITIES AND THE PUBLIC 21 UNIVERSITIES, except that the Arizona board of regents GOVERNING BOARD OF 22 EACH UNIVERSITY shall make policies or rules for the THAT GOVERNING board 23 and the institutions under its jurisdiction UNIVERSITY that provide, as 24 appropriate under the circumstances, for notice of and opportunity for 25 comment on the policies or rules proposed. 26

E. Unless otherwise required by law, articles 2, 3, 4 and 5 of this 27 chapter do not apply to the Arizona state schools for the deaf and the 28 blind, except that the board of directors of all the state schools for the 29 deaf and the blind shall adopt policies for the board and the schools 30 under its jurisdiction that provide, as appropriate under the 31 circumstances, for notice of and opportunity for comment on the policies 32 proposed for adoption. 33

F. Unless otherwise required by law, articles 2, 3, 4 and 5 of this 34 chapter do not apply to the state board of education, except that the 35 state board of education shall adopt policies or rules for the board and 36 the institutions under its jurisdiction that provide, as appropriate under 37 the circumstances, for notice of and opportunity for comment on the 38 policies or rules proposed for adoption. In order to implement or change 39 any rule, the state board of education shall provide at least two 40 opportunities for public comment. 41

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41-1092.02. Appealable agency actions; application of 3 procedural rules; exemption from article 4

A. This article applies to all contested cases as defined in 5 section 41-1001 and all appealable agency actions, except contested cases 6 with or appealable agency actions of: 7

1. The state department of corrections. 8 2. The board of executive clemency. 9 3. The industrial commission of Arizona. 10 4. The Arizona corporation commission. 11 5. The Arizona board of regents and institutions under its 12

jurisdiction GOVERNING BOARDS OF THE UNIVERSITIES AND THE PUBLIC 13 UNIVERSITIES. 14

6. The state personnel board. 15 7. The department of juvenile corrections. 16 8. The department of transportation, except as provided in title 17

28, chapter 30, article 2. 18 9. The department of economic security except as provided in 19

section 46-458. 20 10. The department of revenue regarding: 21 (a) Income tax or withholding tax. 22 (b) Any tax issue related to information associated with the 23

reporting of income tax or withholding tax unless the taxpayer requests in 24 writing that this article apply and waives confidentiality under title 42, 25 chapter 2, article 1. 26

11. The board of tax appeals. 27 12. The state board of equalization. 28 13. The state board of education, but only in connection with 29

contested cases and appealable agency actions related to applications for 30 issuance or renewal of a certificate and discipline of certificate holders 31 pursuant to sections 15-203, 15-534, 15-534.01, 15-535, 15-545 and 15-550. 32

14. The board of fingerprinting. 33 15. The department of child safety except as provided in sections 34

8-506.01 and 8-811. 35 B. Unless waived by all parties, an administrative law judge shall 36

conduct all hearings under this article, and the procedural rules set 37 forth in this article and rules made by the director apply. 38

C. Except as provided in subsection A of this section: 39 1. A contested case heard by the office of administrative hearings 40

regarding taxes administered under title 42 shall be subject to section 41 42-1251. 42

2. A final decision of the office of administrative hearings 43 regarding taxes administered under title 42 may be appealed by either 44 party to the director of the department of revenue, or a taxpayer may file 45

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and appeal directly to the board of tax appeals pursuant to section 1 42-1253. 2

D. Except as provided in subsections A, B, E, F and G of this 3 section and notwithstanding any other administrative proceeding or 4 judicial review process established in statute or administrative rule, 5 this article applies to all appealable agency actions and to all contested 6 cases. 7

E. Except for a contested case or an appealable agency action 8 regarding unclaimed property, sections 41-1092.03, 41-1092.08 and 9 41-1092.09 do not apply to the department of revenue. 10

F. The board of appeals established by section 37-213 is exempt 11 from: 12

1. The time frames for hearings and decisions provided in section 13 41-1092.05, subsection A, section 41-1092.08 and section 41-1092.09. 14

2. The requirement in section 41-1092.06, subsection A to hold an 15 informal settlement conference at the appellant's request if the sole 16 subject of an appeal pursuant to section 37-215 is the estimate of value 17 reported in an appraisal of lands or improvements. 18

G. Auction protest procedures pursuant to title 37, chapter 2, 19 article 4.1 are exempt from this article. 20


41-1231. Definitions 23 In this article, unless the context otherwise requires: 24 1. "Authorized lobbyist" means any person, other than a designated 25

lobbyist or lobbyist for compensation, who is employed by, retained by or 26 representing a principal, with or without compensation, for the purpose of 27 lobbying and who is listed as an authorized lobbyist by the principal in 28 its registration pursuant to section 41-1232. 29

2. "Authorized public lobbyist" means a person, other than a 30 designated public lobbyist, who is employed by, retained by or 31 representing a public body, with or without compensation, for the purpose 32 of lobbying and who is listed as an authorized public lobbyist by the 33 public body in its registration pursuant to section 41-1232.01. 34

3. "Designated lobbyist" means the person who is designated by a 35 principal as the single point of contact for the principal and who is 36 listed as the designated lobbyist by the principal in its registration 37 pursuant to section 41-1232. 38

4. "Designated public lobbyist" means the person who is designated 39 by a public body as the single point of contact for the public body and 40 who is listed as the designated public lobbyist by the public body in its 41 registration pursuant to section 41-1232.01. 42

5. "Entertainment" means the amount of any expenditure paid or 43 incurred for admission to any sporting or cultural event or for 44 participation in any sporting or cultural activity. 45

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6. "Expenditure" means a payment, distribution, loan, advance, 1 deposit or gift of money or anything of value and includes a contract, 2 promise or agreement, whether or not legally enforceable, to make an 3 expenditure that provides a benefit to an individual state officer or 4 state employee and that is incurred by or on behalf of one or more 5 principals, public bodies, lobbyists, designated public lobbyists or 6 authorized public lobbyists. 7

7. "Family gift" means a gift to a state officer or employee or a 8 member of the officer's or employee's household from a principal, 9 lobbyist, designated public lobbyist or authorized public lobbyist who is 10 a relative of the state officer or employee or a member of the household 11 of the state officer or employee if the donor is not acting as the agent 12 or intermediary for someone other than a person covered by this paragraph. 13

8. "Food or beverage" means the amount of any expenditure paid or 14 incurred for food or beverages for a state officer or employee provided at 15 a location at which the principal, public body, lobbyist, designated 16 public lobbyist or authorized public lobbyist who made the expenditure is 17 present. 18

9. "Gift" means a payment, distribution, expenditure, advance, 19 deposit or donation of money, any intangible personal property or any kind 20 of tangible personal or real property. For the purposes of this article, 21 gift does not include: 22

(a) A gift, devise or inheritance from an individual's spouse, 23 child, parent, grandparent, grandchild, brother, sister, parent-in-law, 24 brother-in-law, sister-in-law, nephew, niece, aunt, uncle or first cousin 25 or the spouse of any such individual if the donor is not acting as the 26 agent or intermediary for someone other than a person covered by this 27 subdivision. 28

(b) Expenditures that are either properly reported or exempt from 29 reporting under this chapter for: 30

(i) A speaking engagement. 31 (ii) Food or beverages. 32 (iii) Travel and lodging. 33 (iv) Flowers. 34 (c) Salary, compensation or employer-reimbursed expenses lawfully 35

paid to a public official. 36 (d) The value, cost or price of professional or consulting services 37

that are not rendered to obtain a benefit for any registered principal, 38 public body, lobbyist, designated public lobbyist or authorized public 39 lobbyist or the clients of a principal or lobbyist. 40

(e) Expenses relating to a special event or function to which all 41 members of the legislature, either house of the legislature or any 42 committee of the legislature is invited. 43

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(f) A plaque or other form of recognition similar to a plaque to a 1 state officer or state employee to signify the honorary recognition of a 2 service or other notable accomplishment. 3

(g) Informational material such as books, reports, pamphlets, 4 calendars or periodicals. 5

(h) An item that is not used and that is returned within fifteen 6 days of receipt to the donor or that is delivered within fifteen days of 7 receipt to a charitable organization and that is not claimed as a 8 charitable contribution for state or federal income tax purposes. 9

(i) A campaign contribution that is properly received and reported 10 as required by law. 11

(j) An item that is given to a state officer or employee if the 12 state officer or employee gives an item of approximately the same value to 13 the giver of the item at the same time that the item is given or on a 14 similar occasion as the one that prompted the original item to be given. 15

(k) Gifts of a personal nature that were customarily received by an 16 individual from the donor before the individual became a state officer or 17 employee. 18

(l) An item that is given to the general public at an event. 19 10. "Legislation" means bills, resolutions, memorials, amendments, 20

nominations and other matters that are pending or proposed in either house 21 of the legislature of this state. 22

11. "Lobbying": 23 (a) Means attempting to influence the passage or defeat of any 24

legislation by directly communicating with any legislator or attempting to 25 influence any formal rulemaking proceeding pursuant to chapter 6 of this 26 title or rulemaking proceedings that are exempt from chapter 6 of this 27 title by directly communicating with any state officer or employee. 28

(b) Includes, for a person who is otherwise required to be 29 registered as a lobbyist for compensation pursuant to this article, 30 attempting to influence the procurement of materials, services or 31 construction by an agency as defined in section 41-1001, including the 32 office of the governor. 33

(c) Does not include: 34 (i) Interagency communications between state agency employees. 35 (ii) Communications between a public official or employee of a 36

public body, designated public lobbyist or authorized public lobbyist and 37 any state officer, except for a member of the legislature, or an employee 38 of the legislature. 39

(iii) Oral questions or comments made by a person to a state 40 officer or employee regarding a proposed rule and made in public at a 41 meeting or workshop that is open to the public and that is sponsored by a 42 state agency, board, commission, council or office. 43

(iv) Communications between a public body and a self-employed 44 person or person employed by a partnership or company regarding the 45

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procurement of materials, services or construction unless the self-1 employed person or person employed by a partnership or company is 2 otherwise required to register pursuant to this article or is employed by, 3 supervised by at any level or contracted by a person who is otherwise 4 required to register as a lobbyist for compensation pursuant to this 5 article. 6

12. "Lobbyist" means any person, other than a designated public 7 lobbyist or authorized public lobbyist, who is employed by, retained by or 8 representing a person other than himself, with or without compensation, 9 for the purpose of lobbying and who is listed as a lobbyist by the 10 principal in its registration pursuant to section 41-1232. Lobbyist 11 includes a lobbyist for compensation, designated lobbyist and authorized 12 lobbyist. 13

13. "Lobbyist for compensation" means a lobbyist who is compensated 14 for the primary purpose of lobbying on behalf of a principal and who is 15 listed by the principal in its registration pursuant to section 41-1232. 16

14. "Person" means an individual, partnership, committee, 17 association or corporation and any other organization or group of persons, 18 except legislators and political parties qualified for representation on 19 the ballot pursuant to section 16-801 or 16-804. 20

15. "Personal hospitality" means hospitality, meals, beverages, 21 transportation or lodging furnished but not commercially provided by a 22 person on property or facilities owned or possessed by the person or the 23 person's family. 24

16. "Principal" means any person, other than a public body, that 25 employs, retains, engages or uses, with or without compensation, a 26 lobbyist. Principal includes any subsidiary of a corporation. 27

17. "Procurement" has the same meaning prescribed in section 28 41-2503. 29

18. "Public body" means the Arizona board of regents GOVERNING 30 BOARD OF A UNIVERSITY, a PUBLIC university under the jurisdiction of the 31 Arizona board of regents IN THIS STATE, the judicial department, any state 32 agency, board, commission or council, any county, any county elected 33 officer who elects to appoint a designated public lobbyist or any city, 34 town, district or other political subdivision of this state that receives 35 and uses tax revenues and that employs, retains, engages or uses, with or 36 without compensation, a designated public lobbyist or authorized public 37 lobbyist. 38

19. "Public official" means a person who is duly elected, appointed 39 or retained through election to an elected state, county or local office. 40

20. "Single expenditure" means an expenditure that provides a 41 benefit of more than twenty dollars to an individual state officer or 42 state employee and that is incurred by or on behalf of one or more 43 principals, public bodies, lobbyists, designated public lobbyists or 44 authorized public lobbyists. 45

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21. "Speaking engagement": 1 (a) Means the amount of any expense paid or incurred for entrance 2

fees, lodging, food and beverage, entertainment, travel and other expenses 3 for the state officer's or employee's attendance at an event, committee, 4 meeting, conference or seminar, including meetings of state, regional or 5 national organizations or their committees concerned with legislative or 6 governmental activities if the state officer or employee participates in 7 the event as a speaker or panel participant by presenting information 8 relating to the state officer's or employee's legislative or official 9 duties or by performing a ceremonial function appropriate to the state 10 officer's or employee's position. 11

(b) Does not include expenditures for an honorarium or any other 12 similar fee paid to a speaker. 13

22. "State employee" means an employee of the legislature, a PUBLIC 14 university under the jurisdiction of the Arizona board of regents IN THIS 15 STATE, the judicial department or a state office, agency, board, 16 commission or council. 17

23. "State officer" means a person who is duly elected, appointed 18 or retained through election to any state office, or a member of any state 19 board, commission or council, and includes a member of the legislature. 20


41-1232.08. Entertainment ban; state and political 23 subdivisions; exceptions 24

A. A principal, designated lobbyist, authorized lobbyist, lobbyist 25 for compensation, public body, designated public lobbyist or authorized 26 public lobbyist or any other person acting on that person's behalf shall 27 not make an expenditure or single expenditure for entertainment for a 28 state officer or state employee. A state officer or state employee shall 29 not accept an expenditure or single expenditure for entertainment from a 30 principal, designated lobbyist, authorized lobbyist, lobbyist for 31 compensation, public body, designated public lobbyist or authorized public 32 lobbyist or any other person acting on that person's behalf. 33

B. A person who for compensation attempts to influence the 34 procurement of materials, services or construction by an agency as defined 35 in section 41-1001, including the office of the governor, or the passage 36 or defeat of legislation, ordinances, rules, regulations, nominations and 37 other matters that are pending or proposed or that are subject to formal 38 approval by the corporation commission, a county board of supervisors, a 39 city or town governing body or a school district governing board or any 40 person acting on that person's behalf shall not make an expenditure or 41 single expenditure for entertainment for an elected or appointed member of 42 the corporation commission, a county board of supervisors, a city or town 43 governing body or a school district governing board. An elected or 44 appointed member of the corporation commission, a county board of 45

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supervisors, a city or town governing body or a school district governing 1 board shall not accept an expenditure or single expenditure for 2 entertainment from a person who for compensation attempts to influence the 3 procurement of materials, services or construction by an agency as defined 4 in section 41-1001, including the office of the governor, or the passage 5 or defeat of legislation, ordinances, rules, regulations, nominations and 6 other matters that are pending or proposed or that are subject to formal 7 approval by the corporation commission, a county board of supervisors, a 8 city or town governing body or a school district governing board. 9

C. This section shall not apply to: 10 1. Entertainment in connection with a special event properly 11

reported pursuant to this article. 12 2. Entertainment that is incidental to a speaking engagement. 13 3. The following persons while attending or participating in any 14

sporting or cultural event or activity, sponsored by the board, district 15 or institution, in a facility that is owned or operated by the board, 16 district or institution: 17

(a) Employees of a school district governing board. 18 (b) Employees of a community college district governing board. 19 (c) Employees of any institution under the jurisdiction of the 20

Arizona board of regents PUBLIC UNIVERSITY IN THIS STATE. 21 D. The provisions of this article that define special events for 22

legislators apply to special events for members of the Arizona board of 23 regents GOVERNING BOARDS OF THE UNIVERSITIES. 24


41-1371. Definitions 27 In this article, unless the context otherwise requires: 28 1. "Administrative act" means an action, decision, omission, 29

recommendation, practice, policy or procedure of an agency but does not 30 include the preparation or presentation of legislation or the substantive 31 content of a judicial order, decision or opinion. 32

2. "Agency" means a department, office, corporation, authority, 33 organization, commission, council or board of the executive branch of 34 state government, a department, office, institution, authority, 35 organization, commission, committee, council or board of state government 36 that is independent of the executive or legislative branches of state 37 government or an officer, employee or member of an agency acting or 38 purporting to act in the exercise of official duties. Agency does not 39 mean the judicial department of state government, the board of regents 40 GOVERNING BOARD OF THE UNIVERSITIES, universities or community college 41 districts. 42

3. "Record" means any document, photograph, film, exhibit or other 43 item developed or received under law or in connection with the transaction 44 of official business except an attorney's work product, communications 45

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that are protected under the attorney-client privilege and confidential 1 information as defined in section 41-1378, subsection D, paragraph 4. 2


41-1502. Arizona commerce authority; board of directors; 5 conduct of office; audit 6

A. The Arizona commerce authority is established. The mission of 7 the authority is to provide private sector leadership in growing and 8 diversifying the economy of this state, creating high quality employment 9 in this state through expansion, attraction and retention of businesses 10 and marketing this state for the purpose of expansion, attraction and 11 retention of businesses. 12

B. The authority shall be governed by a board of directors 13 consisting of: 14

1. The governor, who serves as chairperson. 15 2. The chief executive officer. 16 3. Seventeen private sector business leaders who are chief 17

executive officers of private, for-profit enterprises. None of these 18 members may be an elected official of any government entity. These 19 members must be appointed from geographically diverse areas of this state 20 and not all from the same county. These members shall serve staggered 21 three-year terms of office beginning and ending on the third Monday in 22 January. These members shall be appointed as follows: 23

(a) Nine members who are appointed by the governor. 24 (b) Four members who are appointed by the president of the senate. 25 (c) Four members who are appointed by the speaker of the house of 26

representatives. 27 4. The following as ex officio members without the power to vote: 28 (a) The president of the senate. 29 (b) The speaker of the house of representatives. 30 (c) The president of the Arizona board of regents. A MEMBER OF THE 31

GOVERNING BOARD OF A UNIVERSITY WHO IS SELECTED BY THE GOVERNING BOARDS OF 32 THE UNIVERSITIES. 33

(d) The president of each state university under the jurisdiction 34 of the Arizona board of regents. 35

(e) One president of a community college who is appointed by a 36 statewide organization of community college presidents. 37

(f) The chairperson of the governor's council on small business, or 38 its successor. 39

(g) The chairperson of the workforce Arizona council established by 40 executive order pursuant to section 41-5401. 41

(h) One member of the rural business development advisory council 42 established by section 41-1505 who is appointed by the governor. 43

(i) The president of a statewide organization of incorporated 44 cities and towns who is appointed by the governor. 45

