HB 2327 Summary

• Amends Arizona Revised Statutes section 43-1603 to regulate how school tuition organizations (STOs) award scholarships funded by tax-credit donations.

• Prohibits STOs from awarding scholarships "solely" on the basis of donor recommendations, though donor recommendations may be considered among other factors in evaluation.

• Requires STOs to consider applicant financial need when evaluating scholarship applications and awarding designations.

• Mandates STOs include notice in solicitation materials and on websites stating that scholarships cannot be awarded solely based on donor recommendations and that taxpayers cannot claim credits for donation swaps benefiting their own dependents.

• Maintains existing requirement that STOs allocate at least 90% of contributions to educational scholarships and grants, with specific prioritization rules for contributions made pursuant to section 43-1089.03.