BILL NUMBER: AB 187	ENROLLED
	BILL TEXT

	PASSED THE SENATE  OCTOBER 14, 2009
	PASSED THE ASSEMBLY  OCTOBER 26, 2009
	AMENDED IN SENATE  SEPTEMBER 4, 2009

INTRODUCED BY   Committee on Budget (Evans (Chair), Arambula, Beall,
Blumenfield, Brownley, Caballero, Carter, De La Torre, Feuer, Hill,
Huffman, Monning, Ruskin, and Swanson)

                        FEBRUARY 2, 2009

   An act to amend Sections 69434, 69435, and 69436 of, and to add
Article 8 (commencing with Section 69450) to Chapter 1.7 of Part 42
of Division 5 of Title 3 of, the Education Code, relating to student
financial aid, making an appropriation therefor, and declaring the
urgency thereof, to take effect immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 187, Committee on Budget. Cal Grant Program.
   (1) Existing law, the Ortiz-Pacheco-Poochigian-Vasconcellos Cal
Grant Program, establishes, among other award programs, the Cal Grant
A and B Entitlement awards and the California Community College
Transfer Cal Grant Entitlement awards under the administration of the
Student Aid Commission, and establishes eligibility requirements for
awards under these programs for participating students attending
qualifying institutions.
   This bill would require the commission to adopt regulations
establishing a pilot program for an alternative Cal Grant delivery
system under which a qualifying institution, if it elects to
participate and meets specified requirements, would be authorized to
voluntarily administer award grants under the Cal Grant A and B
Entitlement Programs and the California Community College Transfer
Cal Grant Entitlement Program. The bill would prohibit the commission
from implementing the pilot alternative delivery system until the
commission meets prescribed conditions, including receiving
commitments from at least 30, but not more than 35, qualifying
institutions electing to participate in the alternative delivery
system and to pay the costs associated with developing and
implementing the pilot alternative delivery system. The bill would
prescribe requirements for the selection of qualifying institutions
within the University of California, California State University, and
California Community Colleges for participation in the pilot
program.
   The bill would require the Legislative Analyst's Office to report
to the Legislature and the Governor regarding the implementation of
the program by January 10, 2011.
   The bill would appropriate $4,300,000 from the General Fund to the
commission for the support of the commission for the 2009-10 fiscal
year.
   (2) This bill would declare that it is to take effect immediately
as an urgency statute.
   Appropriation: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 69434 of the Education Code is amended to read:

