Arizona Promise and Workforce Development Act
ONE PAGE SUMMARY
ARIZONA PROMISE AND WORKFORCE DEVELOPMENT ACT (AMENDED)
What is it?
A proposed Arizona law that provides free trade education for rural Arizonans. It covers tuition, tools, and fees for high demand jobs like construction, healthcare, and renewable energy at community colleges and trade schools. In return, you work in Arizona after graduating. If you want to start a local business instead, it offers startup grants and support.
This amended version adds explicit voluntary wage incentives for employers who hire Promise Act graduates.
Core Provisions
Free Trade Education
Covers tuition, books, tools, fees, and reasonable living expenses for eligible rural Arizonans attending community colleges or trade schools in high demand fields.
Work Commitment
Graduates agree to work in Arizona for three years after completing their program, or one year for every year of funding received, whichever is less.
Startup Grant Alternative
Graduates who want to start a local business may apply for a startup grant instead of traditional employment. The grant covers business planning, licensing, equipment, and first year operating expenses up to $25,000.
Voluntary Wage Incentives for Employers
Employers who hire Promise Act graduates receive a procurement preference when bidding on state contracts. The preference is structured as follows:
- Base preference for any employer hiring a Promise graduate: 5 points
- Additional preference for employers paying wages at least double the Arizona minimum wage: 10 points
- Additional preference for employers also providing health benefits: 5 points
- Maximum total preference: 20 points
Employer Tax Credit
Employers who hire Promise Act graduates may claim a tax credit of $2,500 per graduate per year for up to three years, provided the graduate remains employed for at least nine months of each year.
No Mandate, Only Incentive
Nothing in this act requires any employer to pay any particular wage or provide any particular benefit. The wage and health preferences are voluntary incentives. Employers may choose to pay lower wages and forego the preference points and tax credit.
Verification and Enforcement
The Arizona Commerce Authority shall verify wage, benefit, and employment certifications. False certification results in disqualification from the program and repayment of any tax credits or preferences received.
Relationship to Existing Law
This act does not conflict with A.R.S. section 34-321 because it mandates nothing. It offers voluntary incentives and preferences as evaluation criteria, not conditions of bidding.
Bottom Line
This act trains rural Arizonans for good jobs, keeps them in Arizona, rewards employers who pay good wages and health benefits, and helps new graduates start local businesses. It is voluntary, verifiable, and fair.
Read the full bill below.
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FULL BILL TEXT
ARIZONA PROMISE AND WORKFORCE DEVELOPMENT ACT
AN ACT AMENDING TITLE 15, CHAPTER 14, ARIZONA REVISED STATUTES, BY ADDING A NEW ARTICLE TO BE KNOWN AS ARTICLE 10, THE ARIZONA PROMISE AND WORKFORCE DEVELOPMENT ACT, AND AMENDING TITLE 43, CHAPTER 10, ARIZONA REVISED STATUTES, RELATING TO TAX CREDITS
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ARIZONA
SECTION 1. SHORT TITLE
This act shall be known and may be cited as the Arizona Promise and Workforce Development Act.
SECTION 2. FINDINGS AND DECLARATIONS
The Legislature finds and declares:
1. Rural Arizona communities face persistent economic challenges including outmigration of young people, limited job opportunities, and a mismatch between workforce skills and employer needs.
2. Trade education at community colleges and technical schools provides a direct pathway to high demand jobs in construction, healthcare, renewable energy, advanced manufacturing, and information technology.
3. The cost of tuition, tools, and fees should not prevent rural Arizonans from accessing these opportunities.
4. When the state invests in a student's education, it is reasonable to ask that student to work in Arizona after graduation.
5. Some graduates will want to start their own businesses rather than work for existing employers. Startup grants support local entrepreneurship.
6. Employers who hire Promise Act graduates should be encouraged to pay good wages and provide health benefits, but nothing in this act shall mandate any particular wage or benefit.
7. Voluntary incentives including procurement preferences and tax credits are appropriate tools to encourage employer participation.