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(j) The president of a statewide organization of county boards of 1 supervisors who is appointed by the governor. 2

C. For members who are appointed by the governor pursuant to 3 subsection B of this section, before appointment by the governor, a 4 prospective member of the board of directors shall submit a full set of 5 fingerprints to the governor for the purpose of obtaining a state and 6 federal criminal records check pursuant to section 41-1750 and Public Law 7 92-544. The department of public safety may exchange this fingerprint 8 data with the federal bureau of investigation. 9

D. The following shall serve as technical advisors to the board to 10 enhance collaboration among state agencies to meet infrastructure needs 11 and facilitate growth opportunities throughout this state: 12

1. The director of environmental quality. 13 2. The state land commissioner. 14 3. The director of the department of revenue. 15 4. The director of the office of tourism. 16 5. The director of the department of transportation. 17 6. The director of water resources. 18 7. The director of the department of financial institutions. 19 8. The director of the Arizona-Mexico commission in the governor's 20

office. 21 9. The director of the office of economic opportunity. 22 E. The governor shall appoint a cochairperson of the board of 23

directors from among the voting members. The board may establish an 24 executive committee consisting of the chairperson, the cochairperson, the 25 chief executive officer, and additional voting members of the board 26 elected by the board. The chairperson may appoint subcommittees as 27 necessary. 28

F. The board may request assistance from representatives of other 29 state agencies to maximize economic development opportunities by 30 leveraging their access to strategic assets and planning processes. 31

G. Board members serve without compensation but are eligible for 32 reimbursement of expenses pursuant to section 41-1504, subsection E, 33 paragraph 1. 34

H. A majority of the voting members, which must include the 35 chairperson and the chief executive officer, constitute a quorum for the 36 purpose of an official meeting for conducting business. An affirmative 37 vote of a majority of the members present at an official meeting is 38 sufficient for any action to be taken. 39

I. The board of directors shall keep and maintain a complete and 40 accurate record of all of its proceedings. Public access to the board's 41 records is subject to section 41-1504, subsection L. 42

J. The board of directors, executive committee, subcommittees and 43 advisory councils are subject to title 38, chapter 3, article 3.1, 44 relating to public meetings, except as follows: 45

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1. In addition to section 38-431.03, the board of directors, 1 executive committee and subcommittees may meet in executive session for 2 discussion about potential business development opportunities and 3 strategies, which, if made public, could potentially harm the applicant's, 4 the potential applicant's or this state's competitive position. 5

2. Social and travel events related to the expansion, attraction 6 and retention of businesses are not public meetings if no legal action 7 involving a final vote or decision is taken. 8

3. Activities and events held in public for the purpose of 9 announcing the expansion, attraction and retention of projects are not 10 public meetings. 11

K. The board of directors and the officers and employees of the 12 authority are subject to title 38, chapter 3, article 8, relating to 13 conflicts of interest. 14

L. The board of directors shall adopt written policies, procedures 15 and guidelines for standards of conduct, including a gift policy, for 16 members of the board and for officers and employees of the authority. 17

M. The compensation of all officers and employees is considered a 18 public record pursuant to title 39, chapter 1. 19

N. The authority shall operate on the state fiscal year. The board 20 of directors shall cause an annual audit to be conducted on or before 21 October 31 of each of the authority's public funds established by this 22 chapter by an independent certified public accountant. The board shall 23 immediately file a certified copy of the audit with the auditor general. 24 The auditor general may make such further audits and examinations as 25 necessary and may take appropriate action relating to the audit or 26 examination pursuant to chapter 7, article 10.1 of this title. If the 27 auditor general takes no further action within thirty days after the audit 28 is filed, the audit is considered to be sufficient. 29

O. All state agencies shall cooperate with the authority and make 30 available data pertaining to the functions of the authority as requested 31 by the authority. 32


41-1829.01. Arizona peace officers memorial board; duties 35 A. The Arizona peace officers memorial board shall: 36 1. Add to the memorial at least annually the names of all members 37

of the law enforcement community in this state who have lost their lives 38 in the line of duty and provide for a dedication ceremony which THAT 39 commemorates the addition of their names. 40

2. Plan and provide for the maintenance of the peace officers 41 memorial. 42

3. Report annually to the president of the senate and the speaker 43 of the house of representatives on the progress of the memorial and shall 44

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provide a copy of this report to the secretary of state and the director 1 of the Arizona state library, archives and public records. 2

4. Determine those persons who are eligible for the tuition waiver 3 pursuant to section 15-1808 and report the determination to the Arizona 4 board of regents GOVERNING BOARD OF EACH UNIVERSITY or to each community 5 college district governing board, as applicable. 6

B. The Arizona peace officers memorial board may: 7 1. Solicit private monetary donations for deposit in the Arizona 8

peace officers memorial fund. 9 2. Use the monies deposited in the Arizona peace officers memorial 10

fund established by section 41-1829.02 for persons who are eligible for 11 the tuition waiver pursuant to section 15-1808 to pay for tuition, if 12 tuition has not been waived, and other educational expenses incurred at a 13 community college or a publicly or privately funded college or university 14 or technical school. 15


41-1862. Arizona fallen firefighter memorial committee; 18 powers and duties; subcommittee 19

A. The Arizona fallen firefighter memorial committee shall: 20 1. Establish an acceptable set of standards for persons to be 21

memorialized on the Arizona fallen firefighter memorial that is located in 22 Wesley Bolin Plaza. 23

2. Determine those persons who are eligible to be memorialized. 24 3. Plan and provide for additions to and maintenance of the Arizona 25

fallen firefighter memorial on an annual basis. 26 4. Solicit private monetary donations or public monies from 27

municipalities for deposit in the Arizona fallen firefighter memorial 28 fund. 29

5. Conduct an annual fallen firefighter memorial service. 30 6. Determine those persons who are eligible for the tuition waiver 31

scholarship pursuant to section 15-1808 and report the determination to 32 the governor's office and Arizona board of regents to THE GOVERNING BOARD 33 OF EACH UNIVERSITY or to each community college district governing board, 34 as applicable. 35

B. The committee may establish a subcommittee that is appointed by 36 the committee chairperson to receive applications from and recommend 37 tuition waiver scholarships for persons who are eligible for the tuition 38 waiver scholarship pursuant to section 15-1808. The subcommittee shall 39 forward any recommendation for a tuition waiver scholarship to the 40 committee for approval. 41

C. The committee shall meet every January and May. The committee 42 may conduct additional meetings in person or telephonically. 43

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41-2501. Applicability 3 A. This chapter applies only to procurements initiated after 4

January 1, 1985 unless the parties agree to its application to 5 procurements initiated before that date. 6

B. This chapter applies to every expenditure of public monies, 7 including federal assistance monies except as otherwise specified in 8 section 41-2637, by this state, acting through a state governmental unit 9 as defined in this chapter, under any contract, except that this chapter 10 does not apply to either grants as defined in this chapter, or contracts 11 between this state and its political subdivisions or other governments, 12 except as provided in chapter 24 of this title and in article 10 of this 13 chapter. This chapter also applies to the disposal of state materials. 14 This chapter and rules adopted under this chapter do not prevent any state 15 governmental unit or political subdivision from complying with the terms 16 of any grant, gift, bequest or cooperative agreement. 17

C. All political subdivisions and other local public agencies of 18 this state may adopt all or any part of this chapter and the rules adopted 19 pursuant to this chapter. 20

D. Notwithstanding any other law, sections 41-2517 and 41-2546 21 apply to any agency as defined in section 41-1001, including the office of 22 the governor. 23

E. The Arizona board of regents GOVERNING BOARD OF THE UNIVERSITIES 24 and the legislative and judicial branches of state government are not 25 subject to this chapter except as prescribed in subsection F of this 26 section. 27

F. The Arizona board of regents GOVERNING BOARD OF EACH UNIVERSITY 28 and the judicial branch shall adopt rules prescribing procurement policies 29 and procedures for themselves and institutions under their 30 jurisdiction. The rules must be substantially equivalent to the policies 31 and procedures prescribed in this chapter. 32

G. The Arizona state lottery commission is exempt from this chapter 33 for procurement relating to the design and operation of the lottery or 34 purchase of lottery equipment, tickets and related materials. The 35 executive director of the Arizona state lottery commission shall adopt 36 rules substantially equivalent to the policies and procedures in this 37 chapter for procurement relating to the design and operation of the 38 lottery or purchase of lottery equipment, tickets or related materials. 39 All other procurement shall be as prescribed by this chapter. 40

H. The Arizona health care cost containment system administration 41 is exempt from this chapter for provider contracts pursuant to section 42 36-2904, subsection A and contracts for goods and services, including 43 program contractor contracts pursuant to title 36, chapter 29, articles 2 44 and 3 and contracts with regional behavioral health authorities pursuant 45

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to title 36, chapter 34. All other procurement, including contracts for 1 the statewide administrator of the program pursuant to section 36-2903, 2 subsection B, shall be as prescribed by this chapter. 3

I. Arizona correctional industries is exempt from this chapter for 4 purchases of raw materials, components and supplies that are used in the 5 manufacture or production of goods or services for sale entered into 6 pursuant to section 41-1622. All other procurement shall be as prescribed 7 by this chapter. 8

J. The state transportation board and the director of the 9 department of transportation are exempt from this chapter other than 10 sections 41-2517 and 41-2586 and are subject to title 28, chapter 20 and 2 11 Code of Federal Regulations section 200.317 for the procurement of the 12 following: 13

1. All items of construction, reconstruction, rehabilitation, 14 preservation or improvement undertaken on highway infrastructure. 15

2. Engineering services and any other work or activity to carry out 16 engineering services related to highway infrastructure. 17

3. Right-of-way services related to land titles, appraisals, real 18 property acquisitions, relocation services, property management and 19 facility design. 20

4. Any other construction, reconstruction, rehabilitation, 21 preservation or improvement work or activity that is required pursuant to 22 title 28, chapter 20. 23

K. The Arizona highways magazine is exempt from this chapter for 24 contracts for the production, promotion, distribution and sale of the 25 magazine and related products and for contracts for sole source creative 26 works entered into pursuant to section 28-7314, subsection A, paragraph 5. 27 All other procurement shall be as prescribed by this chapter. 28

L. The secretary of state is exempt from this chapter for contracts 29 entered into pursuant to section 41-1012 to publish and sell the 30 administrative code. All other procurement shall be as prescribed by this 31 chapter. 32

M. This chapter is not applicable to contracts for professional 33 witnesses if the purpose of such contracts is to provide for professional 34 services or testimony relating to an existing or probable judicial 35 proceeding in which this state is or may become a party or to contract for 36 special investigative services for law enforcement purposes. 37

N. The head of any state governmental unit, in relation to any 38 contract exempted by this section from this chapter, has the same 39 authority to adopt rules, procedures or policies as is delegated to the 40 director pursuant to this chapter. 41

O. Agreements negotiated by legal counsel representing this state 42 in settlement of litigation or threatened litigation are exempt from this 43 chapter. 44

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P. This chapter is not applicable to contracts entered into by the 1 department of economic security: 2

1. With a provider licensed or certified by an agency of this state 3 to provide child day care services. 4

2. With area agencies on aging created pursuant to the older 5 Americans act of 1965 (P.L. 89-73; 79 Stat. 218; 42 United States Code 6 sections 3001 through 3058ff). 7

3. For services pursuant to title 36, chapter 29, article 2. 8 4. With an eligible entity as defined by Public Law 105-285, 9

section 673(1)(A)(i), as amended, for designated community services block 10 grant program monies and any other monies given to the eligible entity 11 that accomplishes the purpose of Public Law 105-285, section 672. 12

Q. The Arizona health care cost containment system may not require 13 that persons with whom it contracts follow this chapter for the purposes 14 of subcontracts entered into for the provision of the following: 15

1. Mental health services pursuant to section 36-189, subsection B. 16 2. Services for the seriously mentally ill pursuant to title 36, 17

chapter 5, article 10. 18 3. Drug and alcohol services pursuant to section 36-141. 19 R. The department of health services may not require that persons 20

with whom it contracts follow this chapter for the purpose of subcontracts 21 entered into for the provision of domestic violence services pursuant to 22 title 36, chapter 30, article 1. 23

S. The department of health services is exempt from this chapter 24 for contracts for services of physicians at the Arizona state hospital. 25

T. Contracts for goods and services approved by the board of 26 trustees of the public safety personnel retirement system are exempt from 27 this chapter. 28

U. The Arizona department of agriculture is exempt from this 29 chapter with respect to contracts for private labor and equipment to 30 effect cotton or cotton stubble plow-up pursuant to rules adopted under 31 title 3, chapter 2, article 1. 32

V. The Arizona state parks board is exempt from this chapter for 33 purchases of guest supplies and items for resale such as food, linens, 34 gift items, sundries, furniture, china, glassware and utensils for the 35 facilities located in the Tonto natural bridge state park. 36

W. The Arizona state parks board is exempt from this chapter for 37 the purchase, production, promotion, distribution and sale of 38 publications, souvenirs and sundry items obtained and produced for resale. 39

X. The Arizona state schools for the deaf and the blind are exempt 40 from this chapter for the purchase of textbooks and when purchasing 41 products through a cooperative that is organized and operates in 42 accordance with state law if such products are not available on a 43 statewide contract and are related to the operation of the schools or are 44

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products for which special discounts are offered for educational 1 institutions. 2

Y. Expenditures of monies in the morale, welfare and recreational 3 fund established by section 26-153 are exempt from this chapter. 4

Z. Notwithstanding section 41-2534, the director of the state 5 department of corrections may contract with local medical providers in 6 counties with a population of less than four hundred thousand persons for 7 the following purposes: 8

1. To acquire hospital and professional medical services for 9 inmates who are incarcerated in state department of corrections facilities 10 that are located in those counties. 11

2. To ensure the availability of emergency medical services to 12 inmates in all counties by contracting with the closest medical facility 13 that offers emergency treatment and stabilization. 14

AA. The department of environmental quality is exempt from this 15 chapter for contracting for procurements relating to the water quality 16 assurance revolving fund program established pursuant to title 49, chapter 17 2, article 5. The department shall engage in a source selection process 18 that is similar to the procedures prescribed by this chapter. The 19 department may contract for remedial actions with a single selection 20 process. The exclusive remedy for disputes or claims relating to 21 contracting pursuant to this subsection is as prescribed by article 9 of 22 this chapter and the rules adopted pursuant to that article. All other 23 procurement by the department shall be as prescribed by this chapter. 24

BB. The motor vehicle division of the department of transportation 25 is exempt from this chapter for third-party authorizations pursuant to 26 title 28, chapter 13, only if all of the following conditions exist: 27

1. The division does not pay any public monies to an authorized 28 third party. 29

2. Exclusivity is not granted to an authorized third party. 30 3. The director has complied with the requirements prescribed in 31

title 28, chapter 13 in selecting an authorized third party. 32 CC. This section does not exempt third-party authorizations 33

pursuant to title 28, chapter 13 from any other applicable law. 34 DD. The state forester is exempt from this chapter for purchases 35

and contracts relating to wildland fire suppression and pre-positioning 36 equipment resources and for other activities related to combating wildland 37 fires and other unplanned risk activities, including fire, flood, 38 earthquake, wind and hazardous material responses. All other procurement 39 by the state forester shall be as prescribed by this chapter. 40

EE. The cotton research and protection council is exempt from this 41 chapter for procurements. 42

FF. The Arizona commerce authority is exempt from this chapter, 43 except article 10 for the purpose of cooperative purchases. The authority 44 shall adopt policies, procedures and practices, in consultation with the 45

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department of administration, that are similar to and based on the 1 policies and procedures prescribed by this chapter for the purpose of 2 increased public confidence, fair and equitable treatment of all persons 3 engaged in the process and fostering broad competition while accomplishing 4 flexibility to achieve the authority's statutory requirements. The 5 authority shall make its policies, procedures and practices available to 6 the public. The authority may exempt specific expenditures from the 7 policies, procedures and practices. 8

GG. The Arizona exposition and state fair board is exempt from this 9 chapter for contracts for professional entertainment. 10

HH. This chapter does not apply to the purchase of water, gas or 11 electric utilities. 12

II. This chapter does not apply to professional certifications, 13 professional memberships and conference registrations. 14

JJ. The department of gaming is exempt from this chapter for 15 problem gambling treatment services contracts with licensed behavioral 16 health professionals. 17

KK. This chapter does not apply to contracts for credit reporting 18 services. 19

LL. This chapter does not apply to contracts entered into by the 20 department of child safety: 21

1. With a provider of family foster care pursuant to section 8-503. 22 2. With an eligible entity as defined by Public Law 105-285, 23

section 673(1)(A)(i), as amended, for designated community services block 24 grant program monies and any other monies given to the eligible entity 25 that accomplishes the purpose of Public Law 105-285, section 672. 26

MM. This chapter does not apply to contracts entered into by the 27 department of economic security with a financial institution to serve as a 28 program manager and depository under section 46-903. 29


41-2616. Violation; classification; liability; civil penalty; 32 enforcement authority 33

A. A person who contracts for or purchases any material, services, 34 construction or construction services in a manner contrary to the 35 requirements of this chapter, the rules adopted pursuant to this chapter, 36 the rules adopted by the state board of education pursuant to section 37 15-213 or rules adopted by the Arizona board of regents GOVERNING BOARD OF 38 A UNIVERSITY, the Arizona lottery commission or the judicial branch 39 pursuant to section 41-2501 is personally liable for the recovery of all 40 public monies paid plus twenty per cent PERCENT of such amount and legal 41 interest from the date of payment and all costs and damages arising out of 42 the violation. 43

B. A person who intentionally or knowingly contracts for or 44 purchases any material, services, construction or construction services 45

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pursuant to a scheme or artifice to avoid the requirements of this 1 chapter, rules adopted pursuant to this chapter, rules adopted by the 2 state board of education pursuant to section 15-213 or rules adopted by 3 the state board of regents GOVERNING BOARD OF A UNIVERSITY, the state 4 lottery commission or the judicial branch pursuant to section 41-2501 is 5 guilty of a class 4 felony. 6

C. A person who serves on an evaluation committee for a procurement 7 shall sign a statement before reviewing bids or proposals that the 8 person has no interest in the procurement other than that disclosed and 9 will have no contact with any representative of a competing vendor related 10 to the particular procurement during the course of evaluation of bids or 11 proposals, except those contacts specifically authorized by section 12 41-2534, 41-2537, 41-2538, 41-2578, 41-2579 or 41-2581. The person shall 13 disclose on the statement any contact unrelated to the pending procurement 14 that the person may need to have with a representative of a competing 15 vendor and any contact with a representative of a competing vendor during 16 evaluation of bids or proposals except those contacts specifically 17 authorized by section 41-2534, 41-2537, 41-2538, 41-2578, 41-2579 or 18 41-2581. A person who serves on an evaluation committee and who fails to 19 disclose contact with a representative of a competing vendor or who fails 20 to provide accurate information on the statement is subject to a civil 21 penalty of at least one thousand dollars but not more than ten thousand 22 dollars. 23

