AZ SB1068

Amends sections 43-1602 and 43-1603 of Arizona Revised Statutes to establish operational requirements for school tuition organizations (STOs) that award scholarships and tuition grants.

Requires STOs to allocate at least 90 percent of annual revenue exclusively to scholarships for children whose family income does not exceed 185 percent of the federal reduced-price lunch income threshold.

Prohibits STOs from awarding scholarships solely based on donor recommendations, though donors may recommend beneficiaries as one factor among others that the organization considers.

Mandates STOs include notice in printed materials, scholarship applications, and websites stating that scholarships cannot be awarded solely on donor recommendation and that donors cannot swap contributions to benefit their own dependents.

Requires STOs to consider financial need when evaluating applications and awarding scholarships, and prohibits schools from accepting scholarships exceeding the total cost of educating that student.