AZ SB1259

Requires school districts to allow students in grades 7-12 to enroll in up to two online courses per academic year beginning July 1, 2013, with initial offerings limited to college-credit and core academic courses aligned to Common Core standards.

Establishes a state board of education-maintained master list of approved online courses, with providers (school districts, charter schools, nonprofits, for-profits, and open education resources) submitting applications that may be subject to review fees.

Sets maximum course pricing at $700 for school year 2013-2014, with annual adjustments thereafter based on a nationally recognized inflationary index.

Distributes course funding as 35% upon enrollment, 50% upon course completion with a C- grade or better, and 15% upon demonstration of mastery through state-approved assessment.

Requires midterm and final examinations to be monitored by a nonfamily member physically present with the student and eliminates the requirement for a teacher of record for online courses.