D. The attorney general on behalf of this state shall enforce the 24 provisions of this chapter. 25


41-2706. Applicability of chapter 28 A. This chapter applies to the solicitation of grants initiated 29

after August 6, 1999. 30 B. This chapter does not apply to: 31 1. Any grant program that was exempt from chapter 23, article 3 of 32

this title and for which administrative rules establishing grant 33 solicitation procedures were adopted pursuant to chapter 6 of this title 34 before August 6, 1999. 35

2. The Arizona board of regents GOVERNING BOARD OF A UNIVERSITY and 36 THE schools, colleges, institutions and universities UNIVERSITY under its 37 control if the Arizona board of regents GOVERNING BOARD adopts rules or 38 policies governing the award of grants that encourage as much competition 39 as practicable. 40

3. Grants made by the cotton research and protection council for 41 research programs related to cotton production or protection. 42

4. Grants made by the Arizona iceberg lettuce research council for 43 research programs under section 3-526.02, subsection C, paragraph 3 or 5. 44

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5. Grants made by the Arizona citrus research council for research 1 programs under section 3-468.02, subsection C, paragraph 3 or 5. 2

6. Grants made by the Arizona grain research and promotion council 3 for research projects and programs under section 3-584, subsection C, 4 paragraph 5. 5

7. Grants made under section 3-268, subsection C. 6 8. Grants made by the Arizona commerce authority from the Arizona 7

competes fund pursuant to chapter 10, article 5 of this title. With 8 respect to other grants, the authority shall adopt policies, procedures 9 and practices, in consultation with the department of administration, that 10 are similar to and based on the policies and procedures prescribed by this 11 chapter for the purpose of increased public confidence, fair and equitable 12 treatment of all persons engaged in the process and fostering broad 13 competition while accomplishing flexibility to achieve the authority's 14 statutory requirements. The authority shall make its policies, procedures 15 and practices available to the public. 16

9. Grants of less than five thousand dollars from the veterans' 17 donations fund if the department of veterans' services adopts rules or 18 policies governing these grants that encourage as much competition as 19 practicable. 20


41-2751. Definitions 23 In this article, unless the context otherwise requires: 24 1. "Governing board" means the Arizona board of regents for the 25

universities GOVERNING BOARD OF A UNIVERSITY or any community college 26 district governing board. 27

2. "Invited guests" means persons who enter onto a campus for an 28 educational, research or public service activity and not primarily to 29 purchase or receive goods and services not related to the educational, 30 research or public service activity for which such persons enter onto the 31 campus. 32

3. "Private enterprise" means an individual, firm, partnership, 33 joint venture, corporation, association or any other legal entity engaging 34 in the manufacturing, processing, sale, offering for sale, rental, 35 leasing, delivery, dispensing, distributing or advertising of goods or 36 services for profit. 37

4. "Public service" means an activity that is normally and 38 generally associated with community colleges and universities in this 39 state, a purpose or significant result of which is not to engage in 40 competition with private enterprise. 41

5. "State agency" means a department, office, commission, 42 institution, board or other agency of state organization regardless of 43 whether monies are appropriated to the agency. 44

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41-2771. Definitions 3 In this article, unless the context otherwise requires: 4 1. "Competitive government process" means the process, as developed 5

by the governor's office of management and budget STRATEGIC PLANNING AND 6 BUDGETING, THAT IS designed to standardize the methodology for how the 7 state identifies and evaluates state functions to determine if WHETHER 8 future competitive contracting with the private sector and other state 9 agencies is in the best interest of this state. 10

2. "Competitive government program" means the program, as developed 11 by the governor's office of management and budget STRATEGIC PLANNING AND 12 BUDGETING, THAT IS designed to manage the process of introducing private 13 sector and interagency competition into the delivery of state goods and 14 services. 15

3. "Function" means a good or service that is provided through the 16 direct efforts of state employees. 17

4. "Office" means the governor's office of management and budget, 18 STRATEGIC PLANNING AND BUDGETING THAT IS established by executive order, 19 or its successor. 20

5. "Privatization" means the utilization of a private sector entity 21 in the delivery of goods and services currently provided by a state 22 function or program. 23

6. "Relevant costs" means those costs that relate to a target 24 function that can be eliminated if the target function is transferred to 25 another agency or the private sector. 26

7. "State agency" means any executive department, office, 27 commission, institution, board or other executive agency of state 28 organization regardless of whether monies are appropriated to the agency. 29 State agency does not include the Arizona board of regents GOVERNING 30 BOARDS OF THE UNIVERSITIES, the PUBLIC universities under its jurisdiction 31 or community college districts. 32

8. "Target function" means a current state function that has been 33 identified for review through the competitive government process. 34

9. "Total costs" means all costs borne by an agency to provide a 35 state function including all indirect costs and applicable allocated 36 costs. 37


41-2772. Arizona state competitive government program; annual 40 report 41

A. A statewide competitive government program shall be established 42 within the governor's office of management and budget STRATEGIC PLANNING 43 AND BUDGETING. The program shall emphasize this state's fiduciary 44 responsibility to taxpayers by encouraging value in the provision and 45

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delivery of state services by identifying and pursuing opportunities for 1 increasing the use of market forces in the delivery of state services, 2 while preventing unfair competition between state agencies and the private 3 sector. 4

B. The competitive government process shall be utilized USED 5 whenever a state agency chooses to, or is compelled to, privatize a state 6 function or program THAT IS currently provided through the direct use of 7 state employees. 8

C. The Arizona board of regents GOVERNING BOARDS OF THE 9 UNIVERSITIES and the community college districts shall develop a program 10 comparable to the competitive government program for themselves and 11 institutions under their jurisdiction and shall present a report to the 12 office on or before October 1 of each year that contains a summary of all 13 activities conducted by the Arizona board of regents GOVERNING BOARDS OF 14 THE UNIVERSITIES and community college districts relating to competitive 15 government activities. The office may require oral or written status 16 reports relating to competitive government activities from the state 17 agencies as deemed necessary. 18


41-3022.12. Arizona board of regents; termination July 1, 21 2022 22

Subject to approval by the voters of a constitutional amendment 23 repealing the authority for the board pursuant to article XI, section 5, 24 Constitution of Arizona, : 25

1. the Arizona board of regents terminates on July 1, 2022. 26 2. Title 15, chapter 13, article 2 is repealed on January 1, 2023. 27 Sec. 180. Title 41, chapter 27, article 2, Arizona Revised 28

Statutes, is amended by adding sections 41-3028.01, 41-3028.02 and 29 41-3028.03, to read: 30

41-3028.01. Governing board for the university of Arizona; 31 termination July 1, 2028 32

A. THE GOVERNING BOARD FOR THE UNIVERSITY OF ARIZONA TERMINATES ON 33 JULY 1, 2028. 34

B. TITLE 15, CHAPTER 13, ARTICLE 2 AND THIS SECTION ARE REPEALED ON 35 JANUARY 1, 2029. 36

41-3028.02. Governing board for Arizona state university; 37 termination July 1, 2028 38

A. THE GOVERNING BOARD FOR ARIZONA STATE UNIVERSITY TERMINATES ON 39 JULY 1, 2028. 40


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41-3028.03. Governing board for northern Arizona university; 1 termination July 1, 2028 2

A. THE GOVERNING BOARD FOR NORTHERN ARIZONA UNIVERSITY TERMINATES 3 ON JULY 1, 2028. 4



41-5404. Workforce data task force; membership; duties; 9 report; task force termination 10

A. The workforce data task force is established in the office of 11 economic opportunity to oversee workforce system evaluation data sharing. 12 The task force shall consist of the following members: 13

1. The director of the office of economic opportunity, or the 14 director's designee, who shall serve as chairperson of the task force. 15

2. The director of the department of economic security or the 16 director's designee. 17

3. The superintendent of public instruction or the superintendent's 18 designee. 19

4. The president of the Arizona board of regents or the president's 20 designee. 21

4. A MEMBER OF THE GOVERNING BOARD OF A UNIVERSITY WHO IS SELECTED 22 BY THE GOVERNING BOARDS OF THE UNIVERSITIES. 23

5. A representative of a community college district or the 24 representative's designee. 25

B. The director of the office of economic opportunity may appoint 26 advisory members to the task force as necessary. 27

C. Members of the task force are not eligible to receive 28 compensation. The office of economic opportunity shall provide adequate 29 staff support for the task force. 30

D. The task force shall: 31 1. Oversee development and maintenance of the state workforce 32

evaluation data system. 33 2. Define and regularly review requirements, structures and 34

methodologies for the system, including: 35 (a) A retention schedule for unemployment insurance records that 36

supports the longitudinal evaluation of workforce and education programs. 37 (b) Data standards relating to unemployment insurance data, 38

including rules for definition, format, source, provenance, element level 39 and contextual integrity. 40

(c) Technical requirements for the storage, handling and 41 distribution of data. 42

(d) System performance expectations. 43 (e) Controls for data confidentiality and data security for 44

unemployment data, including when data is in transmission. 45

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(f) Data quality and reporting standards. 1 (g) Required elements for data sharing agreements that conform to 2

relevant state and federal requirements and that establish adequacy of 3 receiving system requirements. 4

(h) A methodology to fund the development and ongoing database 5 costs from existing resources of entities that have entered into current 6 data sharing agreements pursuant to section 23-722.04. 7

3. Provide analyses and recommendations for all of the following: 8 (a) Data audit management, including data quality metrics, 9

sanctions and incentives for data quality improvement. 10 (b) Documentation standards for data elements and systems 11

components. 12 (c) Data archival and retrieval management systems, including 13

change control and change tracking. 14 (d) Publication of standard and ad hoc reports for state and local 15

level use on workforce system performance. 16 4. Submit an annual report regarding the task force's activities on 17

or before November 1 to the governor, the president of the senate and the 18 speaker of the house of representatives and provide a copy of this report 19 to the secretary of state. The initial report shall include all initial 20 requirements, structures and methodologies determined pursuant to this 21 section. 22

E. The task force established by this section ends on July 1, 2024 23 pursuant to section 41-3103. 24


42-5032.01. Distribution of revenues for tourism and sports 27 authority 28

A. Each month the state treasurer shall pay, from the amount 29 designated as distribution base pursuant to section 42-5029, subsection D, 30 the amount determined under subsection B of this section to the tourism 31 and sports authority for deposit in the authority's facility revenue 32 clearing account established by section 5-834. 33

B. The amount to be paid under subsection A of this section is the 34 total amount of state transaction privilege tax revenues received from 35 persons conducting business under: 36

1. The retail, amusement and restaurant classifications at, or with 37 respect to events held at, a multipurpose facility that is owned or 38 operated by the authority pursuant to title 5, chapter 8. 39

2. The retail, amusement and restaurant classifications at, or with 40 respect to, professional football contests that are held beginning July 41 2001 in a stadium located on the campus of an institution under the 42 jurisdiction of the Arizona board of regents A PUBLIC UNIVERSITY IN THIS 43 STATE. 44

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C. Each month the state treasurer shall pay, from the amount 1 designated as distribution base pursuant to section 42-5029, subsection D, 2 the total amount of state transaction privilege tax revenues received from 3 persons conducting business under the prime contracting classification at 4 a multipurpose facility that is owned or operated by the tourism and 5 sports authority pursuant to title 5, chapter 8 for deposit in the 6 authority's construction account established by section 5-833. 7


42-5061. Retail classification; definitions 10 A. The retail classification is comprised of the business of 11

selling tangible personal property at retail. The tax base for the retail 12 classification is the gross proceeds of sales or gross income derived from 13 the business. The tax imposed on the retail classification does not apply 14 to the gross proceeds of sales or gross income from: 15

1. Professional or personal service occupations or businesses that 16 involve sales or transfers of tangible personal property only as 17 inconsequential elements. 18

2. Services rendered in addition to selling tangible personal 19 property at retail. 20

3. Sales of warranty or service contracts. The storage, use or 21 consumption of tangible personal property provided under the conditions of 22 such contracts is subject to tax under section 42-5156. 23

4. Sales of tangible personal property by any nonprofit 24 organization organized and operated exclusively for charitable purposes 25 and recognized by the United States internal revenue service under section 26 501(c)(3) of the internal revenue code. 27

5. Sales to persons engaged in business classified under the 28 restaurant classification of articles used by human beings for food, drink 29 or condiment, whether simple, mixed or compounded. 30

6. Business activity that is properly included in any other 31 business classification that is taxable under this article. 32

7. The sale of stocks and bonds. 33 8. Drugs and medical oxygen, including delivery hose, mask or tent, 34

regulator and tank, on the prescription of a member of the medical, dental 35 or veterinarian profession who is licensed by law to administer such 36 substances. 37

9. Prosthetic appliances as defined in section 23-501 and as 38 prescribed or recommended by a health professional who is licensed 39 pursuant to title 32, chapter 7, 8, 11, 13, 14, 15, 16, 17 or 29. 40

10. Insulin, insulin syringes and glucose test strips. 41 11. Prescription eyeglasses or contact lenses. 42 12. Hearing aids as defined in section 36-1901. 43 13. Durable medical equipment that has a centers for medicare and 44

medicaid services common procedure code, is designated reimbursable by 45

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medicare, is prescribed by a person who is licensed under title 32, 1 chapter 7, 8, 13, 14, 15, 17 or 29, can withstand repeated use, is 2 primarily and customarily used to serve a medical purpose, is generally 3 not useful to a person in the absence of illness or injury and is 4 appropriate for use in the home. 5

14. Sales of motor vehicles to nonresidents of this state for use 6 outside this state if the motor vehicle dealer ships or delivers the motor 7 vehicle to a destination out of this state. 8

15. Food, as provided in and subject to the conditions of article 3 9 of this chapter and section 42-5074. 10

16. Items purchased with United States department of agriculture 11 food stamp coupons issued under the food stamp act of 1977 (P.L. 95-113; 12 91 Stat. 958) or food instruments issued under section 17 of the child 13 nutrition act (P.L. 95-627; 92 Stat. 3603; P.L. 99-661, section 4302; 42 14 United States Code section 1786). 15

17. Textbooks by any bookstore that are required by any state 16 university or community college. 17

18. Food and drink to a person that is engaged in a business that 18 is classified under the restaurant classification and that provides such 19 food and drink without monetary charge to its employees for their own 20 consumption on the premises during the employees' hours of employment. 21

19. Articles of food, drink or condiment and accessory tangible 22 personal property to a school district or charter school if such articles 23 and accessory tangible personal property are to be prepared and served to 24 persons for consumption on the premises of a public school within the 25 district or on the premises of the charter school during school hours. 26

20. Lottery tickets or shares pursuant to title 5, chapter 5.1, 27 article 1. 28

21. The sale of cash equivalents and the sale of precious metal 29 bullion and monetized bullion to the ultimate consumer, but the sale of 30 coins or other forms of money for manufacture into jewelry or works of art 31 is subject to the tax and the gross proceeds of sales or gross income 32 derived from the redemption of any cash equivalent by the holder as a 33 means of payment for goods or services that are taxable under this article 34 is subject to the tax. For the purposes of this paragraph: 35

(a) "Cash equivalents" means items or intangibles, whether or not 36 negotiable, that are sold to one or more persons, through which a value 37 denominated in money is purchased in advance and may be redeemed in full 38 or in part for tangible personal property, intangibles or services. Cash 39 equivalents include gift cards, stored value cards, gift certificates, 40 vouchers, traveler's checks, money orders or other instruments, orders or 41 electronic mechanisms, such as an electronic code, personal identification 42 number or digital payment mechanism, or any other prepaid intangible right 43 to acquire tangible personal property, intangibles or services in the 44

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future, whether from the seller of the cash equivalent or from another 1 person. Cash equivalents do not include either of the following: 2

(i) Items or intangibles that are sold to one or more persons, 3 through which a value is not denominated in money. 4

(ii) Prepaid calling cards or prepaid authorization numbers for 5 telecommunications services made taxable by subsection P of this section. 6

(b) "Monetized bullion" means coins and other forms of money that 7 are manufactured from gold, silver or other metals and that have been or 8 are used as a medium of exchange in this or another state, the United 9 States or a foreign nation. 10

(c) "Precious metal bullion" means precious metal, including gold, 11 silver, platinum, rhodium and palladium, that has been smelted or refined 12 so that its value depends on its contents and not on its form. 13

22. Motor vehicle fuel and use fuel that are subject to a tax 14 imposed under title 28, chapter 16, article 1, sales of use fuel to a 15 holder of a valid single trip use fuel tax permit issued under section 16 28-5739, sales of aviation fuel that are subject to the tax imposed under 17 section 28-8344 and sales of jet fuel that are subject to the tax imposed 18 under article 8 of this chapter. 19

23. Tangible personal property sold to a person engaged in the 20 business of leasing or renting such property under the personal property 21 rental classification if such property is to be leased or rented by such 22 person. 23

24. Tangible personal property sold in interstate or foreign 24 commerce if prohibited from being so taxed by the constitution of the 25 United States or the constitution of this state. 26

25. Tangible personal property sold to: 27 (a) A qualifying hospital as defined in section 42-5001. 28 (b) A qualifying health care organization as defined in section 29

42-5001 if the tangible personal property is used by the organization 30 solely to provide health and medical related educational and charitable 31 services. 32

(c) A qualifying health care organization as defined in section 33 42-5001 if the organization is dedicated to providing educational, 34 therapeutic, rehabilitative and family medical education training for 35 blind and visually impaired children and children with multiple 36 disabilities from the time of birth to age twenty-one. 37

(d) A qualifying community health center as defined in section 38 42-5001. 39

(e) A nonprofit charitable organization that has qualified under 40 section 501(c)(3) of the internal revenue code and that regularly serves 41 meals to the needy and indigent on a continuing basis at no cost. 42

(f) For taxable periods beginning from and after June 30, 2001, a 43 nonprofit charitable organization that has qualified under section 44 501(c)(3) of the internal revenue code and that provides residential 45

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apartment housing for low income persons over sixty-two years of age in a 1 facility that qualifies for a federal housing subsidy, if the tangible 2 personal property is used by the organization solely to provide 3 residential apartment housing for low income persons over sixty-two years 4 of age in a facility that qualifies for a federal housing subsidy. 5

