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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

  • 936 participating students (2015–16)

  • 12 percent of students eligible statewide

  • 148 participating schools (2015–16)

  • 14 scholarship organizations awarding scholarships (2015–16)

  • Average scholarship value: $4,696 (2015–16)

  • Value as a percentage of public school per-student spending: 63 percent

Program Details

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

Scholarships Awarded
School Year Ending

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

Arizona allows corporations, including stockholders of S-Corporations, to receive tax credits for donating to school tuition organizations (STOs), nonprofits that provide private school scholarships to children with special needs and students who are currently, or have ever been, part of the Arizona foster care system.

Student Funding

STOs may award scholarships 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 may award scholarships of less than the allowed amount.

The total credits claimed cannot exceed $5 million in a given year.

Student Eligibility

Students are eligible if they (1) have a Multidisciplinary Evaluation Team (MET) or Individualized Education Plan (IEP) from an Arizona public school, (2) have a 504 plan from an Arizona public school or (3) are now or have ever been in the Arizona foster care system.

EdChoice Expert Feedback

For Lexie’s Law to improve, lawmakers should increase the $5 million cap on tax credits available to donors. As for funding power, the possibility of receiving 90 percent of state funding is generous. However, the actual average scholarship amount is far less than per-pupil funding in Arizona public schools for all students, not even taking into account the larger amounts usually spent to serve students with special needs. The program avoids unnecessary regulations on participating private schools such as admissions or testing requirements.

Rules and Regulations

  • Income Limit: None
  • Prior Year Public School Requirement: None
  • 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 and students in foster care


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 have been awarded to students attending a qualified school
  • Annually report to the state:
    • Data on accepted contributions, grants awarded, the amount of money being held for identified student scholarships in future years, a list of participating schools with the number and dollar amount of scholarship awards received, the 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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