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Arizona – Lexie’s Law for Disabled and Displaced Students Tax Credit Scholarship Program


Arizona – Lexie’s Law for Disabled and Displaced Students Tax Credit Scholarship Program

The Arizona legislature enacted “Lexie’s Law” in 2009. The program, a tax-credit scholarship for students with special needs, launched in the same year. Learn more about how the program works on this page, including eligibility, funding, regulations, and more.

Program Fast Facts

  • America’s first tax-credit scholarship program for students with special needs

  • 349 participating students (2013–14)

  • 12 percent of students eligible statewide

  • 91 participating schools (2013–14)

  • 8 scholarship organizations awarding scholarships (2013–14)

  • Average scholarship value: $4,648 (2013–14)

  • Value as a percentage of public school per-student spending: 64 percent

Program Details

Arizona’s Lexie’s Law for Disabled and Displaced Students Tax Credit Scholarship Program Participation

Students Participating
School Year Ending

Click the + symbols to learn more about this program’s details.

Arizona offers tax credits to businesses and stockholders supporting School Tuition Organizations (STOs), nonprofits that provide private school scholarships to students with special needs and those in foster care.

Student Funding

Scholarship amounts may be awarded up to the lesser of the private school tuition or 90 percent of the state funding that otherwise would go to that pupil had he or she remained in public school. That amount varies depending on the services the student’s disability requires. Individual STOs have discretion to award scholarships of less than the allowed amount.

The total credits claimed by businesses and stockholders of S-Corporations cannot exceed $5 million in a given year.

Student Eligibility

Students are eligible if they have been identified by a school district as having a disability under the Individuals with Disabilities Education Act or Section 504 of the Rehabilitation Act, or if they are now, or have ever been, in the Arizona foster care system. Students must also either be an enrollee in a kindergarten or prekindergarten private school program for students with disabilities, a public school student for the prior semester of the current school year or at least 90 days in the previous year, or a dependent of an active-duty member of the military stationed in Arizona.

Rules and Regulations

  • Income Limit: None
  • Prior Year Public School Requirement: Yes
  • Geographic Limit: Statewide
  • Enrollment Cap: None
  • Scholarship Cap: 90 percent State Funding
  • Testing Mandates: None
  • Credit Value: 100 percent
  • Total Credit Cap: None
  • Budget Cap: $5 million
  • Limited to students with special needs, students in foster care, and children of active military members stationed in Arizona
  • STO Requirements:
    • Use at least 90 percent of contributions for scholarships
    • Make scholarships available for more than one school
    • Allow the state to verify that scholarships are awarded to students attending a qualified school
    • Annually report to the state:
      • Data on accepted contributions, grants awarded, amount of money being held for identified student scholarships in future years, list of participating schools with the number and dollar amount of scholarship awards received, salary of the STO’s top three officials for the fiscal year, and proof of independent review of financial statements by a certified public accountant

Governing Statutes

Ariz. Rev. Stat. §§ 15-891; 43-1184; 43-1501 through 1507; and 20-224.07

Legal History

No legal challenges have been filed against the program.

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