(g) A qualifying health sciences educational institution as defined 6 in section 42-5001. 7

(h) Any person representing or working on behalf of another person 8 described in subdivisions (a) through (g) of this paragraph if the 9 tangible personal property is incorporated or fabricated into a project 10 described in section 42-5075, subsection O. 11

26. Magazines or other periodicals or other publications by this 12 state to encourage tourist travel. 13

27. Tangible personal property sold to: 14 (a) A person that is subject to tax under this article by reason of 15

being engaged in business classified under section 42-5075 or to a 16 subcontractor working under the control of a person engaged in business 17 classified under section 42-5075, if the property so sold is any of the 18 following: 19

(i) Incorporated or fabricated by the person into any real 20 property, structure, project, development or improvement as part of the 21 business. 22

(ii) Incorporated or fabricated by the person into any project 23 described in section 42-5075, subsection O. 24

(iii) Used in environmental response or remediation activities 25 under section 42-5075, subsection B, paragraph 6. 26

(b) A person that is not subject to tax under section 42-5075 and 27 that has been provided a copy of a certificate under section 42-5009, 28 subsection L, if the property so sold is incorporated or fabricated by the 29 person into the real property, structure, project, development or 30 improvement described in the certificate. 31

28. The sale of a motor vehicle to: 32 (a) A nonresident of this state if the purchaser's state of 33

residence does not allow a corresponding use tax exemption to the tax 34 imposed by article 1 of this chapter and if the nonresident has secured a 35 special ninety day nonresident registration permit for the vehicle as 36 prescribed by sections 28-2154 and 28-2154.01. 37

(b) An enrolled member of an Indian tribe who resides on the Indian 38 reservation established for that tribe. 39

29. Tangible personal property purchased in this state by a 40 nonprofit charitable organization that has qualified under section 41 501(c)(3) of the United States internal revenue code and that engages in 42 and uses such property exclusively in programs for persons with mental or 43 physical disabilities if the programs are exclusively for training, job 44 placement, rehabilitation or testing. 45

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30. Sales of tangible personal property by a nonprofit organization 1 that is exempt from taxation under section 501(c)(3), 501(c)(4) or 2 501(c)(6) of the internal revenue code if the organization is associated 3 with a major league baseball team or a national touring professional 4 golfing association and no part of the organization's net earnings inures 5 to the benefit of any private shareholder or individual. 6

31. Sales of commodities, as defined by title 7 United States Code 7 section 2, that are consigned for resale in a warehouse in this state in 8 or from which the commodity is deliverable on a contract for future 9 delivery subject to the rules of a commodity market regulated by the 10 United States commodity futures trading commission. 11

32. Sales of tangible personal property by a nonprofit organization 12 that is exempt from taxation under section 501(c)(3), 501(c)(4), 13 501(c)(6), 501(c)(7) or 501(c)(8) of the internal revenue code if the 14 organization sponsors or operates a rodeo featuring primarily farm and 15 ranch animals and no part of the organization's net earnings inures to the 16 benefit of any private shareholder or individual. 17

33. Sales of seeds, seedlings, roots, bulbs, cuttings and other 18 propagative material to persons who use those items to commercially 19 produce agricultural, horticultural, viticultural or floricultural crops 20 in this state. 21

34. Machinery, equipment, technology or related supplies that are 22 only useful to assist a person with a physical disability as defined in 23 section 46-191 or a person who has a developmental disability as defined 24 in section 36-551 or has a head injury as defined in section 41-3201 to be 25 more independent and functional. 26

35. Sales of natural gas or liquefied petroleum gas used to propel 27 a motor vehicle. 28

36. Paper machine clothing, such as forming fabrics and dryer 29 felts, sold to a paper manufacturer and directly used or consumed in paper 30 manufacturing. 31

37. Coal, petroleum, coke, natural gas, virgin fuel oil and 32 electricity sold to a qualified environmental technology manufacturer, 33 producer or processor as defined in section 41-1514.02 and directly used 34 or consumed in the generation or provision of on-site power or energy 35 solely for environmental technology manufacturing, producing or processing 36 or environmental protection. This paragraph shall apply for twenty full 37 consecutive calendar or fiscal years from the date the first paper 38 manufacturing machine is placed in service. In the case of an 39 environmental technology manufacturer, producer or processor who does not 40 manufacture paper, the time period shall begin with the date the first 41 manufacturing, processing or production equipment is placed in service. 42

38. Sales of liquid, solid or gaseous chemicals used in 43 manufacturing, processing, fabricating, mining, refining, metallurgical 44 operations, research and development and, beginning on January 1, 1999, 45

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printing, if using or consuming the chemicals, alone or as part of an 1 integrated system of chemicals, involves direct contact with the materials 2 from which the product is produced for the purpose of causing or 3 permitting a chemical or physical change to occur in the materials as part 4 of the production process. This paragraph does not include chemicals that 5 are used or consumed in activities such as packaging, storage or 6 transportation but does not affect any deduction for such chemicals that 7 is otherwise provided by this section. For the purposes of this 8 paragraph, "printing" means a commercial printing operation and includes 9 job printing, engraving, embossing, copying and bookbinding. 10

39. Through December 31, 1994, personal property liquidation 11 transactions, conducted by a personal property liquidator. From and after 12 December 31, 1994, personal property liquidation transactions shall be 13 taxable under this section provided that nothing in this subsection shall 14 be construed to authorize the taxation of casual activities or 15 transactions under this chapter. For the purposes of this paragraph: 16

(a) "Personal property liquidation transaction" means a sale of 17 personal property made by a personal property liquidator acting solely on 18 behalf of the owner of the personal property sold at the dwelling of the 19 owner or on the death of any owner, on behalf of the surviving spouse, if 20 any, any devisee or heir or the personal representative of the estate of 21 the deceased, if one has been appointed. 22

(b) "Personal property liquidator" means a person who is retained 23 to conduct a sale in a personal property liquidation transaction. 24

40. Sales of food, drink and condiment for consumption within the 25 premises of any prison, jail or other institution under the jurisdiction 26 of the state department of corrections, the department of public safety, 27 the department of juvenile corrections or a county sheriff. 28

41. A motor vehicle and any repair and replacement parts and 29 tangible personal property becoming a part of such motor vehicle sold to a 30 motor carrier who is subject to a fee prescribed in title 28, chapter 16, 31 article 4 and who is engaged in the business of leasing or renting such 32 property. 33

42. Sales of: 34 (a) Livestock and poultry to persons engaging in the businesses of 35

farming, ranching or producing livestock or poultry. 36 (b) Livestock and poultry feed, salts, vitamins and other additives 37

for livestock or poultry consumption that are sold to persons for use or 38 consumption by their own livestock or poultry, for use or consumption in 39 the businesses of farming, ranching and producing or feeding livestock, 40 poultry, or livestock or poultry products or for use or consumption in 41 noncommercial boarding of livestock. For the purposes of this paragraph, 42 "poultry" includes ratites. 43

43. Sales of implants used as growth promotants and injectable 44 medicines, not already exempt under paragraph 8 of this subsection, for 45

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livestock or poultry owned by or in possession of persons who are engaged 1 in producing livestock, poultry, or livestock or poultry products or who 2 are engaged in feeding livestock or poultry commercially. For the 3 purposes of this paragraph, "poultry" includes ratites. 4

44. Sales of motor vehicles at auction to nonresidents of this 5 state for use outside this state if the vehicles are shipped or delivered 6 out of this state, regardless of where title to the motor vehicles passes 7 or its free on board point. 8

45. Tangible personal property sold to a person engaged in business 9 and subject to tax under the transient lodging classification if the 10 tangible personal property is a personal hygiene item or articles used by 11 human beings for food, drink or condiment, except alcoholic beverages, 12 that are furnished without additional charge to and intended to be 13 consumed by the transient during the transient's occupancy. 14

46. Sales of alternative fuel, as defined in section 1-215, to a 15 used oil fuel burner who has received a permit to burn used oil or used 16 oil fuel under section 49-426 or 49-480. 17

47. Sales of materials that are purchased by or for publicly funded 18 libraries including school district libraries, charter school libraries, 19 community college libraries, state university libraries or federal, state, 20 county or municipal libraries for use by the public as follows: 21

(a) Printed or photographic materials, beginning August 7, 1985. 22 (b) Electronic or digital media materials, beginning July 17, 1994. 23 48. Tangible personal property sold to a commercial airline and 24

consisting of food, beverages and condiments and accessories used for 25 serving the food and beverages, if those items are to be provided without 26 additional charge to passengers for consumption in flight. For the 27 purposes of this paragraph, "commercial airline" means a person holding a 28 federal certificate of public convenience and necessity or foreign air 29 carrier permit for air transportation to transport persons, property or 30 United States mail in intrastate, interstate or foreign commerce. 31

49. Sales of alternative fuel vehicles if the vehicle was 32 manufactured as a diesel fuel vehicle and converted to operate on 33 alternative fuel and equipment that is installed in a conventional diesel 34 fuel motor vehicle to convert the vehicle to operate on an alternative 35 fuel, as defined in section 1-215. 36

50. Sales of any spirituous, vinous or malt liquor by a person that 37 is licensed in this state as a wholesaler by the department of liquor 38 licenses and control pursuant to title 4, chapter 2, article 1. 39

51. Sales of tangible personal property to be incorporated or 40 installed as part of environmental response or remediation activities 41 under section 42-5075, subsection B, paragraph 6. 42

52. Sales of tangible personal property by a nonprofit organization 43 that is exempt from taxation under section 501(c)(6) of the internal 44 revenue code if the organization produces, organizes or promotes cultural 45

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or civic related festivals or events and no part of the organization's net 1 earnings inures to the benefit of any private shareholder or individual. 2

53. Application services that are designed to assess or test 3 student learning or to promote curriculum design or enhancement purchased 4 by or for any school district, charter school, community college or state 5 university. For the purposes of this paragraph: 6

(a) "Application services" means software applications provided 7 remotely using hypertext transfer protocol or another network protocol. 8

(b) "Curriculum design or enhancement" means planning, implementing 9 or reporting on courses of study, lessons, assignments or other learning 10 activities. 11

54. Sales of motor vehicle fuel and use fuel to a qualified 12 business under section 41-1516 for off-road use in harvesting, processing 13 or transporting qualifying forest products removed from qualifying 14 projects as defined in section 41-1516. 15

55. Sales of repair parts installed in equipment used directly by a 16 qualified business under section 41-1516 in harvesting, processing or 17 transporting qualifying forest products removed from qualifying projects 18 as defined in section 41-1516. 19

56. Sales or other transfers of renewable energy credits or any 20 other unit created to track energy derived from renewable energy 21 resources. For the purposes of this paragraph, "renewable energy credit" 22 means a unit created administratively by the corporation commission or 23 governing body of a public power utility to track kilowatt hours of 24 electricity derived from a renewable energy resource or the kilowatt hour 25 equivalent of conventional energy resources displaced by distributed 26 renewable energy resources. 27

57. Computer data center equipment sold to the owner, operator or 28 qualified colocation tenant of a computer data center that is certified by 29 the Arizona commerce authority under section 41-1519 or an authorized 30 agent of the owner, operator or qualified colocation tenant during the 31 qualification period for use in the qualified computer data center. For 32 the purposes of this paragraph, "computer data center", "computer data 33 center equipment", "qualification period" and "qualified colocation 34 tenant" have the same meanings prescribed in section 41-1519. 35

58. Orthodontic devices dispensed by a dental professional who is 36 licensed under title 32, chapter 11 to a patient as part of the practice 37 of dentistry. 38

59. Sales of tangible personal property incorporated or fabricated 39 into a project described in section 42-5075, subsection O, that is located 40 within the exterior boundaries of an Indian reservation for which the 41 owner, as defined in section 42-5075, of the project is an Indian tribe or 42 an affiliated Indian. For the purposes of this paragraph: 43

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(a) "Affiliated Indian" means an individual native American Indian 1 who is duly registered on the tribal rolls of the Indian tribe for whose 2 benefit the Indian reservation was established. 3

(b) "Indian reservation" means all lands that are within the limits 4 of areas set aside by the United States for the exclusive use and 5 occupancy of an Indian tribe by treaty, law or executive order and that 6 are recognized as Indian reservations by the United States department of 7 the interior. 8

(c) "Indian tribe" means any organized nation, tribe, band or 9 community that is recognized as an Indian tribe by the United States 10 department of the interior and includes any entity formed under the laws 11 of the Indian tribe. 12

60. Sales of works of fine art, as defined in section 44-1771, at 13 an art auction or gallery in this state to nonresidents of this state for 14 use outside this state if the vendor ships or delivers the work of fine 15 art to a destination outside this state. 16

B. In addition to the deductions from the tax base prescribed by 17 subsection A of this section, the gross proceeds of sales or gross income 18 derived from sales of the following categories of tangible personal 19 property shall be deducted from the tax base: 20

1. Machinery, or equipment, used directly in manufacturing, 21 processing, fabricating, job printing, refining or metallurgical 22 operations. The terms "manufacturing", "processing", "fabricating", "job 23 printing", "refining" and "metallurgical" as used in this paragraph refer 24 to and include those operations commonly understood within their ordinary 25 meaning. "Metallurgical operations" includes leaching, milling, 26 precipitating, smelting and refining. 27

2. Mining machinery, or equipment, used directly in the process of 28 extracting ores or minerals from the earth for commercial purposes, 29 including equipment required to prepare the materials for extraction and 30 handling, loading or transporting such extracted material to the surface. 31 "Mining" includes underground, surface and open pit operations for 32 extracting ores and minerals. 33

3. Tangible personal property sold to persons engaged in business 34 classified under the telecommunications classification, including a person 35 representing or working on behalf of such a person in a manner described 36 in section 42-5075, subsection O, and consisting of central office 37 switching equipment, switchboards, private branch exchange equipment, 38 microwave radio equipment and carrier equipment including optical fiber, 39 coaxial cable and other transmission media that are components of carrier 40 systems. 41

4. Machinery, equipment or transmission lines used directly in 42 producing or transmitting electrical power, but not including 43 distribution. Transformers and control equipment used at transmission 44

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substation sites constitute equipment used in producing or transmitting 1 electrical power. 2

5. Neat animals, horses, asses, sheep, ratites, swine or goats used 3 or to be used as breeding or production stock, including sales of 4 breedings or ownership shares in such animals used for breeding or 5 production. 6

6. Pipes or valves four inches in diameter or larger used to 7 transport oil, natural gas, artificial gas, water or coal slurry, 8 including compressor units, regulators, machinery and equipment, fittings, 9 seals and any other part that is used in operating the pipes or valves. 10

7. Aircraft, navigational and communication instruments and other 11 accessories and related equipment sold to: 12

(a) A person: 13 (i) Holding, or exempted by federal law from obtaining, a federal 14

certificate of public convenience and necessity for use as, in conjunction 15 with or becoming part of an aircraft to be used to transport persons for 16 hire in intrastate, interstate or foreign commerce. 17

(ii) That is certificated or licensed under federal aviation 18 administration regulations (14 Code of Federal Regulations part 121 or 19 135) as a scheduled or unscheduled carrier of persons for hire for use as 20 or in conjunction with or becoming part of an aircraft to be used to 21 transport persons for hire in intrastate, interstate or foreign commerce. 22

(iii) Holding a foreign air carrier permit for air transportation 23 for use as or in conjunction with or becoming a part of aircraft to be 24 used to transport persons, property or United States mail in intrastate, 25 interstate or foreign commerce. 26

(iv) Operating an aircraft to transport persons in any manner for 27 compensation or hire, or for use in a fractional ownership program that 28 meets the requirements of federal aviation administration regulations (14 29 Code of Federal Regulations part 91, subpart K), including as an air 30 carrier, a foreign air carrier or a commercial operator or under a 31 restricted category, within the meaning of 14 Code of Federal Regulations, 32 regardless of whether the operation or aircraft is regulated or certified 33 under part 91, 119, 121, 133, 135, 136 or 137, or another part of 14 Code 34 of Federal Regulations. 35

(v) That will lease or otherwise transfer operational control, 36 within the meaning of federal aviation administration operations 37 specification A008, or its successor, of the aircraft, instruments or 38 accessories to one or more persons described in item (i), (ii), (iii) or 39 (iv) of this subdivision, subject to section 42-5009, subsection Q. 40

(b) Any foreign government. 41 (c) Persons who are not residents of this state and who will not 42

use such property in this state other than in removing such property from 43 this state. This subdivision also applies to corporations that are not 44 incorporated in this state, regardless of maintaining a place of business 45

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in this state, if the principal corporate office is located outside this 1 state and the property will not be used in this state other than in 2 removing the property from this state. 3

8. Machinery, tools, equipment and related supplies used or 4 consumed directly in repairing, remodeling or maintaining aircraft, 5 aircraft engines or aircraft component parts by or on behalf of a 6 certificated or licensed carrier of persons or property. 7

9. Railroad rolling stock, rails, ties and signal control equipment 8 used directly to transport persons or property. 9

10. Machinery or equipment used directly to drill for oil or gas or 10 used directly in the process of extracting oil or gas from the earth for 11 commercial purposes. 12

11. Buses or other urban mass transit vehicles that are used 13 directly to transport persons or property for hire or pursuant to a 14 governmentally adopted and controlled urban mass transportation program 15 and that are sold to bus companies holding a federal certificate of 16 convenience and necessity or operated by any city, town or other 17 governmental entity or by any person contracting with such governmental 18 entity as part of a governmentally adopted and controlled program to 19 provide urban mass transportation. 20

12. Groundwater measuring devices required under section 45-604. 21 13. New machinery and equipment consisting of agricultural 22

aircraft, tractors, tractor-drawn implements, self-powered implements, 23 machinery and equipment necessary for extracting milk, and machinery and 24 equipment necessary for cooling milk and livestock, and drip irrigation 25 lines not already exempt under paragraph 6 of this subsection and that are 26 used for commercial production of agricultural, horticultural, 27 viticultural and floricultural crops and products in this state. For the 28 purposes of this paragraph: 29

(a) "New machinery and equipment" means machinery and equipment 30 that have never been sold at retail except pursuant to leases or rentals 31 that do not total two years or more. 32

(b) "Self-powered implements" includes machinery and equipment that 33 are electric-powered. 34

14. Machinery or equipment used in research and development. For 35 the purposes of this paragraph, "research and development" means basic and 36 applied research in the sciences and engineering, and designing, 37 developing or testing prototypes, processes or new products, including 38 research and development of computer software that is embedded in or an 39 integral part of the prototype or new product or that is required for 40 machinery or equipment otherwise exempt under this section to function 41 effectively. Research and development do not include manufacturing 42 quality control, routine consumer product testing, market research, sales 43 promotion, sales service, research in social sciences or psychology, 44 computer software research that is not included in the definition of 45