   69434.  (a) A Cal Grant A award shall be used only for tuition or
student fees, or both, in a for-credit instructional program with a
length of not less than two academic years. Each student who meets
the Cal Grant A qualifications as set forth in this article shall be
guaranteed an award. The amount of any individual award is dependent
on the cost of tuition or fees, or both, at the qualifying
institution at which the student is enrolled. For each applicant, the
award amount shall not exceed the amount of the calculated financial
need.
   (b) Pursuant to Section 66021.2, any California resident is
entitled to a Cal Grant A award, and the commission, or a qualifying
institution pursuant to Article 8 (commencing with Section 69450),
shall allocate that award, if all of the following criteria are met:
   (1) The student has submitted, pursuant to Section 69432.9, a
complete financial aid application, submitted or postmarked no later
than March 2 of the academic year of high school graduation or its
equivalent for the award year immediately following the academic year
of high school graduation or its equivalent, or no later than March
2 of the academic year following high school graduation or its
equivalent for the second award year following the year of high
school graduation or its equivalent.
   (2) The student demonstrates financial need pursuant to Section
69433.
   (3) The student attains a high school grade point average of at
least 3.0 on a four-point scale.
   (4) The student's household has an income and asset level that
does not exceed the level for Cal Grant A recipients set forth in
Section 69432.7.
   (5) The student is pursuing an undergraduate academic program of
not less than two academic years that is offered by a qualifying
institution.
   (6) The student is enrolled at least part time.
   (7) The student meets the general Cal Grant eligibility
requirements set forth in Article 1 (commencing with Section 69430).
   (8) The student graduated from high school or its equivalent
during or after the 2000-01 academic year.
   (c) A student who meets the Cal Grant A Entitlement Program
criteria specified in this article shall receive a Cal Grant A award
for tuition or fees, or both, pursuant to Section 66021.2.
  SEC. 2.  Section 69435 of the Education Code is amended to read:
   69435.  (a) (1) A Cal Grant B award shall be used only for
tuition, student fees, and access costs in a for-credit instructional
program that is not less than one academic year in length.
   (2) The commission, or a qualifying institution pursuant to
Article 8 (commencing with Section 69450), shall award access grants
in a student's first academic year. In subsequent years, the award
shall include an additional amount to pay tuition or fees, or both,
to attend college at a public or private four-year college or
university or other qualifying institution for all Cal Grant B awards
pursuant to paragraph (2) of subdivision (b) of Section 66021.2. In
no event shall the total award in any year exceed the applicant's
calculated financial need.
   (3) Not more than 2 percent of new Cal Grant B recipients
enrolling for the first time in an institution of postsecondary
education shall be eligible for payments for tuition or fees, or
both, in their first academic year of attendance. The commission
shall adopt regulations specifying the criteria used to determine
which applicants, if any, receive both tuition and fees plus the
access grant in the first year of enrollment. Priority shall be given
to students with the lowest expected family contribution pursuant to
Section 69432.7 and the highest level of academic merit.
   (b) An award for access costs under this article shall be in an
annual amount not to exceed one thousand five hundred fifty-one
dollars ($1,551). This amount may be adjusted in the annual Budget
Act.
  SEC. 3.  Section 69436 of the Education Code is amended to read:
   69436.  (a) A student who was not awarded a Cal Grant A or B award
pursuant to Article 2 (commencing with Section 69434) or Article 3
(commencing with Section 69435) at the time of his or her high school
graduation but, at the time of transfer from a California community
college to a qualifying baccalaureate program, meets all of the
criteria set forth in subdivision (b), shall be entitled to a Cal
Grant A or B award.
   (b) Any California resident transferring from a California
community college to a qualifying institution that offers a
baccalaureate degree is entitled to receive, and the commission, or a
qualifying institution pursuant to Article 8 (commencing with
Section 69450), shall award, a Cal Grant A or B award depending on
the eligibility determined pursuant to subdivision (c), if all of the
following criteria are met:
   (1) A complete official financial aid application has been
submitted or postmarked pursuant to Section 69432.9, no later than
the March 2 of the year immediately preceding the award year.
   (2) The student demonstrates financial need pursuant to Section
69433.
   (3) The student has earned a community college grade point average
of at least 2.4 on a 4.0 scale and is eligible to transfer to a
qualifying institution that offers a baccalaureate degree.
   (4) The student's household has an income and asset level not
exceeding the limits set forth in Section 69432.7.
   (5) The student is pursuing a baccalaureate degree that is offered
by a qualifying institution.
   (6) He or she is enrolled at least part time.
   (7) The student meets the general Cal Grant eligibility
requirements set forth in Article 1 (commencing with Section 69430).
   (8) The student will not be 28 years of age or older by December
31 of the award year.
   (9) The student graduated from a California high school or its
equivalent during or after the 2000-01 academic year.
   (c) The amount and type of the award pursuant to this article
shall be determined as follows:
   (1) For applicants with income and assets at or under the Cal
Grant A limits, the award amount shall be the amount established
pursuant to Article 2 (commencing with Section 69434).
   (2) For applicants with income and assets at or under the Cal
Grant B limits, the award amount shall be the amount established
pursuant to Article 3 (commencing with Section 69435).
   (d) (1) A student meeting the requirements of paragraph (9) of
subdivision (b) by means of high school graduation, rather than its
equivalent, shall be required to have graduated from a California
high school, unless that California resident graduated from a high
school outside of California due solely to orders received from a
branch of the United States Armed Forces by that student or by that
student's parent or guardian that required that student to be outside
of California at the time of high school graduation.
   (2) For the purposes of this article, both of the following are
exempt from the requirements of subdivision (e) of Section 69433.9
and paragraph (9) of subdivision (b) of this section:
   (A) A student for whom a claim under this article was paid prior
to December 1, 2005.
   (B) A student for whom a claim under this article for the 2004-05
award year or the 2005-06 award year was or is paid on or after
December 1, 2005, but no later than October 15, 2006.
   (3) (A) The commission, or a qualifying institution pursuant to
Article 8 (commencing with Section 69450), shall make preliminary
awards to all applicants currently eligible for an award under this
article. At the time an applicant receives a preliminary award, the
commission, or a qualifying institution pursuant to Article 8
(commencing with Section 69450), shall require that applicant to
affirm, in writing, under penalty of perjury, that he or she meets
the requirements set forth in subdivision (e) of Section 69433.9,
paragraph (9) of subdivision (b) of this section, and paragraph (1)
of this subdivision. The commission, or a qualifying institution
pursuant to Article 8 (commencing with Section 69450), shall notify
each person who receives a preliminary award under this paragraph
that his or her award is subject to an audit pursuant to subparagraph
(B).
   (B) The commission shall select, at random, a minimum of 10
percent of the new and renewal awards made under subparagraph (A),
and shall require, prior to the disbursement of Cal Grant funds to
the affected postsecondary institution, that the institution verify
that the recipient meets the requirements of subdivision (e) of
Section 69433.9, paragraph (9) of subdivision (b) of this section,
and paragraph (1) of this subdivision. An award that is audited under
this paragraph and found to be valid shall not be subject to a
subsequent audit.
   (C) Pursuant to Section 69517.5, the commission shall seek
repayment of any and all funds found to be improperly disbursed under
this article.
   (D) On or before November 1 of each year, the commission shall
submit a report to the Legislature and the Governor including, but
not necessarily limited to, both of the following:
   (i) The number of awards made under this article in the preceding
12 months.
   (ii) The number of new and renewal awards selected, in the
preceding 12 months, for verification under subparagraph (B), and the
results of that verification with respect to students at the
University of California, at the California State University, at
independent nonprofit institutions, and at independent for-profit
institutions.
  SEC. 4.  Article 8 (commencing with Section 69450) is added to
Chapter 1.7 of Part 42 of Division 5 of Title 3 of the Education
Code, to read:

