BILL NUMBER: AB 1997 CHAPTERED 09/16/04 CHAPTER 549 FILED WITH SECRETARY OF STATE SEPTEMBER 16, 2004 APPROVED BY GOVERNOR SEPTEMBER 16, 2004 PASSED THE ASSEMBLY AUGUST 16, 2004 PASSED THE SENATE AUGUST 10, 2004 AMENDED IN SENATE AUGUST 9, 2004 AMENDED IN SENATE JULY 1, 2004 AMENDED IN ASSEMBLY APRIL 13, 2004 INTRODUCED BY Committee on Higher Education (Liu (Chair), Jackson, Lowenthal, Matthews, Negrete McLeod, and Pacheco) (Coauthors: Senators Denham and McPherson) FEBRUARY 13, 2004 An act to amend Sections 66025.6, 69750, 69750.3, 69750.5, and 69751 of, to add Sections 69751.2 and 69751.8 to, and to repeal and add Section 69751.3 of, the Education Code, relating to postsecondary education. LEGISLATIVE COUNSEL'S DIGEST AB 1997, Committee on Higher Education. Postsecondary education: student financial aid: National Guard. Existing law, until January 1, 2007, grants to qualifying members of the National Guard, the State Military Reserve, and the Naval Militia an entitlement to academic leave when active duty, as defined, interrupts undergraduate college attendance at a public postsecondary institution in this state for the purpose of pursuing an undergraduate degree. Existing law also authorizes a qualifying member who takes that academic leave to have his or her transcript cleared for that academic term. Existing law establishes, commencing with the 2004-05 fiscal year, and ending with the 2006-07 fiscal year, the National Guard Assumption Program of Loans for Education, for qualifying members of the National Guard, the State Military Reserve, and the Naval Militia as defined, who seek, or who have completed, baccalaureate degrees at institutions of higher education within this state, who receive a loan under a designated loan program, and who complete a certain period of service as a qualifying member. Under the National Guard Assumption Program of Loans for Education, a qualifying member is eligible to receive up to $11,000 in loan assumption payments if he or she completes up to 4 years of qualifying service. This bill would specify that a qualifying member of the National Guard, the State Military Reserve, or the Naval Militia is entitled to academic leave throughout the period that his or her loan payments are assumed under the National Guard Assumption Program of Loans for Education. The bill would extend the entitlement to academic leave to a qualifying member who attends a private institution of higher education in this state. The bill would repeal the authority of a qualifying member to have his or her transcript cleared for the term in which academic leave is taken. The bill would also authorize a qualifying member who has received a baccalaureate degree to participate in this program. This bill would provide that the program is established to provide an incentive for persons to enlist in the National Guard, the State Military Reserve, or the Naval Militia. The bill would require a person to agree to enlist, or reenlist, in the National Guard, the State Military Reserve, or the Naval Militia in order to qualify to apply to enter into an agreement for loan assumption under the program. The bill would require the Student Aid Commission to adopt initial regulations for the program within 6 months of the effective date of the initial appropriation funding the program. The bill would require, in any fiscal year in which the commission determines that funding is insufficient to fully support the program, that the commission, to the extent feasible, grant priority to individuals who are financially needy, as defined, and individuals who have been called to full-time active military duty. The bill would prohibit the Student Aid Commission from issuing, in any fiscal year, more than the number of warrants for the assumption of loans under the program that are authorized in the annual Budget Act for that purpose for that year. The bill would incorporate additional changes to Sections 66025.6, 69750, and 69750.3 of the Education Code proposed by SB 1322, to become operative only if SB 1322 and this bill are both chaptered and become effective on or before January 1, 2005, both bills affect these sections, and this bill is chaptered last. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 66025.6 of the Education Code is amended to read: 66025.6. (a) As used in this section, the following terms have the following meanings: (1) "Active duty" means either of the following: (A) Active federal service or full-time national guard duty on behalf of the United States of America either voluntarily, or when involuntarily ordered to duty by appropriate authorities under Title 10 or Title 32 of the United States Code during a period of armed conflict, mobilization, contingency operations, or other crisis. (B) (i) Active military duty in the service of the state when the Governor has issued a proclamation of a state of insurrection pursuant to Section 143 of the Military and Veterans Code or a proclamation of a state of emergency; or (ii) When the National Guard is on active duty pursuant to Section 146 of the Military and Veterans Code, or is called to active service or duty under Chapter 7.5 (commencing with Section 400) of Part 1 of Division 2 of the Military and Veterans Code, and a certificate of satisfactory service, or an equivalent thereof, is issued by the Military Department. (2) "Qualifying member" means a person who: (A) Is a resident, as defined in Section 68017. (B) Is currently an active member of, and has satisfactorily served for at least one year in, the California National Guard, the State Military Reserve, or the Naval Militia, and maintains satisfactory service throughout the period that he or she receives consideration pursuant to this section, or throughout the period that his or her student loan payments are assumed under Article 12.5 (commencing with Section 69750) of Chapter 2 of Part 42, whichever is longer. (C) Has completed a baccalaureate degree, or is currently enrolled, and in good standing, in an undergraduate program of instruction, or has been admitted to a program in which he or she will be enrolled, on at least a half-time basis, at an institution of higher education in this state. (b) (1) (A) Any qualifying member who undertakes active duty is entitled to an academic leave of absence for any academic session that the qualifying member is unable to attend or complete because