AZ SB1649

Prohibits online course providers and online schools from operating dropout recovery programs, limiting these programs to alternative schools within school districts and alternative charter schools.

Requires schools operating dropout recovery programs to notify the Arizona Department of Education 30 days before beginning operations, and the Department must approve the program within 30 days based on established criteria.

Establishes a Department of Education master list of educational management organizations that provide dropout recovery services, updated quarterly to identify which organizations each school uses.

Allows schools to provide up to two months of fundable orientation and mentoring per student per twelve-month period, with progress tracked as "O" (orientation), "S" (satisfactory), or "U" (unsatisfactory).

Requires schools operating dropout recovery programs to report by July 31 annually on on-track to graduate data, total credits earned, and college and career readiness indicators; the Department must compile and submit this report to state leadership.