      Article 8.  Cal Grant Alternative Delivery System Pilot Program



   69450.  (a) It is the intent of the Legislature, in enacting this
article, to enhance the long-term policy of the
Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program and the state'
s historic commitment, as stated in Section 66021.2, of providing
educational opportunity by ensuring all students with financial need
with access to, and choice of, an institution of higher education.
   (b) It is further the intent of the Legislature that, pursuant to
this article, the commission implement a pilot alternative delivery
system within the Cal Grant Program that would provide program
functions consistent with access to, and choice of, institutions for
students with financial need. The pilot alternative delivery system
should take advantage of, and not impair, the efficiencies of the
recent Internet-based improvements to the commission's Grant Delivery
System by allowing qualifying institutions to elect to award Cal
Grant awards pursuant to Article 2 (commencing with Section 69434),
Article 3 (commencing with Section 69435), and Article 4 (commencing
with Section 69436) for students admitted to those institutions, and
by ensuring that those qualifying institutions function as a one-stop
shop for financial aid information by providing assistance to
students, parents, and high school and community college counselors
seeking information about the Cal Grant Program and other student
financial aid.
   (c) It is the intent of the Legislature that awards and services
to students not be disrupted in the implementation of this article.
   69452.  (a) The commission shall adopt emergency regulations by
July 1, 2010, establishing the pilot alternative Cal Grant delivery
system to allow a qualifying institution to elect to administer Cal
Grant awards under the Cal Grant A Entitlement Program (Article 2
(commencing with Section 69434)), the Cal Grant B Entitlement Program
(Article 3 (commencing with Section 69435)), and the California
Community College Transfer Cal Grant Entitlement Program (Article 4
(commencing with Section 69436)). The regulations shall be consistent
with this article.
   (b) The commission shall convene an advisory task force to assist
in understanding the technical and data requirements necessary for
implementation of the pilot program. The task force shall be convened
within 15 days of the effective date of this section. The task force
shall be composed of commission staff and representatives of
institutions interested in participating in the pilot program.
   (c) To ensure unobstructed student access to Cal Grant awards, the
alternative delivery system shall not impair the commission's
ability to keep track of all students as long as they may be eligible
for any Cal Grant awards and other student financial aid
administered by the commission. The pilot alternative delivery system
shall not impair the commission's ability to communicate with, and
make awards to, students if they are eligible for Cal Grant awards.
   (d) To ensure accountability for, and integrity of, state funds,
the alternative delivery system shall not impair the commission's
ability to do any of the following:
   (1) Pay Cal Grant awards.
   (2) Disburse funds to qualifying institutions.
   (3) Confirm Cal Grants awarded by qualifying institutions.
   (4) Require qualifying institutions to conform Cal Grants they
have awarded to the requirements of this chapter.
   (5) Require qualifying institutions to provide student and Cal
Grant award information to the commission at times deemed necessary
by the commission.
   (e) The commission may adopt any other requirements that are
necessary to ensure that the alternative delivery system provides
students with financial need with access to, and choice of, an
institution of higher education.
   69453.  The commission shall not implement the pilot alternative
delivery system established pursuant to Section 69452 until at least
30, but no more than 35, qualifying institutions have committed to
participating in the alternative delivery system and to paying the
costs associated with developing and implementing the alternative
delivery system. The commission shall not expend any resources on the
development and implementation of the pilot alternative delivery
system.
   69454.  (a) (1) A qualifying institution electing to participate
in the pilot alternative delivery system shall submit an application
to the commission acknowledging that the qualifying institution
satisfies the requirements for the pilot alternative delivery system
and will maintain compliance with those requirements as long as it
continues to award Cal Grant awards.
   (2) The commission shall review, and may approve, the application
if the commission determines that the institution complies with all
applicable requirements.
   (3) A qualifying institution may not award Cal Grants until the
commission has approved its application.
   (4) The Regents of the University of California, the Board of
Trustees of the California State University, and the Board of
Governors of the California Community Colleges shall select
qualifying campuses from within their respective segments to apply
for participation in the pilot program. For each segment, not more
than 25 percent of the total number of campuses within the respective
segment may participate in the pilot program.
   (b) In addition to complying with the regulations adopted for
participation in the pilot program, a qualifying institution electing