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research and development, or other nontechnological activities or 1 technical services. 2

15. Tangible personal property that is used by either of the 3 following to receive, store, convert, produce, generate, decode, encode, 4 control or transmit telecommunications information: 5

(a) Any direct broadcast satellite television or data transmission 6 service that operates pursuant to 47 Code of Federal Regulations part 25. 7

(b) Any satellite television or data transmission facility, if both 8 of the following conditions are met: 9

(i) Over two-thirds of the transmissions, measured in megabytes, 10 transmitted by the facility during the test period were transmitted to or 11 on behalf of one or more direct broadcast satellite television or data 12 transmission services that operate pursuant to 47 Code of Federal 13 Regulations part 25. 14

(ii) Over two-thirds of the transmissions, measured in megabytes, 15 transmitted by or on behalf of those direct broadcast television or data 16 transmission services during the test period were transmitted by the 17 facility to or on behalf of those services. 18 For the purposes of subdivision (b) of this paragraph, "test period" means 19 the three hundred sixty-five day period beginning on the later of the date 20 on which the tangible personal property is purchased or the date on which 21 the direct broadcast satellite television or data transmission service 22 first transmits information to its customers. 23

16. Clean rooms that are used for manufacturing, processing, 24 fabrication or research and development, as defined in paragraph 14 of 25 this subsection, of semiconductor products. For the purposes of this 26 paragraph, "clean room" means all property that comprises or creates an 27 environment where humidity, temperature, particulate matter and 28 contamination are precisely controlled within specified parameters, 29 without regard to whether the property is actually contained within that 30 environment or whether any of the property is affixed to or incorporated 31 into real property. Clean room: 32

(a) Includes the integrated systems, fixtures, piping, movable 33 partitions, lighting and all property that is necessary or adapted to 34 reduce contamination or to control airflow, temperature, humidity, 35 chemical purity or other environmental conditions or manufacturing 36 tolerances, as well as the production machinery and equipment operating in 37 conjunction with the clean room environment. 38

(b) Does not include the building or other permanent, nonremovable 39 component of the building that houses the clean room environment. 40

17. Machinery and equipment used directly in the feeding of 41 poultry, the environmental control of housing for poultry, the movement of 42 eggs within a production and packaging facility or the sorting or cooling 43 of eggs. This exemption does not apply to vehicles used for transporting 44 eggs. 45

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18. Machinery or equipment, including related structural 1 components, that is employed in connection with manufacturing, processing, 2 fabricating, job printing, refining, mining, natural gas pipelines, 3 metallurgical operations, telecommunications, producing or transmitting 4 electricity or research and development and that is used directly to meet 5 or exceed rules or regulations adopted by the federal energy regulatory 6 commission, the United States environmental protection agency, the United 7 States nuclear regulatory commission, the Arizona department of 8 environmental quality or a political subdivision of this state to prevent, 9 monitor, control or reduce land, water or air pollution. 10

19. Machinery and equipment that are sold to a person engaged in 11 the commercial production of livestock, livestock products or 12 agricultural, horticultural, viticultural or floricultural crops or 13 products in this state, including a person representing or working on 14 behalf of such a person in a manner described in section 42-5075, 15 subsection O, if the machinery and equipment are used directly and 16 primarily to prevent, monitor, control or reduce air, water or land 17 pollution. 18

20. Machinery or equipment that enables a television station to 19 originate and broadcast or to receive and broadcast digital television 20 signals and that was purchased to facilitate compliance with the 21 telecommunications act of 1996 (P.L. 104-104; 110 Stat. 56; 47 United 22 States Code section 336) and the federal communications commission order 23 issued April 21, 1997 (47 Code of Federal Regulations part 73). This 24 paragraph does not exempt any of the following: 25

(a) Repair or replacement parts purchased for the machinery or 26 equipment described in this paragraph. 27

(b) Machinery or equipment purchased to replace machinery or 28 equipment for which an exemption was previously claimed and taken under 29 this paragraph. 30

(c) Any machinery or equipment purchased after the television 31 station has ceased analog broadcasting, or purchased after November 1, 32 2009, whichever occurs first. 33

21. Qualifying equipment that is purchased from and after June 30, 34 2004 through June 30, 2024 by a qualified business under section 41-1516 35 for harvesting or processing qualifying forest products removed from 36 qualifying projects as defined in section 41-1516. To qualify for this 37 deduction, the qualified business at the time of purchase must present its 38 certification approved by the department. 39

C. The deductions provided by subsection B of this section do not 40 include sales of: 41

1. Expendable materials. For the purposes of this paragraph, 42 expendable materials do not include any of the categories of tangible 43 personal property specified in subsection B of this section regardless of 44 the cost or useful life of that property. 45

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2. Janitorial equipment and hand tools. 1 3. Office equipment, furniture and supplies. 2 4. Tangible personal property used in selling or distributing 3

activities, other than the telecommunications transmissions described in 4 subsection B, paragraph 15 of this section. 5

5. Motor vehicles required to be licensed by this state, except 6 buses or other urban mass transit vehicles specifically exempted pursuant 7 to subsection B, paragraph 11 of this section, without regard to the use 8 of such motor vehicles. 9

6. Shops, buildings, docks, depots and all other materials of 10 whatever kind or character not specifically included as exempt. 11

7. Motors and pumps used in drip irrigation systems. 12 8. Machinery and equipment or other tangible personal property used 13

by a contractor in the performance of a contract. 14 D. In addition to the deductions from the tax base prescribed by 15

subsection A of this section, there shall be deducted from the tax base 16 the gross proceeds of sales or gross income derived from sales of 17 machinery, equipment, materials and other tangible personal property used 18 directly and predominantly to construct a qualified environmental 19 technology manufacturing, producing or processing facility as described in 20 section 41-1514.02. This subsection applies for ten full consecutive 21 calendar or fiscal years after the start of initial construction. 22

E. In computing the tax base, gross proceeds of sales or gross 23 income from retail sales of heavy trucks and trailers does not include any 24 amount attributable to federal excise taxes imposed by 26 United States 25 Code section 4051. 26

F. If a person is engaged in an occupation or business to which 27 subsection A of this section applies, the person's books shall be kept so 28 as to show separately the gross proceeds of sales of tangible personal 29 property and the gross income from sales of services, and if not so kept 30 the tax shall be imposed on the total of the person's gross proceeds of 31 sales of tangible personal property and gross income from services. 32

G. If a person is engaged in the business of selling tangible 33 personal property at both wholesale and retail, the tax under this section 34 applies only to the gross proceeds of the sales made other than at 35 wholesale if the person's books are kept so as to show separately the 36 gross proceeds of sales of each class, and if the books are not so kept, 37 the tax under this section applies to the gross proceeds of every sale so 38 made. 39

H. A person who engages in manufacturing, baling, crating, boxing, 40 barreling, canning, bottling, sacking, preserving, processing or otherwise 41 preparing for sale or commercial use any livestock, agricultural or 42 horticultural product or any other product, article, substance or 43 commodity and who sells the product of such business at retail in this 44

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state is deemed, as to such sales, to be engaged in business classified 1 under the retail classification. This subsection does not apply to: 2

1. Agricultural producers who are owners, proprietors or tenants of 3 agricultural lands, orchards, farms or gardens where agricultural products 4 are grown, raised or prepared for market and who are marketing their own 5 agricultural products. 6

2. Businesses classified under the: 7 (a) Transporting classification. 8 (b) Utilities classification. 9 (c) Telecommunications classification. 10 (d) Pipeline classification. 11 (e) Private car line classification. 12 (f) Publication classification. 13 (g) Job printing classification. 14 (h) Prime contracting classification. 15 (i) Restaurant classification. 16 I. The gross proceeds of sales or gross income derived from the 17

following shall be deducted from the tax base for the retail 18 classification: 19

1. Sales made directly to the United States government or its 20 departments or agencies by a manufacturer, modifier, assembler or 21 repairer. 22

2. Sales made directly to a manufacturer, modifier, assembler or 23 repairer if such sales are of any ingredient or component part of products 24 sold directly to the United States government or its departments or 25 agencies by the manufacturer, modifier, assembler or repairer. 26

3. Overhead materials or other tangible personal property that is 27 used in performing a contract between the United States government and a 28 manufacturer, modifier, assembler or repairer, including property used in 29 performing a subcontract with a government contractor who is a 30 manufacturer, modifier, assembler or repairer, to which title passes to 31 the government under the terms of the contract or subcontract. 32

4. Sales of overhead materials or other tangible personal property 33 to a manufacturer, modifier, assembler or repairer if the gross proceeds 34 of sales or gross income derived from the property by the manufacturer, 35 modifier, assembler or repairer will be exempt under paragraph 3 of this 36 subsection. 37

J. There shall be deducted from the tax base fifty percent of the 38 gross proceeds or gross income from any sale of tangible personal property 39 made directly to the United States government or its departments or 40 agencies that is not deducted under subsection I of this section. 41

K. The department shall require every person claiming a deduction 42 provided by subsection I or J of this section to file on forms prescribed 43 by the department at such times as the department directs a sworn 44

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statement disclosing the name of the purchaser and the exact amount of 1 sales on which the exclusion or deduction is claimed. 2

L. In computing the tax base, gross proceeds of sales or gross 3 income does not include: 4

1. A manufacturer's cash rebate on the sales price of a motor 5 vehicle if the buyer assigns the buyer's right in the rebate to the 6 retailer. 7

2. The waste tire disposal fee imposed pursuant to section 44-1302. 8 M. There shall be deducted from the tax base the amount received 9

from sales of solar energy devices. The retailer shall register with the 10 department as a solar energy retailer. By registering, the retailer 11 acknowledges that it will make its books and records relating to sales of 12 solar energy devices available to the department for examination. 13

N. In computing the tax base in the case of the sale or transfer of 14 wireless telecommunications equipment as an inducement to a customer to 15 enter into or continue a contract for telecommunications services that are 16 taxable under section 42-5064, gross proceeds of sales or gross income 17 does not include any sales commissions or other compensation received by 18 the retailer as a result of the customer entering into or continuing a 19 contract for the telecommunications services. 20

O. For the purposes of this section, a sale of wireless 21 telecommunications equipment to a person who holds the equipment for sale 22 or transfer to a customer as an inducement to enter into or continue a 23 contract for telecommunications services that are taxable under section 24 42-5064 is considered to be a sale for resale in the regular course of 25 business. 26

P. Retail sales of prepaid calling cards or prepaid authorization 27 numbers for telecommunications services, including sales of 28 reauthorization of a prepaid card or authorization number, are subject to 29 tax under this section. 30

Q. For the purposes of this section, the diversion of gas from a 31 pipeline by a person engaged in the business of: 32

1. Operating a natural or artificial gas pipeline, for the sole 33 purpose of fueling compressor equipment to pressurize the pipeline, is not 34 a sale of the gas to the operator of the pipeline. 35

2. Converting natural gas into liquefied natural gas, for the sole 36 purpose of fueling compressor equipment used in the conversion process, is 37 not a sale of gas to the operator of the compressor equipment. 38

R. For the purposes of this section, the transfer of title or 39 possession of coal from an owner or operator of a power plant to a person 40 in the business of refining coal is not a sale of coal if both of the 41 following apply: 42

1. The transfer of title or possession of the coal is for the 43 purpose of refining the coal. 44

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2. The title or possession of the coal is transferred back to the 1 owner or operator of the power plant after completion of the coal refining 2 process. For the purposes of this paragraph, "coal refining process" 3 means the application of a coal additive system that aids in the reduction 4 of power plant emissions during the combustion of coal and the treatment 5 of flue gas. 6

S. If a seller is entitled to a deduction pursuant to subsection B, 7 paragraph 15, subdivision (b) of this section, the department may require 8 the purchaser to establish that the requirements of subsection B, 9 paragraph 15, subdivision (b) of this section have been satisfied. If the 10 purchaser cannot establish that the requirements of subsection B, 11 paragraph 15, subdivision (b) of this section have been satisfied, the 12 purchaser is liable in an amount equal to any tax, penalty and interest 13 that the seller would have been required to pay under article 1 of this 14 chapter if the seller had not made a deduction pursuant to subsection B, 15 paragraph 15, subdivision (b) of this section. Payment of the amount 16 under this subsection exempts the purchaser from liability for any tax 17 imposed under article 4 of this chapter and related to the tangible 18 personal property purchased. The amount shall be treated as transaction 19 privilege tax to the purchaser and as tax revenues collected from the 20 seller to designate the distribution base pursuant to section 42-5029. 21

T. For the purposes of section 42-5032.01, the department shall 22 separately account for revenues collected under the retail classification 23 from businesses selling tangible personal property at retail: 24

1. On the premises of a multipurpose facility that is owned, leased 25 or operated by the tourism and sports authority pursuant to title 5, 26 chapter 8. 27

2. At professional football contests that are held in a stadium 28 located on the campus of an institution under the jurisdiction of the 29 Arizona board of regents A PUBLIC UNIVERSITY IN THIS STATE. 30

U. In computing the tax base for the sale of a motor vehicle to a 31 nonresident of this state, if the purchaser's state of residence allows a 32 corresponding use tax exemption to the tax imposed by article 1 of this 33 chapter and the rate of the tax in the purchaser's state of residence is 34 lower than the rate prescribed in article 1 of this chapter or if the 35 purchaser's state of residence does not impose an excise tax, and the 36 nonresident has secured a special ninety day nonresident registration 37 permit for the vehicle as prescribed by sections 28-2154 and 28-2154.01, 38 there shall be deducted from the tax base a portion of the gross proceeds 39 or gross income from the sale so that the amount of transaction privilege 40 tax that is paid in this state is equal to the excise tax that is imposed 41 by the purchaser's state of residence on the nonexempt sale or use of the 42 motor vehicle. 43

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V. For the purposes of this section: 1 1. "Agricultural aircraft" means an aircraft that is built for 2

agricultural use for the aerial application of pesticides or fertilizer or 3 for aerial seeding. 4

2. "Aircraft" includes: 5 (a) An airplane flight simulator that is approved by the federal 6

aviation administration for use as a phase II or higher flight simulator 7 under appendix H, 14 Code of Federal Regulations part 121. 8

(b) Tangible personal property that is permanently affixed or 9 attached as a component part of an aircraft that is owned or operated by a 10 certificated or licensed carrier of persons or property. 11

3. "Other accessories and related equipment" includes aircraft 12 accessories and equipment such as ground service equipment that physically 13 contact aircraft at some point during the overall carrier operation. 14

4. "Selling at retail" means a sale for any purpose other than for 15 resale in the regular course of business in the form of tangible personal 16 property, but transfer of possession, lease and rental as used in the 17 definition of sale mean only such transactions as are found on 18 investigation to be in lieu of sales as defined without the words lease or 19 rental. 20

W. For the purposes of subsection I of this section: 21 1. "Assembler" means a person who unites or combines products, 22

wares or articles of manufacture so as to produce a change in form or 23 substance without changing or altering the component parts. 24

2. "Manufacturer" means a person who is principally engaged in the 25 fabrication, production or manufacture of products, wares or articles for 26 use from raw or prepared materials, imparting to those materials new 27 forms, qualities, properties and combinations. 28

3. "Modifier" means a person who reworks, changes or adds to 29 products, wares or articles of manufacture. 30

4. "Overhead materials" means tangible personal property, the gross 31 proceeds of sales or gross income derived from that would otherwise be 32 included in the retail classification, and that are used or consumed in 33 the performance of a contract, the cost of which is charged to an overhead 34 expense account and allocated to various contracts based on generally 35 accepted accounting principles and consistent with government contract 36 accounting standards. 37

5. "Repairer" means a person who restores or renews products, wares 38 or articles of manufacture. 39

6. "Subcontract" means an agreement between a contractor and any 40 person who is not an employee of the contractor for furnishing of supplies 41 or services that, in whole or in part, are necessary to the performance of 42 one or more government contracts, or under which any portion of the 43 contractor's obligation under one or more government contracts is 44 performed, undertaken or assumed and that includes provisions causing 45

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title to overhead materials or other tangible personal property used in 1 the performance of the subcontract to pass to the government or that 2 includes provisions incorporating such title passing clauses in a 3 government contract into the subcontract. 4


42-5073. Amusement classification 7 A. The amusement classification is comprised of the business of 8

operating or conducting theaters, movies, operas, shows of any type or 9 nature, exhibitions, concerts, carnivals, circuses, amusement parks, 10 menageries, fairs, races, contests, games, billiard or pool parlors, 11 bowling alleys, public dances, dance halls, boxing and wrestling matches, 12 skating rinks, tennis courts, except as provided in subsection B of this 13 section, video games, pinball machines, OR sports events or any other 14 business charging admission or user fees for exhibition, amusement or 15 entertainment, including the operation or sponsorship of events by a 16 tourism and sports authority under title 5, chapter 8. For the purposes 17 of this section, admission or user fees include, but are not limited to, 18 any revenues derived from any form of contractual agreement for rights to 19 or use of premium or special seating facilities or arrangements. The 20 amusement classification does not include: 21

1. Activities or projects of bona fide religious or educational 22 institutions. 23

2. Private or group instructional activities. For the purposes of 24 this paragraph, "private or group instructional activities" includes, but 25 is not limited to, performing arts, martial arts, gymnastics and aerobic 26 instruction. 27

3. The operation or sponsorship of events by the Arizona exposition 28 and state fair board or county fair commissions. 29

4. A musical, dramatic or dance group or a botanical garden, museum 30 or zoo that is qualified as a nonprofit charitable organization under 31 section 501(c)(3) of the United States internal revenue code and if no 32 part of its net income inures to the benefit of any private shareholder or 33 individual. 34

5. Exhibition events in this state THAT ARE sponsored, conducted or 35 operated by a nonprofit organization that is exempt from taxation under 36 section 501(c)(3), 501(c)(4) or 501(c)(6) of the internal revenue code if 37 the organization is associated with major league baseball teams or a 38 national touring professional golfing association and no part of the 39 organization's net earnings inures to the benefit of any private 40 shareholder or individual. 41

6. Operating or sponsoring rodeos that feature primarily farm and 42 ranch animals in this state and that are sponsored, conducted or operated 43 by a nonprofit organization that is exempt from taxation under section 44 501(c)(3), 501(c)(4), 501(c)(6), 501(c)(7) or 501(c)(8) of the internal 45

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revenue code and IF no part of the organization's net earnings inures to 1 the benefit of any private shareholder or individual. 2