he or she is on active duty. (B) It is the intent of the Legislature that a graduate or undergraduate student who is called to active military duty as a member of the California National Guard, the State Military Reserve, or the Naval Militia not suffer any academic penalty as a result of any academic leave of absence that he or she takes in accordance with this paragraph. (2) To the extent feasible, the graduation requirements for a qualifying member who, within one year of returning from active duty, resumes his or her studies at the same postsecondary educational institution shall be the same as the graduation requirements at the time the qualifying member initially enrolled. (c) The Military Department shall determine whether an individual meets the requirements of "active duty" and "qualifying member," as they are set forth in subdivision (a). The department shall issue a certificate to individuals who meet those requirements. (d) This section shall remain in effect only until January 1, 2007, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2007, deletes or extends that date. SEC. 1.5. Section 66025.6 of the Education Code is amended to read: 66025.6. (a) As used in this section, the following terms have the following meanings: (1) "Active duty" means either of the following: (A) Active federal service or full-time national guard duty on behalf of the United States of America either voluntarily, or when involuntarily ordered to duty by appropriate authorities under Title 10 or Title 32 of the United States Code during a period of armed conflict, mobilization, contingency operations, or other crisis. (B) (i) Active military duty in the service of the state when the Governor has issued a proclamation of a state of insurrection pursuant to Section 143 of the Military and Veterans Code or a proclamation of a state of emergency; or (ii) When the National Guard is on active duty pursuant to Section 146 of the Military and Veterans Code, or is called to active service or duty under Chapter 7.5 (commencing with Section 400) of Part 1 of Division 2 of the Military and Veterans Code, and a certificate of satisfactory service, or an equivalent thereof, is issued by the Military Department. (2) "Qualifying member" means a person who: (A) Is a resident, as defined in Section 68017. (B) Is currently an active member of, and has satisfactorily served for at least one year in, the California National Guard, the State Military Reserve, or the Naval Militia, and maintains satisfactory service throughout the period that he or she receives consideration pursuant to this section, or throughout the period that his or her student loan payments are assumed under Article 12.5 (commencing with Section 69750) of Chapter 2 of Part 42, whichever is longer. (C) Has completed a baccalaureate degree, or is currently enrolled, and in good standing, in an undergraduate program of instruction, or has been admitted to a program in which he or she will be enrolled, on at least a half-time basis, at an institution of higher education in this state, or is enrolled in or has completed a program of instruction in a vocational diploma program as defined in Section 94746 where enrollment qualifies a student for participation in the Federal Family Education Loan Program (20 U.S.C. Sec. 1071 et seq.) or any loan program approved by the Student Aid Commission. (b) (1) (A) Any qualifying member, and any member of the California National Guard, the State Military Reserve, or the Naval Militia who meets the qualifications of subparagraphs (A) and (B) of paragraph (2) of subdivision (a) and who is enrolled, and in good standing in a graduate program of instruction, who undertakes active duty is entitled to an academic leave of absence for any academic session that the person is unable to attend or complete because he or she is on active duty. (B) It is the intent of the Legislature that a graduate or undergraduate student who is called to active military duty as a member of the California National Guard, the State Military Reserve, or the Naval Militia not be academically penalized as a result of any academic leave of absence that he or she takes in accordance with this paragraph. (2) To the extent that it is feasible, graduation requirements for a qualifying member who, within one year of returning from active duty, resumes his or her studies at the same postsecondary educational institution shall be the same as the graduation requirements at the time the qualifying member initially enrolled. (c) The Military Department shall determine whether an individual meets the requirements of "active duty" and "qualifying member," as they are set forth in subdivision (a). The department shall issue a certificate to individuals who meet those requirements. (d) This section shall remain in effect only until January 1, 2012, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2012, deletes or extends that date. SEC. 2. Section 69750 of the Education Code is amended to read: 69750. Commencing with the 2004-05 fiscal year, the National Guard Assumption Program of Loans for Education is established to provide an incentive for persons to enlist or reenlist in the National Guard, the State Military Reserve, or the Naval Militia within the meaning of Section 66025.6 who seek, or who have completed, baccalaureate degrees at institutions of higher education within this state. SEC. 2.5. Section 69750 of the Education Code is amended to read: 69750. Commencing with the 2004-05 fiscal year, the National Guard Assumption Program of Loans for Education is established to provide an incentive for persons to enlist or reenlist in the National Guard, the State Military Reserve, or the Naval Militia within the meaning of Section 66025.6 who seek, or who have completed, degrees at institutions of higher education within this state, or who are enrolled in or have completed a program of instruction in a vocational diploma program, as defined in Section 94746, where enrollment qualifies a student for participation in the Federal Family Education Loan Program (20 U.S.C. Sec. 1071 et seq.) or any loan program approved by the Student Aid Commission for this purpose. SEC. 3. Section 69750.3 of the Education Code is amended to read: 69750.3. (a) A person who meets all of the following conditions is eligible to apply to enter into an agreement for loan assumption, to be