BILL NUMBER: AB 1381 CHAPTERED 09/29/02 CHAPTER 1055 FILED WITH SECRETARY OF STATE SEPTEMBER 29, 2002 APPROVED BY GOVERNOR SEPTEMBER 29, 2002 PASSED THE ASSEMBLY AUGUST 29, 2002 PASSED THE SENATE AUGUST 27, 2002 AMENDED IN SENATE JUNE 28, 2002 AMENDED IN SENATE MAY 29, 2002 AMENDED IN ASSEMBLY JANUARY 22, 2002 AMENDED IN ASSEMBLY JANUARY 7, 2002 INTRODUCED BY Assembly Member Florez FEBRUARY 23, 2001 An act to amend Section 69995 of the Education Code, relating to postsecondary education. LEGISLATIVE COUNSEL'S DIGEST AB 1381, Florez. Postsecondary education: Governor's Scholarship Programs. Existing law establishes the Governor's Scholarship Programs, under which qualified pupils may receive a Governor's Scholars or Governor's Distinguished Mathematics and Science Scholars award for attaining specified scores on portions of the statewide achievement tests administered under the Standardized Testing and Reporting Program. In order for a pupil to be eligible for a scholarship award, the pupil is required, among other things, to have been enrolled at a California public school for at least 12 consecutive months immediately preceding the administration of the statewide achievement test. This bill would additionally allow a pupil to be eligible for a Governor's Scholars award or Governor's Distinguished Mathematics and Science Scholars award if the pupil has been enrolled at a California public school for at least 110 days of the school year in which the test is administered and at least 110 days of the school year immediately preceding the administration of the test. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 69995 of the Education Code is amended to read: 69995. (a) It is the intent of the Legislature in enacting this article to encourage high school pupils to study hard and master the California academic content standards adopted by the State Board of Education and to excel in mathematics and the sciences. (b) The Scholarshare Investment Board, known hereafter as "the board," unless otherwise specified, shall administer the programs authorized by this article, including the adoption of rules and regulations as provided by subdivision (d) of Section 69981, and in so doing shall cooperate with the State Department of Education, the Treasurer's office, the Controller, the college board, private test publishing companies, and other entities necessary to ensure the accurate and timely identification and reporting of award recipients, granting of awards, and administration of these programs. The State Department of Education shall ensure that the contract with the test publisher selected pursuant to Section 60642 reflects the reporting requirements of this article and that the publisher meets those requirements. (c) The definitions in Section 69980 apply to this article. (d) To be eligible for an award pursuant to the programs authorized by this article, a pupil shall meet all of the following eligibility criteria: (1) The pupil has taken the achievement test authorized by Section 60640 in grade 9, 10, or 11. (2) The pupil has been enrolled at a California public school for at least 12 consecutive months immediately preceding, or has been in attendance for at least 110 days of the school year in which the test is administered and at least 110 days of the school year immediately preceding, the administration of the achievement test specified in paragraph (1), as evidenced by his or her school records obtained pursuant to administration of the program authorized by this article. (3) The pupil has taken both of the following: (A) The nationally normed reading and mathematics portions of the achievement test, as specified by the State Board of Education and authorized by Section 60640. (B) The English/language arts and mathematics portions of the achievement test authorized by Section 60640 that are augmented and aligned, pursuant to Section 60643, with the California academic content standards, unless otherwise exempted by action of the State Board of Education. (e) Awards made pursuant to this article shall be an entitlement to pupils identified as qualifying for an award pursuant to this article. The State Department of Education shall annually provide the board with an estimate of the number of pupils with qualifying scores by October 15. Upon receipt of the estimate on or before October 15, the board shall deposit a single amount equal to the sum of the amounts of the awards earned by qualifying pupils into a single account separate and apart from all participant accounts within the Golden State Scholarshare Trust in the names of those pupils. Scholarship assets may not be commingled for investment purposes with participant accounts. Notwithstanding Section 69991, all assets of the scholarship account, while part of the Golden State Scholarshare Trust, are owned by the state until used to pay the qualified higher education expenses of the beneficiary. (f) The entity contracted for the assessment authorized by Section 60640 shall annually, on or before January 15, provide the board a digital report that contains a final list of pupils identified as qualifying for an award pursuant to this article. To ensure that this digital report is accurate and is prepared on a timely basis, all corrections to and revisions of the data that are used to prepare the digital report shall be submitted to the State Department of Education on or before November 15 of the preceding year. (g) Deposits made to this account shall be invested according to the guidelines established by the board pursuant to the requirements of state and federal law. The deposits shall be invested through a guaranteed funding agreement with an interest rate to be declared annually by the investment manager, or through another investment determined by the board to be equally or more secure. For purposes of this section, a guaranteed funding agreement is an approved investment vehicle for state-owned scholarship funds. (h) Nothing in this article shall be construed to prevent any pupil from seeking private or other funding sources to supplement the amount of any funds awarded pursuant to this article. (i) Award recipients shall be informed that the programs authorized by this article do not guarantee in any way that higher education expenses will be equal to projections and estimates provided by the board, nor that the claimant will be guaranteed any of the following: (1) Admission to an institution of higher education. (2) If admitted, a determination that the award recipient is a resident for tuition purposes by the institution of higher education. (3) Continued attendance at the institution of higher education following admission. (4) Graduation from the institution of higher education. (5) Savings sufficient to fully cover all qualified education expenses of attending an institution of higher education. (j) Notwithstanding any other provision of state law, any funds awarded pursuant to this article shall augment and not supplant student financial aid from other public sources, inclusive of calculating eligibility for student financial aid. (k) Notwithstanding any other provision of law, the awards and earnings claimed by a recipient pursuant to this article shall be exempt from state income tax liability. (l) To the extent allowed under federal law, any funds awarded pursuant to this article may not be considered in the federal needs analysis for student financial aid, as they are an asset of the state until used for the payment of qualified higher education expenses.