AZ SB1338

Adds three categories of individuals who are ineligible to receive any state or local public benefits in Arizona: persons whose presence is unauthorized by federal law, foreign nationals paroled into the U.S. by the Department of Homeland Security, and foreign nationals who have indicated intent to apply for asylum but whose applications have not been approved.

Removes public retirement system benefits from the list of exceptions to the "state or local public benefit" definition, meaning these benefits would now be subject to the eligibility documentation requirements.

Maintains existing requirements that applicants for state or local public benefits must submit documentation proving lawful presence in the United States, such as Arizona driver licenses, birth certificates, passports, or immigration documents.

Retains provisions making it a class 2 misdemeanor for state or political subdivision employees to fail to report discovered violations of federal immigration law when administering public benefits.