SECTION 3. DEFINITIONS
In this act:
1. Eligible student means a resident of Arizona who:
a. Has lived in a rural Arizona county for at least two years immediately preceding application.
b. Has a household income at or below 200 percent of the federal poverty level.
c. Is enrolled or accepted for enrollment in an eligible program at an eligible institution.
d. Signs a written commitment to complete the program and fulfill the work or startup requirements of this act.
2. Rural Arizona county means any county in Arizona with a population of less than 500,000 according to the most recent decennial census. This includes but is not limited to Cochise, Graham, Santa Cruz, Greenlee, La Paz, Gila, Navajo, Apache, and Yavapai counties.
3. Eligible institution means a community college district in Arizona or an accredited trade school, technical college, or vocational training provider located in Arizona.
4. Eligible program means a certificate or degree program in a high demand field designated by the Arizona Commerce Authority in consultation with the Arizona Department of Economic Security. High demand fields include construction trades, healthcare, renewable energy technology, advanced manufacturing, information technology, and commercial truck driving.
5. Promise Award means payment of tuition, fees, books, tools, materials, and reasonable living expenses for an eligible student for up to two years or the normal duration of the eligible program, whichever is shorter.
6. Work commitment means the graduate agrees to work in Arizona for three years after completing the program, or one year for every year of Promise Award funding received, whichever is less.
7. Startup grant means a grant of up to $25,000 to a Promise Act graduate who chooses to start a local business instead of traditional employment.
8. Qualified Promise employer means an employer that hires a Promise Act graduate and certifies to the Arizona Commerce Authority that the graduate is employed in a position related to the graduate's program of study.
9. Qualified living wage employer means a qualified Promise employer that certifies that the Promise Act graduate will be paid wages at least double the Arizona minimum wage in effect at the time of hire.
10. Qualified health benefit employer means a qualified living wage employer that also certifies it will provide employer-paid health insurance or a health savings account contribution of at least $3,000 per year for the Promise Act graduate.
11. Preference points means additional score points added to a bidder's evaluation total before final award determination.
SECTION 4. ARIZONA PROMISE AWARD
A. The Arizona Promise Award is established within the Arizona Commerce Authority.
B. An eligible student may apply for a Promise Award on a form prescribed by the Authority.
C. The Authority shall approve applications on a first come, first served basis until funds are exhausted for that fiscal year.
D. A Promise Award shall cover:
1. Full tuition and mandatory fees at the eligible institution.
2. Required books, tools, materials, and safety equipment.
3. A living stipend of up to $1,000 per month during months when the student is enrolled.
4. Transportation assistance of up to $500 per semester.
E. A Promise Award shall not exceed $15,000 per student per academic year.
F. The Authority shall disburse Promise Award funds directly to the eligible institution and to the student as provided in this section.
SECTION 5. WORK COMMITMENT
A. Before receiving a Promise Award, each eligible student shall sign a written work commitment agreement with the Arizona Commerce Authority.
B. The work commitment agreement shall provide that upon completion of the eligible program, the graduate shall:
1. Work in Arizona for three years, or one year for every year of Promise Award funding received, whichever is less.
2. Provide annual verification of employment and Arizona residency to the Authority.
3. Report any change in employment status within thirty days.
C. If a graduate fails to fulfill the work commitment, the amount of the Promise Award shall convert to a loan repayable to the state with interest at a rate of 5 percent per year.
D. The Authority may grant waivers or deferrals for:
1. Military service.
2. Serious medical disability.
3. Involuntary job loss with good faith efforts to find new employment in Arizona.
4. Other extenuating circumstances determined by the Authority.
SECTION 6. STARTUP GRANT ALTERNATIVE
A. A Promise Act graduate who wishes to start a local business instead of traditional employment may apply to the Arizona Commerce Authority for a startup grant.
B. The graduate shall submit a business plan acceptable to the Authority demonstrating:
1. The business will be located in a rural Arizona county.
2. The business will create at least one full time job for the graduate.
3. The business has a reasonable prospect of success.
C. A startup grant may cover:
1. Business planning and licensing fees.
2. Equipment and initial inventory.
3. First year operating expenses including rent and utilities.
4. Technical assistance and mentoring.
D. A startup grant shall not exceed $25,000.
E. A graduate who receives a startup grant is not subject to the work commitment under Section 5 but shall operate the business in Arizona for at least three years. If the business closes before three years, the grant amount shall convert to a loan repayable to the state with interest at a rate of 5 percent per year.
