AZ HB4132

Restricts Education Savings Account (ESA) eligibility beginning July 1, 2027 to students who either attended public school as full-time students in the current or prior year, or whose families have annual incomes below $200,000 (adjusted for inflation after fiscal year 2027-2028).

Requires ESA funds be used for a "majority" rather than a "portion" of educational expenses, and mandates that parents submit expenditure records to the department for review.

Imposes spending caps of $2,000 per school year for tutoring/teaching services, curricula and supplementary materials, and nonpublic online learning programs.

Prohibits ESA funds from being used for luxury goods, noneducational items (water parks, amusement parks, pools, gift cards, dining, lodging, vehicles), goods/services provided outside Arizona, or services from family members.

Reduces the inactive account closure period from three academic years to one academic year, and requires unused funds be transferred to the classroom site fund annually rather than remaining in accounts indefinitely.