to participate in the pilot alternative delivery system shall do all
of the following:
   (1) Make eligibility determinations consistent with the
requirements of the Cal Grant Program and requirements adopted by the
commission.
   (2) Inform the student of his or her Cal Grant award before the
student is required to make an enrollment decision for the following
academic year. The award shall be made as part of the qualifying
institution's complete financial aid award so that the student is
aware of all the student aid that the he or she is eligible to
receive.
   (3) Provide notice to the student that he or she may be eligible
to use the Cal Grant award at another qualifying institution to which
he or she is admitted.
   (c) A qualifying institution electing to participate in the pilot
alternative delivery system shall report all of the following to the
commission in a form, and within the time, determined by the
commission to maximize student access to Cal Grant awards:
   (1) Information necessary to determine Cal Grant funding
projections for the State Budget.
   (2) Aggregate information on applicants for Cal Grant awards and
students who have been awarded Cal Grant awards, by income level,
gender, age, and ethnicity.
   (3) Aggregate information on students who have been awarded Cal
Grant awards, but have withdrawn from their qualifying institutions.
   (4) Aggregate information on students who have been awarded Cal
Grant awards but for whom awards have not been disbursed.
   (5) Information on the total amount of institutional aid available
for students at the qualifying institution, the total number of
recipients of institutional aid, the total amount of institutional
aid provided to recipients of Cal Grant awards at the qualifying
institution, and the amount of institutional aid awarded to each
student receiving a Cal Grant award.
   (6) Information on the amount of other financial aid, including,
but not necessarily limited to, fee waivers, federal loans, private
loans, and work study awarded to each student receiving a Cal Grant
award.
   (7) Any other information determined by the commission to be
necessary to fulfill its responsibilities under the Cal Grant
Program.
   (d) (1) A qualifying institution electing to participate in the
pilot alternative delivery system shall function as a one-stop shop
for student financial aid by providing assistance to all students,
parents, and high school counselors inquiring or seeking information
about Cal Grant awards and other student financial aid, including
information about the availability of, requirements for, and the
amount of, Cal Grant awards that may be available at other qualifying
institutions in all segments of postsecondary education. The
qualifying institution may also provide comparable information on
federal and other student financial aid.
   (2) A qualifying institution that does not comply with this
subdivision is not eligible to participate in the alternative
delivery system pilot program.
   69456.  All costs associated with developing, implementing,
maintaining, and improving the pilot alternative delivery system
shall be paid by the qualifying institutions that elect to
participate in the pilot alternative delivery system.
   69458.  (a) Participation in the pilot alternative delivery system
pursuant to this article is voluntary. Any local agency electing to
participate in the alternative delivery system is deemed to have
acknowledged and agreed that its participation is voluntary and does
not constitute a cost that is reimbursable under Part 7 (commencing
with Section 17500) of Division 4 of Title 2 of the Government Code.
   (b) All costs associated with a qualifying institution's election
to participate in the alternative delivery system shall be paid by
the qualifying institution and, if the qualifying institution is a
public institution, shall not require any additional state funds.
   69460.  (a) On or before January 10, 2012, the Legislative Analyst'
s Office shall report to the Legislature and the Governor on the
implementation and outcomes of the first award cycle under this pilot
program. The report shall assess the extent to which the pilot
program resulted in improved Cal Grant delivery to students, parents,
and high school and financial aid counselors; administrative
efficiencies; and sufficient state oversight. The report shall also
identify any challenges or barriers to expansion of the alternative
Cal Grant delivery system, as well as any associated information
technology challenges that may need to be addressed or changes that
may be required.
   (b) Consistent with the criteria in subdivision (a), the Student
Aid Commission may provide a report to the Legislature and the
Governor.
  SEC. 5.  The Student Aid Commission shall not conduct its duties
under the provisions of this act until the commission, at a regular
public meeting, determines that sufficient funding exists for it to
conduct its regular operations for administering the Cal Grant
Program.
  SEC. 6.  The sum of four million three hundred thousand dollars
($4,300,000) is hereby appropriated from the General Fund to the
Student Aid Commission, in augmentation of Item 7980-001-0001 of
Section 2.00 of the Budget Act of 2009, for the support of the
Student Aid Commission for the 2009-10 fiscal year.
  SEC. 7.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to efficiently administer the Cal Grant Program and save
costs to the Student Aid Commission in administering the program, it
is necessary that this act take effect immediately.