AZ HB2732

Requires students scoring "far below" third grade level on the Arizona Instrument to Measure Standards (AIMS) reading test to be retained, effective 2013-2014 school year.

Establishes six good cause exemptions allowing promotion despite low reading scores, including students with disabilities, English learners with less than two years instruction, students previously retained twice, and those demonstrating proficiency on alternate assessments.

Mandates school districts provide annual written notification to parents of kindergarten through third grade students about third grade retention policies and separate notifications for students with reading deficiencies, including intervention options.

Requires state board to develop intervention and remedial strategies including assignment to different teacher, summer school, intensive reading instruction, and online instruction that districts must offer to retained students.

Creates task force to examine reading assessment models and report findings by February 15, 2011; bill's effectiveness is conditional on approval of Proposition 100 at May 18, 2010 election.