7. Sales of admissions to intercollegiate football contests if the 3 contests are both: 4

(a) Operated by a nonprofit organization that is exempt from 5 taxation under section 501(c)(3) of the internal revenue code and no part 6 of the organization's net earnings inures to the benefit of any private 7 shareholder or individual. 8

(b) Not held in a multipurpose facility that is owned or operated 9 by the tourism and sports authority pursuant to title 5, chapter 8. 10

8. Activities and events of, or fees and assessments received by, a 11 homeowners organization from persons who are members of the organization 12 or accompanied guests of members. For the purposes of this paragraph, 13 "homeowners organization" means a mandatory membership organization THAT 14 IS comprised of owners of residential property within a specified 15 residential real estate subdivision development or similar area and 16 established to own property for the benefit of its members where AND TO 17 WHICH both of the following apply: 18

(a) No part of the organization's net earnings inures to the 19 benefit of any private shareholder or individual. 20

(b) The primary purpose of the organization is to provide for the 21 acquisition, construction, management, maintenance or care of organization 22 property. 23

9. Activities and events of, or fees received by, a nonprofit 24 organization that is exempt from taxation under section 501(c)(6) of the 25 internal revenue code if the organization produces, organizes or promotes 26 cultural or civic related festivals or events and no part of the 27 organization's net earnings inures to the benefit of any private 28 shareholder or individual. 29

10. Arranging an amusement activity as a service to a person's 30 customers if that person is not otherwise engaged in the business of 31 operating or conducting an amusement personally or through others. This 32 exception does not apply to businesses that operate or conduct amusements 33 pursuant to customer orders and send the billings and receive the payments 34 associated with that activity, including when the amusement is performed 35 by third-party independent contractors. For the purposes of this 36 paragraph, "arranging" includes billing for or collecting amusement 37 charges from a person's customers on behalf of the persons providing the 38 amusement. 39

B. The tax base for the amusement classification is the gross 40 proceeds of sales or gross income derived from the business, except that 41 the following shall be deducted from the tax base: 42

1. The gross proceeds of sales or gross income derived from 43 memberships, including initiation fees, that provide for the right to use 44 a health or fitness establishment or a private recreational establishment, 45

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or any portion of an establishment, including tennis and other racquet 1 courts at that establishment, for participatory purposes for twenty-eight 2 days or more and fees charged for use of the health or fitness 3 establishment or private recreational establishment by bona fide 4 accompanied guests of members, except that this paragraph does not include 5 additional fees, other than initiation fees, charged by a health or 6 fitness establishment or a private recreational establishment for purposes 7 other than memberships that provide for the right to use a health or 8 fitness establishment or private recreational establishment, or any 9 portion of an establishment, for participatory purposes for twenty-eight 10 days or more and accompanied guest use fees. 11

2. Amounts that are exempt under section 5-111, subsection G. 12 3. The gross proceeds of sales or gross income derived from 13

membership fees, including initiation fees, that provide for the right to 14 use a transient lodging recreational establishment, including golf courses 15 and tennis and other racquet courts at that establishment, for 16 participatory purposes for twenty-eight days or more, except that this 17 paragraph does not include additional fees, other than initiation fees, 18 that are charged by a transient lodging recreational establishment for 19 purposes other than memberships and that provide for the right to use a 20 transient lodging recreational establishment or any portion of the 21 establishment for participatory purposes for twenty-eight days or more. 22

4. The gross proceeds of sales or gross income derived from sales 23 to persons engaged in the business of transient lodging classified under 24 section 42-5070, if all of the following apply: 25

(a) The persons who are engaged in the transient lodging business 26 sell the amusement to another person for consideration. 27

(b) The consideration received by the transient lodging business is 28 equal to or greater than the amount to be deducted under this subsection. 29

(c) The transient lodging business has provided an exemption 30 certificate to the person engaging in business under this section. 31

5. The gross proceeds of sales or gross income derived from: 32 (a) Business activity that is properly included in any other 33

business classification under this article and that is taxable to the 34 person engaged in that classification, but the gross proceeds of sales or 35 gross income to be deducted shall not exceed the consideration paid to the 36 person conducting the activity. 37

(b) Business activity that is arranged by the person who is subject 38 to tax under this section and that is not taxable to the person conducting 39 the activity due to an exclusion, exemption or deduction under this 40 section or section 42-5062, but the gross proceeds of sales or gross 41 income to be deducted shall not exceed the consideration paid to the 42 person conducting the activity. 43

(c) Business activity that is arranged by a person who is subject 44 to tax under this section and that is taxable to another person under this 45

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section who conducts the activity, but the gross proceeds of sales or 1 gross income to be deducted shall not exceed the consideration paid to the 2 person conducting the activity. 3

6. The gross proceeds of sales or gross income derived from entry 4 fees paid by participants for events that either: 5

(a) Until March 1, 2017, consist of a run, walk, swim or bicycle 6 ride or a similar event, or any combination of these events. 7

(b) Are operated or conducted by nonprofit organizations that are 8 exempt from taxation under section 501(c)(3) of the internal revenue code 9 and of which no part of the organization's net earnings inures to the 10 benefit of any private shareholder or individual, if the event consists of 11 a run, walk, swim or bicycle ride or a similar event, or any combination 12 of these events. 13

C. For the purposes of subsection B of this section: 14 1. "Health or fitness establishment" means a facility whose primary 15

purpose is to provide facilities, equipment, instruction or education to 16 promote the health and fitness of its members and WHERE at least eighty 17 percent of the monthly gross revenue of the facility is received through 18 accounts of memberships and accompanied guest use fees that provide for 19 the right to use the facility, or any portion of the facility, under the 20 terms of the membership agreement for participatory purposes for 21 twenty-eight days or more. 22

2. "Private recreational establishment" means a facility whose 23 primary purpose is to provide recreational facilities, such as tennis, 24 golf and swimming, for its members and where at least eighty percent of 25 the monthly gross revenue of the facility is received through accounts of 26 memberships and accompanied guest use fees that provide for the right to 27 use the facility, or any portion of the facility, for participatory 28 purposes for twenty-eight days or more. 29

3. "Transient lodging recreational establishment" means a facility 30 whose primary purpose is to provide facilities for transient lodging, that 31 is subject to taxation under this chapter and that also provides 32 recreational facilities, such as tennis, golf and swimming, for members 33 for a period of twenty-eight days or more. 34

D. Until December 31, 1988, the revenues from hayrides and other 35 animal-drawn amusement rides, from horseback riding and riding instruction 36 and from recreational tours using motor vehicles designed to operate on 37 and off public highways are exempt from the tax imposed by this section. 38 Beginning January 1, 1989, the gross proceeds or gross income from 39 hayrides and other animal-drawn amusement rides, from horseback riding and 40 from recreational tours using motor vehicles designed to operate on and 41 off public highways are subject to taxation under this section. Tax 42 liabilities, penalties and interest paid for taxable periods before 43 January 1, 1989 shall not be refunded unless the taxpayer requesting the 44

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refund provides proof satisfactory to the department that the taxes will 1 be returned to the customer. 2

E. If a person is engaged in the business of offering both 3 exhibition, amusement or entertainment and private or group instructional 4 activities, the person's books shall be kept to show separately the gross 5 income from exhibition, amusement or entertainment and the gross income 6 from instructional activities. If the books do not provide this separate 7 accounting, the tax is imposed on the person's total gross income from the 8 business. 9

F. The department shall separately account for revenues collected 10 under the amusement classification for the purposes of section 42-5029, 11 subsection D, paragraph 4, subdivision (b). 12

G. For the purposes of section 42-5032.01, the department shall 13 separately account for revenues collected under the amusement 14 classification from sales of admissions to: 15

1. Events that are held in a multipurpose facility that is owned or 16 operated by the tourism and sports authority pursuant to title 5, chapter 17 8, including intercollegiate football contests that are operated by a 18 nonprofit organization that is exempt from taxation under section 19 501(c)(3) of the internal revenue code. 20

2. Professional football contests that are held in a stadium 21 located on the campus of an institution under the jurisdiction of the 22 Arizona board of regents A PUBLIC UNIVERSITY IN THIS STATE. 23


42-5074. Restaurant classification 26 A. The restaurant classification is comprised of the business of 27

operating restaurants, dining cars, dining rooms, lunchrooms, lunch 28 stands, soda fountains, catering services or similar establishments where 29 articles of food or drink are sold for consumption on or off the premises. 30

B. The tax base for the restaurant classification is the gross 31 proceeds of sales or gross income derived from the business. The gross 32 proceeds of sales or gross income derived from the following shall be 33 deducted from the tax base: 34

1. Sales to a person engaged in business classified under the 35 restaurant classification if the items sold are to be resold in the 36 regular course of the business. 37

2. Sales by a congressionally chartered veterans organization of 38 food or drink prepared for consumption on the premises leased, owned or 39 maintained by the organization. 40

3. Sales by churches, fraternal benefit societies and other 41 nonprofit organizations, as these organizations are defined in the federal 42 internal revenue code (26 United States Code section 501), that do not 43 regularly engage or continue in the restaurant business for the purpose of 44 fund-raising. 45

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4. Sales by a nonprofit organization that is exempt from taxation 1 under section 501(c)(3), 501(c)(4) or 501(c)(6) of the internal revenue 2 code if the organization is associated with a major league baseball team 3 or a national touring professional golfing association and no part of the 4 organization's net earnings inures to the benefit of any private 5 shareholder or individual. 6

5. Sales at a rodeo featuring primarily farm and ranch animals in 7 this state by a nonprofit organization that is exempt from taxation under 8 section 501(c)(3), 501(c)(4), 501(c)(6), 501(c)(7) or 501(c)(8) of the 9 internal revenue code and IF no part of the organization's net earnings 10 inures to the benefit of any private shareholder or individual. 11

6. Sales by any nonprofit organization organized and operated 12 exclusively for charitable purposes and recognized by the United States 13 internal revenue service under section 501(c)(3) of the internal revenue 14 code. 15

7. Sales to qualifying hospitals as defined in section 42-5001. 16 8. Sales to a qualifying health care organization as defined in 17

section 42-5001 if the tangible personal property is used by the 18 organization solely to provide health and medical related educational and 19 charitable services. 20

9. Sales of food, drink and condiment for consumption within the 21 premises of any prison, jail or other institution under the jurisdiction 22 of the state department of corrections, the department of public safety, 23 the department of juvenile corrections or a county sheriff. 24

10. Sales of articles of prepared or unprepared food, drink or 25 condiment and accessory tangible personal property to a school district or 26 charter school if the articles and accessory tangible personal property 27 are served to persons for consumption on the premises of a public school 28 in the school district or charter school during school hours. 29

11. Prepared food, drink or condiment donated by a restaurant to a 30 nonprofit charitable organization that has qualified under section 31 501(c)(3) of the internal revenue code and that regularly serves meals to 32 the needy and indigent on a continuing basis at no cost. 33

12. Sales of articles of food and drink at low or reduced prices to 34 eligible elderly, disabled or homeless persons OR PERSONS WITH A 35 DISABILITY by a restaurant that contracts with the department of economic 36 security and that is approved by the food and nutrition services of the 37 United States department of agriculture pursuant to the supplemental 38 nutrition assistance program established by the food and nutrition act of 39 2008 (P.L. 110-246; 122 Stat. 1651; 7 United States Code sections 2011 40 through 2036a), if the purchases of the articles of food and drink are 41 made with the benefits issued pursuant to the supplemental nutrition 42 assistance program. 43

C. The tax imposed on the restaurant classification pursuant to 44 this section does not apply to the gross proceeds of sales or gross income 45

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from tangible personal property sold to a commercial airline consisting of 1 food, beverages and condiments and accessories used for serving the food 2 and beverages, if those items are to be provided without additional charge 3 to passengers for consumption in flight. For the purposes of this 4 subsection, "commercial airline" means a person holding a federal 5 certificate of public convenience and necessity or foreign air carrier 6 permit for air transportation to transport persons, property or United 7 States mail in intrastate, interstate or foreign commerce. 8

D. The department shall separately account for revenues collected 9 under the restaurant classification for the purposes of section 42-5029, 10 subsection D, paragraph 4, subdivision (b). 11

E. For THE purposes of section 42-5032.01, the department shall 12 separately account for revenues collected under the restaurant 13 classification from businesses operating restaurants, dining rooms, 14 lunchrooms, lunch stands, soda fountains, catering services or similar 15 establishments: 16

1. On the premises of a multipurpose facility that is owned or 17 operated by the tourism and sports authority pursuant to title 5, chapter 18 8 for consumption on or off the premises. 19

2. At professional football contests that are held in a stadium 20 located on the campus of an institution under the jurisdiction of the 21 Arizona board of regents A PUBLIC UNIVERSITY IN THIS STATE. 22


43-1022. Subtractions from Arizona gross income 25 In computing Arizona adjusted gross income, the following amounts 26

shall be subtracted from Arizona gross income: 27 1. The amount of exemptions allowed by section 43-1023. 28 2. Benefits, annuities and pensions in an amount totaling not more 29

than two thousand five hundred dollars received from one or more of the 30 following: 31

(a) The United States government service retirement and disability 32 fund, retired or retainer pay of the uniformed services of the United 33 States, the United States foreign service retirement and disability system 34 and any other retirement system or plan established by federal law. 35

(b) The Arizona state retirement system, the corrections officer 36 retirement plan, the public safety personnel retirement system, the 37 elected officials' retirement plan, an optional retirement program 38 established by the Arizona board of regents GOVERNING BOARD OF A 39 UNIVERSITY under section 15-1628, an optional retirement program 40 established by a community college district board under section 15-1451 or 41 a retirement plan established for employees of a county, city or town in 42 this state. 43

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3. A beneficiary's share of the fiduciary adjustment to the extent 1 that the amount determined by section 43-1333 decreases the beneficiary's 2 Arizona gross income. 3

4. Interest income received on obligations of the United States, 4 less any interest on indebtedness, or other related expenses, and deducted 5 in arriving at Arizona gross income, which were incurred or continued to 6 purchase or carry such obligations. 7

5. The excess of a partner's share of income required to be 8 included under section 702(a)(8) of the internal revenue code over the 9 income required to be included under chapter 14, article 2 of this title. 10

6. The excess of a partner's share of partnership losses determined 11 pursuant to chapter 14, article 2 of this title over the losses allowable 12 under section 702(a)(8) of the internal revenue code. 13

7. The amount allowed by section 43-1025 for contributions during 14 the taxable year of agricultural crops to charitable organizations. 15

8. The portion of any wages or salaries paid or incurred by the 16 taxpayer for the taxable year that is equal to the amount of the federal 17 work opportunity credit, the empowerment zone employment credit, the 18 credit for employer paid social security taxes on employee cash tips and 19 the Indian employment credit that the taxpayer received under sections 20 45A, 45B, 51(a) and 1396 of the internal revenue code. 21

9. The amount of prizes or winnings less than five thousand dollars 22 in a single taxable year from any of the state lotteries established and 23 operated pursuant to title 5, chapter 5.1, article 1. 24

10. The amount of exploration expenses that is determined pursuant 25 to section 617 of the internal revenue code, that has been deferred in a 26 taxable year ending before January 1, 1990 and for which a subtraction has 27 not previously been made. The subtraction shall be made on a ratable 28 basis as the units of produced ores or minerals discovered or explored as 29 a result of this exploration are sold. 30

11. The amount included in federal adjusted gross income pursuant 31 to section 86 of the internal revenue code, relating to taxation of social 32 security and railroad retirement benefits. 33

12. To the extent not already excluded from Arizona gross income 34 under the internal revenue code, compensation received for active service 35 as a member of the reserves, the national guard or the armed forces of the 36 United States, including compensation for service in a combat zone as 37 determined under section 112 of the internal revenue code. 38

13. The amount of unreimbursed medical and hospital costs, adoption 39 counseling, legal and agency fees and other nonrecurring costs of adoption 40 not to exceed three thousand dollars. In the case of a husband and wife 41 who file separate returns, the subtraction may be taken by either taxpayer 42 or may be divided between them, but the total subtractions allowed both 43 husband and wife shall not exceed three thousand dollars. The subtraction 44 under this paragraph may be taken for the costs that are described in this 45

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paragraph and that are incurred in prior years, but the subtraction may be 1 taken only in the year during which the final adoption order is granted. 2

14. The amount authorized by section 43-1027 for the taxable year 3 relating to qualified wood stoves, wood fireplaces or gas fired 4 fireplaces. 5

15. The amount by which a net operating loss carryover or capital 6 loss carryover allowable pursuant to section 43-1029, subsection F exceeds 7 the net operating loss carryover or capital loss carryover allowable 8 pursuant to section 1341(b)(5) of the internal revenue code. 9

16. Any amount of qualified educational expenses that is 10 distributed from a qualified state tuition program determined pursuant to 11 section 529 of the internal revenue code and that is included in income in 12 computing federal adjusted gross income. 13

17. Any item of income resulting from an installment sale that has 14 been properly subjected to income tax in another state in a previous 15 taxable year and that is included in Arizona gross income in the current 16 taxable year. 17

18. The amount authorized by section 43-1030 relating to holocaust 18 survivors. 19

19. For property placed in service: 20 (a) In taxable years beginning before December 31, 2012, an amount 21

equal to the depreciation allowable pursuant to section 167(a) of the 22 internal revenue code for the taxable year computed as if the election 23 described in section 168(k)(2)(D)(iii) of the internal revenue code had 24 been made for each applicable class of property in the year the property 25 was placed in service. 26

(b) In taxable years beginning from and after December 31, 2012 27 through December 31, 2013, an amount determined in the year the asset was 28 placed in service based on the calculation in subdivision (a) of this 29 paragraph. In the first taxable year beginning from and after December 30 31, 2013, the taxpayer may elect to subtract the amount necessary to make 31 the depreciation claimed to date for the purposes of this title the same 32 as it would have been if subdivision (c) of this paragraph had applied for 33 the entire time the asset was in service. Subdivision (c) of this 34 paragraph applies for the remainder of the asset's life. If the taxpayer 35 does not make the election under this subdivision, subdivision (a) of this 36 paragraph applies for the remainder of the asset's life. 37

(c) In taxable years beginning from and after December 31, 2013 38 through December 31, 2015, an amount equal to the depreciation allowable 39 pursuant to section 167(a) of the internal revenue code for the taxable 40 year as computed as if the additional allowance for depreciation had been 41 ten percent of the amount allowed pursuant to section 168(k) of the 42 internal revenue code. 43

(d) In taxable years beginning from and after December 31, 2015 44 through December 31, 2016, an amount equal to the depreciation allowable 45