SECTION 7. VOLUNTARY WAGE AND HEALTH BENEFIT PREFERENCES FOR EMPLOYERS
A. For any state or local contract with an estimated value of $100,000 or more, the awarding agency shall apply the following preference points to bidders who are qualified Promise employers under this act:
1. Base preference for any qualified Promise employer: 5 points.
2. Additional preference for a qualified living wage employer: 10 points.
3. Additional preference for a qualified health benefit employer: 5 points.
B. The total maximum preference points available under this section are 20 points.
C. Preference points shall be added to the bidder's total score before final award determination. A bidder that is not the lowest price may still be awarded the contract if its total score including preference points exceeds the lowest bidder's score by at least 5 points.
D. Preference points under this section are in addition to any preference points available under the Arizona First Procurement Act or any other law.
E. Nothing in this section shall be construed as requiring any employer to pay any particular wage or provide any particular benefit. The preferences set forth herein are voluntary incentives. Employers may choose to pay lower wages or provide fewer benefits and forego the preference points.
SECTION 8. EMPLOYER TAX CREDIT
A. A taxpayer that employs a Promise Act graduate in a position related to the graduate's program of study may claim a tax credit against the taxpayer's Arizona income tax liability.
B. The credit is $2,500 per Promise Act graduate per year for up to three years.
C. To claim the credit, the employer shall certify to the Arizona Commerce Authority and the Arizona Department of Revenue that:
1. The Promise Act graduate has been employed for at least nine months of the taxable year.
2. The graduate's position is related to the graduate's program of study.
3. The employer has complied with all wage and benefit certifications if any.
D. The credit shall not exceed the taxpayer's tax liability for the taxable year. Any unused credit may be carried forward for up to five taxable years.
E. The total amount of credits claimed under this section in any fiscal year shall not exceed $5,000,000.
SECTION 9. VERIFICATION AND ENFORCEMENT
A. The Arizona Commerce Authority shall verify all certifications made under this act including:
1. Student eligibility and work commitment compliance.
2. Employer wage and benefit certifications.
3. Startup grant business operations.
B. The Authority may request payroll records, health insurance documentation, or other reasonable evidence.
C. Any person or business that falsely certifies under this act shall be:
1. Disqualified from participating in the Promise program for a period of five years.
2. Required to repay any Promise Award, startup grant, tax credit, or other benefit received.
3. Subject to civil penalties of up to $10,000 per false certification.
D. The Attorney General may bring an action to enforce this section.
SECTION 10. NO MANDATE; VOLUNTARY INCENTIVE ONLY
A. Nothing in this act shall be construed as requiring any employer to pay any particular wage or provide any particular benefit.
B. Employers may choose to pay lower wages or provide fewer benefits and forego the preference points and tax credit created in this act.
C. No contract shall be awarded or denied solely on the basis of wage or benefit levels. Preference points are one factor among multiple evaluation criteria.
SECTION 11. RELATIONSHIP TO EXISTING LAW
A. This act shall be construed consistently with A.R.S. section 34-321. Nothing in this act requires a prevailing wage, a project labor agreement, or a neutrality agreement as a condition of bidding on or performing a public works contract.
B. The preference points created in this act are evaluation criteria, not conditions of bidding. They do not violate A.R.S. section 34-321 or any other provision of Arizona law.
SECTION 12. FUNDING
A. The Arizona Promise and Workforce Development Fund is established in the state treasury.
B. The Legislature shall appropriate $10,000,000 to the Fund in fiscal year 2027 and such sums as necessary thereafter.
C. Money in the Fund is continuously appropriated to the Arizona Commerce Authority for the purposes of this act.
D. The Authority may accept private donations, grants, and federal funds for deposit into the Fund.
SECTION 13. SEVERABILITY
If any provision of this act or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the act that can be given effect without the invalid provision or application. To this end, the provisions of this act are severable.
SECTION 14. EFFECTIVE DATE
This act shall become effective ninety days after the signature of the Governor or upon the expiration of the period for gubernatorial action as provided by law.
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