AZ SB1306

Restricts new Empowerment Scholarship Account (ESA) eligibility starting July 1, 2027 to students who either previously attended Arizona public schools as full-time students or whose families earn less than $200,000 annually (adjusted for inflation).

Requires parents to use the majority of ESA funds on core education subjects (reading, grammar, mathematics, social studies, science), changing from the current "portion" requirement.

Prohibits ESA expenditures on goods/services from family members, luxury items, noneducational goods, and items such as amusement park admissions, gift cards, bounce houses, and motor vehicles.

Closes inactive ESA accounts after one academic year of non-renewal instead of the current three years, with remaining funds returned to the state.

Transfers all unexpended ESA funds from the previous school year to the classroom site fund annually, with different deadlines for students with disabilities (October 1) versus other students (September 1).