redeemed pursuant to Section 69750.5: (1) The person agrees to enlist, or reenlist, in the National Guard, the State Military Reserve, or the Naval Militia. (2) The person is enrolled in an institution of higher education that participates in the loan assumption program set forth in this article. (3) In order to meet the costs associated with obtaining a baccalaureate degree, the applicant has received, or is approved to receive, a loan under one or more of the following designated loan programs: (A) The Federal Family Education Loan Program (20 U.S.C. Sec. 1071 et seq.). (B) Any loan program approved by the Student Aid Commission. (b) A person participating in the program pursuant to this article shall not be eligible to enter into more than one agreement under this article. SEC. 3.5. Section 69750.3 of the Education Code is amended to read: 69750.3. (a) A person who meets all of the following requirements is eligible to apply to enter into an agreement for loan assumption, to be redeemed pursuant to Section 69750.5: (1) The person agrees to enlist, or reenlist, in the National Guard, the State Military Reserve, or the Naval Militia. (2) The person is enrolled in an institution of higher education or a vocational program, as defined in Section 94746, that participates in the loan assumption program set forth in this article. (3) In order to meet the costs associated with obtaining a degree or associated with enrollment in a qualified vocational diploma program, as defined in Section 94746, the applicant has received, or is approved to receive, a loan under one or more of the following designated loan programs: (A) The Federal Family Education Loan Program (20 U.S.C. Sec. 1071 et seq.). (B) Any loan program approved by the Student Aid Commission. (b) A person participating in the program pursuant to this article shall not be eligible to enter into more than one agreement under this article. SEC. 4. Section 69750.5 of the Education Code is amended to read: 69750.5. The Student Aid Commission shall commence loan assumption payments, as required by Section 69750.7, upon receipt of a certificate from the Military Department verifying that the applicant has completed the enlistment and military service requirements, and upon determination that the applicant has otherwise met the requirements of the loan assumption agreement and all other conditions of this article. SEC. 5. Section 69751 of the Education Code is amended to read: 69751. (a) The Student Aid Commission shall administer this article, and, in consultation with the Military Department, shall adopt rules and regulations for that purpose. The rules and regulations shall include, but need not be limited to, provisions regarding the period of time for which a loan assumption agreement shall remain valid, the reallocation of funds that are not utilized, and the development of projections for funding purposes. The commission shall solicit the advice of representatives from postsecondary educational institutions regarding the proposed rules and regulations. The commission shall adopt initial regulations for the program within six months of the effective date of the initial appropriation funding the program. (b) The Student Aid Commission shall work in conjunction with lenders participating in federal loan programs to develop a streamlined application process for participation in the program set forth in this article. SEC. 6. Section 69751.2 is added to the Education Code, to read: 69751.2. In any fiscal year in which the commission determines that funding for this article is insufficient to fully support this program, the commission shall, to the extent feasible, grant the following applicants priority for participation in the program: (a) Individuals who are financially needy, as indicated by a household income and asset level that is at or below the maximum set for participants in the Cal Grant A program under Section 69432.7. (b) Individuals who have been called to full-time active military duty. SEC. 7. Section 69751.3 of the Education Code is repealed. SEC. 8. Section 69751.3 is added to the Education Code, to read: 69751.3. (a) The Student Aid Commission shall report annually to the Legislature regarding program participation, including, but not necessarily limited to, both of the following, as categorized on the basis of age, ethnicity, and gender: (1) The total number of participants in the program established by this article. (2) The number of participants who receive a loan assumption benefit, classified by payment year. (b) The Legislative Analyst's Office, in consultation with the Military Department and the Student Aid Commission, shall evaluate the operation of the benefits and programs established pursuant to this article, as well as those benefits established pursuant to Section 66025.6. This evaluation shall be submitted, in writing, to the Director of Finance and the Legislature no later than July 1, 2006. SEC. 9. Section 69751.8 is added to the Education Code, to read: 69751.8. Notwithstanding any other provision of law, in any fiscal year, the Student Aid Commission may issue no more than the number of warrants that are authorized by the Governor and the Legislature in the annual Budget Act for that year for the assumption of loans pursuant to this article. SEC. 10. Section 1.5 of this bill incorporates amendments to Section 66025.6 of the Education Code proposed by both this bill and SB 1322. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2005, (2) each bill amends Section 66025.6 of the Education Code, and (3) this bill is enacted after SB 1322, in which case Section 1 of this bill shall not become operative. SEC. 11. Section 2.5 of this bill incorporates amendments to Section 69750 of the Education Code proposed by both this bill and SB 1322. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2005, (2) each bill amends Section 69750 of the Education Code, and (3) this bill is enacted after SB 1322, in which case Section 2 of this bill shall not become operative. SEC. 12. Section 3.5 of this bill incorporates amendments to Section 69570.3 of the Education Code proposed by both this bill and SB 1322. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2005, (2) each bill amends Section 69750.3 of the Education Code, and (3) this bill is enacted after SB 1322, in which case Section 3 of this bill shall not become operative.