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pursuant to section 167(a) of the internal revenue code for the taxable 1 year as computed as if the additional allowance for depreciation had been 2 fifty-five percent of the amount allowed pursuant to section 168(k) of the 3 internal revenue code. 4

(e) In taxable years beginning from and after December 31, 2016, an 5 amount equal to the depreciation allowable pursuant to section 167(a) of 6 the internal revenue code for the taxable year as computed as if the 7 additional allowance for depreciation had been the full amount allowed 8 pursuant to section 168(k) of the internal revenue code. 9

20. With respect to property that is sold or otherwise disposed of 10 during the taxable year by a taxpayer that complied with section 43-1021, 11 paragraph 14 with respect to that property, the amount of depreciation 12 that has been allowed pursuant to section 167(a) of the internal revenue 13 code to the extent that the amount has not already reduced Arizona taxable 14 income in the current or prior taxable years. 15

21. With respect to property for which an adjustment was made under 16 section 43-1021, paragraph 15, an amount equal to one-fifth of the amount 17 of the adjustment pursuant to section 43-1021, paragraph 15 in the year in 18 which the amount was adjusted under section 43-1021, paragraph 15 and in 19 each of the following four years. 20

22. The amount contributed during the taxable year to college 21 savings plans established pursuant to section 529 of the internal revenue 22 code to the extent that the contributions were not deducted in computing 23 federal adjusted gross income. The amount subtracted shall not exceed: 24

(a) Two thousand dollars for a single individual or a head of 25 household. 26

(b) Four thousand dollars for a married couple filing a joint 27 return. In the case of a husband and wife who file separate returns, the 28 subtraction may be taken by either taxpayer or may be divided between 29 them, but the total subtractions allowed both husband and wife shall not 30 exceed four thousand dollars. 31

23. The amount of any original issue discount that was deferred and 32 not allowed to be deducted in computing federal adjusted gross income in 33 the current taxable year pursuant to section 108(i) of the internal 34 revenue code as added by section 1231 of the American recovery and 35 reinvestment act of 2009 (P.L. 111-5). 36

24. The amount of previously deferred discharge of indebtedness 37 income that is included in the computation of federal adjusted gross 38 income in the current taxable year pursuant to section 108(i) of the 39 internal revenue code as added by section 1231 of the American recovery 40 and reinvestment act of 2009 (P.L. 111-5), to the extent that the amount 41 was previously added to Arizona gross income pursuant to section 43-1021, 42 paragraph 17. 43

25. The portion of the net operating loss carryforward that would 44 have been allowed as a deduction in the current year pursuant to section 45

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172 of the internal revenue code if the election described in section 1 172(b)(1)(H) of the internal revenue code had not been made in the year of 2 the loss that exceeds the actual net operating loss carryforward that was 3 deducted in arriving at federal adjusted gross income. This subtraction 4 only applies to taxpayers who made an election under section 172(b)(1)(H) 5 of the internal revenue code as amended by section 1211 of the American 6 recovery and reinvestment act of 2009 (P.L. 111-5) or as amended by 7 section 13 of the worker, homeownership, and business assistance act of 8 2009 (P.L. 111-92). 9

26. For taxable years beginning from and after December 31, 2013, 10 the amount of any net capital gain included in federal adjusted gross 11 income for the taxable year derived from investment in a qualified small 12 business as determined by the Arizona commerce authority pursuant to 13 section 41-1518. 14

27. An amount of any net long-term capital gain included in federal 15 adjusted gross income for the taxable year that is derived from an 16 investment in an asset acquired after December 31, 2011, as follows: 17

(a) For taxable years beginning from and after December 31, 2012 18 through December 31, 2013, ten percent of the net long-term capital gain 19 included in federal adjusted gross income. 20

(b) For taxable years beginning from and after December 31, 2013 21 through December 31, 2014, twenty percent of the net long-term capital 22 gain included in federal adjusted gross income. 23

(c) For taxable years beginning from and after December 31, 2014, 24 twenty-five percent of the net long-term capital gain included in federal 25 adjusted gross income. For the purposes of this paragraph, a transferee 26 that receives an asset by gift or at the death of a transferor is 27 considered to have acquired the asset when the asset was acquired by the 28 transferor. If the date an asset is acquired cannot be verified, a 29 subtraction under this paragraph is not allowed. 30

28. If an individual is not claiming itemized deductions pursuant 31 to section 43-1042, the amount of premium costs for long-term care 32 insurance, as defined in section 20-1691. 33

29. With respect to a long-term health care savings account 34 established pursuant to section 43-1032, the amount deposited by the 35 taxpayer in the account during the taxable year to the extent that the 36 taxpayer's contributions are included in the taxpayer's federal adjusted 37 gross income. 38

30. The amount of eligible access expenditures paid or incurred 39 during the taxable year to comply with the requirements of the Americans 40 with disabilities act of 1990 (P.L. 101-336) or title 41, chapter 9, 41 article 8 as provided by section 43-1024. 42

31. For taxable years beginning from and after December 31, 2017, 43 the amount of any net capital gain included in Arizona gross income for 44 the taxable year that is derived from the exchange of one kind of legal 45

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tender for another kind of legal tender. For the purposes of this 1 paragraph: 2

(a) "Legal tender" means a medium of exchange, including specie, 3 that is authorized by the United States Constitution or Congress for the 4 payment of debts, public charges, taxes and dues. 5

(b) "Specie" means coins having precious metal content. 6 Sec. 187. Section 43-1074.01, Arizona Revised Statutes, is amended 7

to read: 8 43-1074.01. Credit for increased research activities 9 A. A credit is allowed against the taxes imposed by this title in 10

an amount determined pursuant to section 41 of the internal revenue code, 11 except that: 12

1. The amount of the credit is based on the excess, if any, of the 13 qualified research expenses for the taxable year over the base amount as 14 defined in section 41(c) of the internal revenue code and is computed as 15 follows: 16

(a) If the excess is two million five hundred thousand dollars or 17 less: 18

(i) For taxable years through December 31, 2017, the credit is 19 equal to twenty percent of that amount. 20

(ii) For taxable years beginning from and after December 31, 2017 21 through December 31, 2021, the credit is equal to twenty-four percent of 22 that amount. 23

(iii) For taxable years beginning from and after December 31, 2021, 24 the credit is equal to twenty percent of that amount. 25

(b) If the excess is over two million five hundred thousand 26 dollars: 27

(i) For taxable years through December 31, 2017, the credit is 28 equal to five hundred thousand dollars plus eleven percent of any amount 29 exceeding two million five hundred thousand dollars. 30

(ii) For taxable years beginning from and after December 31, 2017, 31 through December 31, 2021, the credit is equal to six hundred thousand 32 dollars plus fifteen percent of any amount exceeding two million five 33 hundred thousand dollars. 34

(iii) For taxable years beginning from and after December 31, 2021, 35 the credit is equal to five hundred thousand dollars plus eleven percent 36 of any amount exceeding two million five hundred thousand dollars. 37

(c) For taxable years beginning from and after December 31, 2011, 38 an additional credit amount is allowed if the taxpayer made basic research 39 payments during the taxable year to a PUBLIC university under the 40 jurisdiction of the Arizona board of regents IN THIS STATE. The 41 additional credit amount is equal to ten percent of the excess, if any, of 42 the basic research payments over the qualified organization base period 43 amount for the taxable year. The department shall not allow credit 44 amounts under this subdivision and section 43-1168, subsection A, 45

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paragraph 1, subdivision (d) that exceed, in the aggregate, a combined 1 total of ten million dollars in any calendar year. Subject to that limit, 2 on application by the taxpayer, the department shall certify credit 3 amounts under this subdivision and section 43-1168, subsection A, 4 paragraph 1, subdivision (d) based on priority placement established by 5 the date that the taxpayer filed the application. For taxable years 6 beginning from and after December 31, 2014, any basic research payments 7 used to determine the additional credit under this subdivision must first 8 receive certification from the Arizona commerce authority pursuant to 9 section 41-1507.01. The additional credit amount under this subdivision 10 shall not exceed the amount allowed based on actual basic research 11 payments or the department's certification, whichever is less. If an 12 application, if certified in full, would exceed the ten million dollar 13 limit, the department shall certify only an amount within that limit. 14 After the limit is attained, the department shall deny any subsequent 15 applications regardless of whether other certified amounts are not 16 actually claimed as a credit or other taxpayers fail to qualify to 17 actually claim certified amounts. Notwithstanding subsections B and C of 18 this section, any amount of the additional credit under this subdivision 19 that exceeds the taxes otherwise due under this title is not refundable, 20 but may be carried forward to the next five consecutive taxable years. 21 For the purposes of this subdivision, "basic research payments" and 22 "qualified organization base period amount" have the same meanings 23 prescribed by section 41(e) of the internal revenue code without regard to 24 whether the taxpayer is or is not a corporation. 25

2. Qualified research includes only research conducted in this 26 state, including research conducted at a university in this state and paid 27 for by the taxpayer. 28

3. If two or more taxpayers, including partners in a partnership 29 and shareholders of an S corporation, as defined in section 1361 of the 30 internal revenue code, share in the eligible expenses, each taxpayer is 31 eligible to receive a proportionate share of the credit. 32

4. The credit under this section applies only to expenses incurred 33 from and after December 31, 2000. 34

5. The termination provisions of section 41 of the internal revenue 35 code do not apply. 36

B. Except as provided by subsection C of this section, if the 37 allowable credit under this section exceeds the taxes otherwise due under 38 this title on the claimant's income, or if there are no taxes due under 39 this title, the amount of the credit not used to offset taxes may be 40 carried forward to the next fifteen consecutive taxable years. The amount 41 of credit carryforward from taxable years beginning from and after 42 December 31, 2000 through December 31, 2002 that may be used in any 43 taxable year may not exceed the taxpayer's tax liability under this title 44 or five hundred thousand dollars, whichever is less, minus the credit 45

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under this section for the current taxable year's qualified research 1 expenses. The amount of credit carryforward from taxable years beginning 2 from and after December 31, 2002 that may be used in any taxable year may 3 not exceed the taxpayer's tax liability under this title minus the credit 4 under this section for the current taxable year's qualified research 5 expenses. A taxpayer who carries forward any amount of credit under this 6 subsection may not thereafter claim a refund of any amount of the credit 7 under subsection C of this section. 8

C. For taxable years beginning from and after December 31, 2009, if 9 a taxpayer who claims a credit under this section employs fewer than one 10 hundred fifty persons in the taxpayer's trade or business and if the 11 allowable credit under this section exceeds the taxes otherwise due under 12 this title on the claimant's income, or if there are no taxes due under 13 this title, in lieu of carrying the excess amount of credit forward to 14 subsequent taxable years under subsection B of this section, the taxpayer 15 may elect to receive a refund as follows: 16

1. The taxpayer must apply to the Arizona commerce authority for 17 qualification for the refund pursuant to section 41-1507 and submit a copy 18 of the authority's certificate of qualification to the department of 19 revenue with the taxpayer's income tax return. 20

2. The amount of the refund is limited to seventy-five percent of 21 the amount by which the allowable credit under this section exceeds the 22 taxpayer's tax liability under this title for the taxable year. The 23 remainder of the excess amount of the credit is waived. 24

3. The refund shall be paid in the manner prescribed by section 25 42-1118. 26

4. The refund is subject to setoff under section 42-1122. 27 5. If the department determines that a credit refunded pursuant to 28

this subsection is incorrect or invalid, the excess credit issued may be 29 treated as a tax deficiency pursuant to section 42-1108. 30

D. A taxpayer that claims a credit for increased research and 31 development activity under this section shall not claim a credit under 32 section 43-1085.01 for the same expenses. 33


43-1168. Credit for increased research activity 36 A. A credit is allowed against the taxes imposed by this title in 37

an amount determined pursuant to section 41 of the internal revenue code, 38 except that: 39

1. The amount of the credit is computed as follows: 40 (a) Add: 41 (i) The excess, if any, of the qualified research expenses for the 42

taxable year over the base amount as defined in section 41(c) of the 43 internal revenue code. 44

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(ii) The basic research payments determined under section 1 41(e)(1)(A) of the internal revenue code. 2

(b) If the sum computed under subdivision (a) of this paragraph is 3 two million five hundred thousand dollars or less: 4

(i) For taxable years through December 31, 2017, the credit is 5 equal to twenty percent of that amount. 6

(ii) For taxable years beginning from and after December 31, 2017 7 through December 31, 2021, the credit is equal to twenty-four percent of 8 that amount. 9

(iii) For taxable years beginning from and after December 31, 2021, 10 the credit is equal to twenty percent of that amount. 11

(c) If the sum computed under subdivision (a) of this paragraph is 12 over two million five hundred thousand dollars: 13

(i) For taxable years through December 31, 2017, the credit is 14 equal to five hundred thousand dollars plus eleven percent of any amount 15 exceeding two million five hundred thousand dollars. 16

(ii) For taxable years beginning from and after December 31, 2017, 17 through December 31, 2021, the credit is equal to six hundred thousand 18 dollars plus fifteen percent of any amount exceeding two million five 19 hundred thousand dollars. 20

(iii) For taxable years beginning from and after December 31, 21 2021, the credit is equal to five hundred thousand dollars plus eleven 22 percent of any amount exceeding two million five hundred thousand dollars. 23

(d) For taxable years beginning from and after December 31, 2011, 24 an additional credit amount is allowed if the taxpayer made basic research 25 payments during the taxable year to a PUBLIC university under the 26 jurisdiction of the Arizona board of regents IN THIS STATE. The 27 additional credit amount is equal to ten percent of the excess, if any, of 28 the basic research payments over the qualified organization base period 29 amount for the taxable year. The department shall not allow credit 30 amounts under this subdivision and section 43-1074.01, subsection A, 31 paragraph 1, subdivision (c) that exceed, in the aggregate, a combined 32 total of ten million dollars in any calendar year. Subject to that limit, 33 on application by the taxpayer, the department shall certify credit 34 amounts under this subdivision and section 43-1074.01, subsection A, 35 paragraph 1, subdivision (c) based on priority placement established by 36 the date that the taxpayer filed the application. For taxable years 37 beginning from and after December 31, 2014, any basic research payments 38 used to determine the additional credit under this subdivision must first 39 receive certification from the Arizona commerce authority pursuant to 40 section 41-1507.01. The additional credit amount under this subdivision 41 shall not exceed the amount allowed based on actual basic research 42 payments or the department's certification, whichever is less. If an 43 application, if certified in full, would exceed the ten million dollar 44 limit, the department shall certify only an amount within that limit. 45

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After the limit is attained, the department shall deny any subsequent 1 applications regardless of whether other certified amounts are not 2 actually claimed as a credit or other taxpayers fail to qualify to 3 actually claim certified amounts. Notwithstanding subsections B and D of 4 this section, any amount of the additional credit under this subdivision 5 that exceeds the taxes otherwise due under this title is not refundable, 6 but may be carried forward to the next five consecutive taxable years. 7 For the purposes of this subdivision, "basic research payments" and 8 "qualified organization base period amount" have the same meanings 9 prescribed by section 41(e) of the internal revenue code. 10

2. Qualified research includes only research conducted in this 11 state, including research conducted at a university in this state and paid 12 for by the taxpayer. 13

3. If two or more taxpayers, including corporate partners in a 14 partnership, share in the eligible expenses, each taxpayer is eligible to 15 receive a proportionate share of the credit. 16

4. The credit under this section applies only to expenses incurred 17 from and after December 31, 1993. 18

5. The termination provisions of section 41 of the internal revenue 19 code do not apply. 20

B. Except as provided by subsection D of this section, if the 21 allowable credit under this section exceeds the taxes otherwise due under 22 this title on the claimant's income, or if there are no taxes due under 23 this title, the amount of the credit not used to offset taxes may be 24 carried forward to the next fifteen consecutive taxable years. The amount 25 of credit carryforward from taxable years beginning from and after 26 December 31, 2000 through December 31, 2002 that may be used under this 27 subsection in any taxable year may not exceed the taxpayer's tax liability 28 under this title or five hundred thousand dollars, whichever is less, 29 minus the credit under this section for the current taxable year's 30 qualified research expenses. The amount of credit carryforward from 31 taxable years beginning from and after December 31, 2002 that may be used 32 under this subsection in any taxable year may not exceed the taxpayer's 33 tax liability under this title minus the credit under this section for the 34 current taxable year's qualified research expenses. A taxpayer that 35 carries forward any amount of credit under this subsection may not 36 thereafter claim a refund of any amount of the credit under subsection D 37 of this section. 38

C. If a taxpayer has qualified research expenses that are carried 39 forward from taxable years beginning before January 1, 2001, the amount of 40 the expenses carried forward shall be converted to a credit carryforward 41 by multiplying the amount of the qualified expenses carried forward by 42 twenty percent. A credit carryforward determined under this subsection 43 may be carried forward to not more than fifteen years from the year in 44 which the expenses were incurred. The amount of credit carryforward from 45

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taxable years beginning before January 1, 2001 that may be used under this 1 subsection in any taxable year may not exceed the taxpayer's tax liability 2 under this title or five hundred thousand dollars, whichever is less, 3 minus the credit under this section for the current taxable year's 4 qualified research expenses. The total amount of credit carryforward from 5 taxable years beginning before January 1, 2003 that may be used in any 6 taxable year under subsection B and this subsection may not exceed the 7 taxpayer's tax liability under this title or five hundred thousand 8 dollars, whichever is less, minus the credit under this section for the 9 current taxable year's qualified research expenses. 10

D. For taxable years beginning from and after December 31, 2009, if 11 a taxpayer that claims a credit under this section employs fewer than one 12 hundred fifty persons in the taxpayer's trade or business and if the 13 allowable credit under this section exceeds the taxes otherwise due under 14 this title on the claimant's income, or if there are no taxes due under 15 this title, in lieu of carrying the excess amount of credit forward to 16 subsequent taxable years under subsection B of this section, the taxpayer 17 may elect to receive a refund as follows: 18

1. The taxpayer must apply to the Arizona commerce authority for 19 qualification for the refund pursuant to section 41-1507 and submit a copy 20 of the authority's certificate of qualification to the department of 21 revenue with the taxpayer's income tax return. 22

2. The amount of the refund is limited to seventy-five percent of 23 the amount by which the allowable credit under this section exceeds the 24 taxpayer's tax liability under this title for the taxable year. The 25 remainder of the excess amount of the credit is waived. 26

3. The refund shall be paid in the manner prescribed by section 27 42-1118. 28

4. The refund is subject to setoff under section 42-1122. 29 5. If the department determines that a credit refunded pursuant to 30

this subsection is incorrect or invalid, the excess credit issued may be 31 treated as a tax deficiency pursuant to section 42-1108. 32

E. A taxpayer that claims a credit for increased research and 33 development activity under this section shall not claim a credit under 34 section 43-1164.02 for the same expenses. 35


44-7002. Definitions 38 In this chapter, unless the context otherwise requires: 39 1. "Agreement" means the bargain of the parties in fact, as found 40

in their language or inferred from other circumstances and from rules, 41 regulations and procedures that are given the effect of agreements under 42 laws otherwise applicable to a particular transaction. 43

2. "Automated transaction" means a transaction that is conducted or 44 performed, in whole or in part, by electronic means or electronic records 45

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and in which the acts or records of one or both parties are not reviewed 1 by an individual in the ordinary course in forming a contract, performing 2 under an existing contract or fulfilling an obligation that is required by 3 the transaction. 4

3. "Computer program" means a set of statements or instructions to 5 be used directly or indirectly in an information processing system in 6 order to bring about a certain result. 7

4. "Contract" means the total legal obligation resulting from the 8 parties' agreement as affected by this chapter and any other applicable 9 law. 10

5. "Electronic" means relating to technology that has electrical, 11 digital, magnetic, wireless, optical or electromagnetic capabilities or 12 similar capabilities. 13

6. "Electronic agent" means a computer program or an electronic or 14 other automated means that is used independently to initiate an action or 15 respond to electronic records or performances, in whole or in part, 16 without review or action by an individual. 17

7. "Electronic record" means a record that is created, generated, 18 sent, communicated, received or stored by electronic means. 19

8. "Electronic signature" means an electronic sound, symbol or 20 process that is attached to or logically associated with a record and that 21 is executed or adopted by an individual with the intent to sign the 22 record. 23

9. "Governmental agency" means an executive, legislative or 24 judicial agency, department, board, commission, authority, institution or 25 instrumentality of the federal government or a state or of a county or 26 municipality or other political subdivision of a state. 27

10. "Information" means data, text, images, sounds, codes, computer 28 programs, software or databases or similar items. 29

11. "Information processing system" means an electronic system for 30 creating, generating, sending, receiving, storing, displaying or 31 processing information. 32

12. "Person" means an individual, corporation, business trust, 33 estate, trust, partnership, limited liability company, association, joint 34 venture, governmental agency or public corporation or any other legal or 35 commercial entity. 36

13. "Record" means information that is inscribed on a tangible 37 medium or that is stored in an electronic or other medium and that is 38 retrievable in perceivable form. 39

14. "Security procedure" means a procedure that is employed to 40 verify that an electronic signature, record or performance is that of a 41 specific person or to detect changes or errors in the information in an 42 electronic record. Security procedure includes a procedure that requires 43 the use of algorithms or other codes, identifying words or numbers or 44 encryption, callback or other acknowledgment procedures. 45

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15. "State" means a state of the United States, the District of 1 Columbia, Puerto Rico, the United States Virgin Islands or any territory 2 or insular possession subject to the jurisdiction of the United States. 3 State includes an Indian tribe or band or Alaskan native village that is 4 recognized by federal law or formally acknowledged by another state. 5

16. "State agency" means any department, commission, board, 6 institution or other agency of the state that receives, expends or 7 disburses state funds or incurs obligations of the state, including the 8 Arizona board of regents but excluding the PUBLIC universities under the 9 jurisdiction of the Arizona board of regents AND THE GOVERNING BOARDS OF 10 THE UNIVERSITIES, the community college districts and the legislative or 11 judicial branches. 12

17. "Transaction" means an action or set of actions occurring 13 between two or more persons relating to the conduct of business, 14 commercial or governmental affairs. 15


48-4202. Formation of district 18 A. The board of supervisors of each county having a population of 19

more than one million five hundred thousand persons or any county in which 20 a major league baseball organization has established or seeks to establish 21 a spring training operation may organize a countywide district to include 22 both the incorporated and unincorporated areas of the county, if the board 23 determines that the public convenience, necessity or welfare will be 24 promoted by establishing the district. 25

B. Two or more municipalities in the same county may organize a 26 district for multipurpose facilities if the governing bodies of the 27 municipalities determine that the public convenience, necessity or welfare 28 will be promoted by establishing the district. The district shall be 29 composed of the areas within the corporate boundaries of the 30 municipalities. After formation, the boundaries of the district shall not 31 be altered. A district may be established under this subsection in the 32 same county in which a district is established under subsection A of this 33 section. A district formed pursuant to this subsection shall be deemed a 34 county stadium district for the purposes of this chapter. Notwithstanding 35 any other law, a district may not be organized under this subsection from 36 and after October 31, 1999, except that a district may be organized under 37 this subsection after October 31, 1999 if before that date the governing 38 body of two or more of the municipalities identified the location of a 39 multipurpose facility site and has voted with the purpose of forming a 40 district for multipurpose facilities under this subsection. 41

C. The board of supervisors of any county in which a state 42 supported university is established may organize a single university 43 athletic facilities district if the board determines that the public 44 convenience, necessity or welfare will be promoted by establishing the 45

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district. The district shall include only the area in the county within 1 the contiguous exterior boundaries of real property owned by the Arizona 2 board of regents GOVERNING BOARD OF A UNIVERSITY and shall exclude any 3 such real property subject to an existing ground lease or subject to an 4 existing agreement granting a third party the right or option to a ground 5 lease. After formation, the boundaries of the district shall be altered 6 only as the Arizona board of regents GOVERNING BOARD OF THE UNIVERSITY 7 acquires and disposes of real property. A district may be established 8 under this subsection in the same county in which a district is 9 established under subsection A of this section. A district formed 10 pursuant to this subsection is deemed a county stadium district for the 11 purposes of this chapter. 12

D. The county board of supervisors shall be the board of directors 13 of a countywide district established under subsection A of this section. 14

E. The board of directors of a district established under 15 subsection B of this section shall consist of persons who are residents of 16 the county in which the district is located, at least four of whom must 17 reside in the municipality in which the district is located and who are 18 appointed as follows: 19

1. Five members who are appointed by the governor, each of whom 20 must have experience in commercial real estate, construction, 21 redevelopment, real estate law, architecture, economic development or 22 commercial or public finance. The governor may receive nominations for 23 appointment from any interested organization or person. Members appointed 24 by the governor serve at the pleasure of the governor. 25

2. Two members who are appointed by the president of the senate. 26 The members appointed by the president serve at the pleasure of the 27 president. 28

3. Two members who are appointed by the speaker of the house of 29 representatives. The members appointed by the speaker serve at the 30 pleasure of the speaker. 31

F. The board of directors of a district established under 32 subsection C of this section shall be established pursuant to an 33 intergovernmental agreement between the county and the Arizona board of 34 regents GOVERNING BOARD OF THE UNIVERSITY. 35

G. The directors of any district are not eligible for compensation 36 for their services but are eligible for reimbursement for their necessary 37 expenses in attending to and traveling on district business. 38

H. The board of supervisors may pay the necessary costs incurred in 39 connection with establishing a countywide district from any county monies 40 available for that purpose. The municipalities may pay their 41 proportionate share of the necessary costs incurred in establishing a 42 district formed by two or more municipalities under subsection B of this 43 section from any monies available for that purpose. The Arizona board of 44 regents GOVERNING BOARD OF THE UNIVERSITY may pay the necessary costs 45

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incurred in connection with establishing a district under subsection C of 1 this section from any monies available for that purpose. 2

I. Subject to limitations imposed by this chapter, by 3 intergovernmental agreement and by the ordinance or resolution authorizing 4 the formation of the district, the district is a tax levying public 5 improvement district and a political taxing subdivision of this state and 6 has all the powers, privileges and immunities granted generally to 7 municipal corporations for the purposes of implementing this chapter, 8 including eminent domain, as provided by section 48-4203, subsection A, 9 paragraph 7, and immunity of its property, bonds and interest on and 10 transfer of its bonds from taxation. 11


48-4204. Constructing and operating a stadium and other 14 structures; regulating alcoholic beverages 15

A. From the taxes and surcharges levied pursuant to article 2 of 16 this chapter for use with respect to major league baseball spring 17 training, the district may acquire land and construct, finance, furnish, 18 maintain, improve, operate, market and promote the use of existing or 19 proposed major league baseball spring training facilities or stadiums and 20 other structures, utilities, roads, parking areas or buildings necessary 21 for full use of the training facilities or stadiums for sports and other 22 purposes and do all things necessary or convenient to accomplish those 23 purposes. The board shall require that any project undertaken by the 24 district include financial participation from the county or municipality 25 in which the project is located, from a private party or from any 26 combination of these entities which THAT equals or exceeds one-half of the 27 amount to be expended or distributed by the district. Capital improvement 28 funds expended at any time after June 1, 1991 by a county, municipality or 29 private party for a purpose authorized by this section may be deemed 30 financial participation with respect to any project the district may 31 undertake. 32

B. From the taxes and charges levied or identified pursuant to 33 section 48-4237 for use with respect to multipurpose facilities and from 34 other monies lawfully available to the district, the district may acquire 35 land and construct, finance, furnish, maintain, improve, operate, market 36 and promote the use of multipurpose facilities and other structures, 37 utilities, roads, parking areas or buildings necessary for full use of the 38 multipurpose facilities and do all things necessary or convenient to 39 accomplish those purposes. Public funds MONIES identified in section 40 48-4237, including funds MONIES distributed pursuant to section 42-5031, 41 may only be used for the components for a multipurpose facility that are 42 owned by the district or that are publicly owned or for the following 43 purposes: 44

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1. Debt service for bonds issued by the district before January 1, 1 2009. 2

2. Contractual obligations incurred by the district before June 1, 3 2009. 4

3. Fiduciary, reasonable legal and administrative expenses of the 5 district. 6

4. The design and construction of the hotel and convention center 7 located on the multipurpose facility site. 8

C. For the public funds MONIES identified in section 48-4237, 9 including funds MONIES distributed pursuant to section 42-5031, and from 10 which the district board has planned an expenditure of five hundred 11 thousand dollars or more, the following apply: 12

1. Each district board member shall provide advance notice of the 13 consideration of the expenditure by the board to the person who holds the 14 office that is responsible for that board member's appointment. 15

2. The notice prescribed in paragraph 1 of this subsection must be 16 provided by regular mail delivered to the office that is responsible for 17 that board member's appointment and may be preceded by any other form of 18 notice. The notice must be provided at least two weeks before the date of 19 the meeting and must be posted to the district's website on the day the 20 notice is mailed. 21

3. The notice prescribed in paragraph 1 of this subsection must be 22 accompanied by the board member's written statement as to whether the 23 board member has any financial interest in the subject of the proposed 24 expenditure by the board. The board members' written statements may be 25 provided in a single document that is prepared by the board's 26 administrative personnel but must be signed by the board members and must 27 be posted to the district's website with the notice prescribed in 28 paragraph 1 of this subsection. 29

4. The district board may not artificially divide or fragment 30 planned expenditures so as to circumvent the requirements of this 31 subsection. 32

D. A district established pursuant to section 48-4202, subsection B 33 may not use monies distributed pursuant to section 42-5031 for the 34 salaries or compensation of any employee of the municipality in which the 35 district is located. 36

E. Pursuant to an intergovernmental agreement with the Arizona 37 board of regents GOVERNING BOARD OF A UNIVERSITY, from the revenues 38 collected from assessments pursuant to section 48-4235 for use with 39 respect to Arizona board of regents owned intercollegiate athletic 40 facilities OWNED BY THAT GOVERNING BOARD, the district may construct, 41 reconstruct, finance, furnish, maintain and improve existing 42 intercollegiate athletic facilities located on Arizona board of regents' 43 property OF THAT GOVERNING BOARD, including utilities, roads, parking 44 areas or buildings necessary for full use of the athletic facilities. 45

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F. Title 34 applies to the district, except that regardless of the 1 funding source for design and construction of facilities and structures 2 the district may establish alternative systems and procedures, including 3 the use of the design-build method of construction or the use of 4 qualifications-based selection of contractors with experience in stadium 5 design or construction, to expedite the design and construction or 6 reconstruction of any of its facilities or structures or any facilities or 7 structures leased to it or used by it pursuant to an intergovernmental 8 agreement. For the purposes of this subsection: 9

1. "Design-build" means a process of entering into and managing a 10 contract between the district and another party in which the other party 11 agrees to both design and build a structure, a facility or other items 12 specified in the contract. 13

2. "Qualifications-based selection" means a process of entering 14 into and managing a contract between the district and another party in 15 which the other party is selected by the district on the basis of the 16 party's qualifications and experience in designing or constructing 17 facilities, structures or other items similar to those the district is 18 authorized to construct or lease. The other party may be selected by 19 direct selection or by public competition. 20

G. For the purposes of financing, designing, constructing, 21 reconstructing or operating facilities or structures, the district is not 22 the agent of any municipality, this state or any agency or instrumentality 23 of this state participating in the funding of such facilities or 24 structures. 25

H. Subject to the requirements of title 4, the board of directors 26 may permit and regulate the sale, use and consumption of alcoholic 27 beverages at events held on property acquired, leased or subleased under 28 this article. 29


48-4235. Assessment in lieu of property tax; rate; 32 administration 33

A. The board of directors of a district established pursuant to 34 section 48-4202, subsection C shall provide by intergovernmental agreement 35 for the imposition and collection of an assessment from prime commercial 36 lessees of Arizona board of regents' property OF THE GOVERNING BOARD OF A 37 UNIVERSITY in the district. 38

B. The board of directors shall determine the amount of the 39 assessment each year as follows: 40

1. Determine the valuation of each parcel of Arizona board of 41 regents' property OF THE GOVERNING BOARD OF A UNIVERSITY in the same 42 manner as is used by the county assessor to determine the valuation of 43 similar property in the county. The board of directors shall make 44 available the method and calculation of the valuation of any property on 45

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request. On the petition of a prime lessee, the board of directors shall 1 meet with the petitioner to resolve any disagreement on the amount of the 2 valuation. 3

2. Compute a comparable assessed valuation by applying the 4 appropriate assessment percentage prescribed by title 42, chapter 15, 5 article 1 to the valuation determined under paragraph 1. 6

3. Multiply the comparable assessed valuation determined under 7 paragraph 2 by a rate per one hundred dollars established by the board of 8 directors, but not to exceed the composite tax rates of all taxing 9 jurisdictions in which the parcel of property is located. 10

C. The district treasurer shall collect the assessment from the 11 prime lessee. The district treasurer shall deposit the net revenues from 12 the assessment in the district fund to be used for the purposes allowed by 13 this chapter. 14

D. The board of directors may pledge all or part of the assessment 15 revenues to secure district bonds or financial obligations under this 16 chapter. The board of directors must continue to impose and collect the 17 assessment in an amount that is at least adequate for all debt service 18 requirements of the district under this chapter. 19

Sec. 193. Succession 20 A. On the effective date of this act, except for the authority, 21

powers, duties and responsibilities specifically retained by the Arizona 22 board of regents pursuant to section 15-1625, Arizona Revised Statutes, as 23 added by this act, the governing board of a university succeeds to the 24 authority, powers, duties and responsibilities of the Arizona board of 25 regents for any matter or action that occurs on or affects that 26 university's campus or campuses, including the authority, powers, duties 27 and responsibilities concerning federal monies that are allocated to that 28 university. 29

B. This act does not alter the effect of any actions that were 30 taken or impair the valid obligations of the Arizona board of regents in 31 existence before January 1, 2019. 32

C. Administrative rules and orders that were adopted by the Arizona 33 board of regents continue in effect until superseded by administrative 34 action by the governing boards of the universities. 35

D. All administrative matters, contracts and judicial and quasi 36 judicial actions, whether completed, pending or in process, of the Arizona 37 board of regents on January 1, 2019 are transferred to and retain the same 38 status with the governing boards of the universities. 39

E. All certificates, licenses, registrations, permits and other 40 indicia of qualification and authority that were issued by the Arizona 41 board of regents retain their validity for the duration of their terms of 42 validity as provided by law. 43

F. All data and investigative findings, all obligations and all 44 appropriated monies that remain unexpended and unencumbered on January 1, 45

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2019 of the Arizona board of regents are transferred to the governing 1 boards of the universities. 2

G. Title to all real and personal property that is owned by the 3 Arizona board of regents on the effective date of this act is transferred 4 to the respective university for whose use or benefit the property was 5 originally obtained, or, if the property was acquired for the use or 6 benefit of all three universities, that property shall be transferred and 7 allocated in an equitable or proportionate manner between the three 8 universities. 9

Sec. 194. Retention of members 10 Notwithstanding section 15-1621, Arizona Revised Statutes, as 11

amended by this act, all persons serving as members of the Arizona board 12 of regents on the effective date of this act may continue to serve until 13 the expiration of their normal terms. Subsequent membership shall be as 14 prescribed by statute. 15

Sec. 195. Purpose 16 Pursuant to section 41-2955, subsection E, Arizona Revised Statutes, 17

the legislature establishes the governing board for the university of 18 Arizona to adopt, prescribe and regulate administrative and financial 19 policies applicable to the university of Arizona, to adopt rules and 20 measures for the university of Arizona and to supervise the operation of 21 the university of Arizona. 22


the legislature establishes the governing board for Arizona state 25 university to adopt, prescribe and regulate administrative and financial 26 policies applicable to Arizona state university, to adopt rules and 27 measures for Arizona state university and to supervise the operation of 28 Arizona state university. 29


the legislature establishes the governing board for northern Arizona 32 university to adopt, prescribe and regulate administrative and financial 33 policies applicable to northern Arizona university, to adopt rules and 34 measures for northern Arizona university and to supervise the operation of 35 northern Arizona university. 36

Sec. 198. Effective date 37 This act is effective from and after December 31, 2018. 38 Sec. 199. Conditional enactment 39 Section 15-2401, Arizona Revised Statutes, as amended by Laws 2017, 40

chapter 139, section 1 and this act, is effective only if Laws 2017, 41 chapter 139, the subject of referendum petition R-02-2018, is approved by 42 a vote of the people at the next general election or fails to be referred 43 to the voters at the next general election. 44

HB 2110

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Sec. 200. Requirements for enactment; three-fourths vote 1 Pursuant to article IV, part 1, section 1, Constitution of Arizona, 2

section 15-1825, Arizona Revised Statutes, as amended by this act, is 3 effective only on the affirmative vote of at least three-fourths of the 4 members of each house of the legislature. 5

HB 2110 - azleg.govHB 2110 - 2 - 1 6. "Child" or "children", as used in reference to age of persons,...

Documents

Transcript of HB 2110 - azleg.govHB 2110 - 2 - 1 6. "Child" or "children", as used in reference to age of persons,...