Amended in Senate June 13, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 94


Introduced by Committee on Budget (Blumenfield (Chair), Bloom, Bonilla,begin insert Campos,end insert Chesbro, Daly, Dickinson, Gordon, Jones-Sawyer, Mitchell, Mullin, Muratsuchi, Nazarian,begin delete Rendon,end deletebegin insert Skinner,end insert Stone, and Ting)

January 10, 2013


begin deleteAn act relating to the Budget Act of 2013. end deletebegin insertAn act to add Sections 69515.5, 89762, 92493, 92494, 92495, 92495.5, and 92496 to, to add Article 22 (commencing with Section 70020) to Chapter 2 of Part 42 of Division 5 of, to add Article 10 (commencing with Section 89290) and Article 10.5 (commencing with Section 89295) to Chapter 2 of Part 55 of Division 8 of, to add Article 7.5 (commencing with Section 92670) and Article 7.7 (commencing with Section 92675) to Chapter 6 of Part 57 of Division 9 of, Title 3 of, the Education Code, and to add Section 13313 to the Government Code, relating to education finance, and making an appropriation therefor, to take effect immediately, bill related to the budget.end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 94, as amended, Committee on Budget. begin deleteBudget Act of 2013. end deletebegin insertEducation finance: higher education.end insert

begin insert

(1) Existing law establishes the Student Aid Commission as the primary state agency for the administration of state-authorized student financial aid programs available to students attending all segments of postsecondary education. Under existing law, the commission, among other things, administers the Cal Grant Program, the Student Opportunity and Access Program, the Assumption Program of Loans for Education, the Graduate Assumption Program of Loans for Education, the Public Interest Attorney Loan Repayment Program, and the California State Work-Study Program. The commission also oversees the state’s participation in the Federal Family Education Loan Program.

end insert
begin insert

This bill would authorize the commission to enter into an agreement with a public agency of a state other than California, or a private entity related to an agency of another state, to assist the other agency or entity in implementing financial aid programs, including assistance with processing grants, fellowships, and loans through the use of automated information systems. The bill would create a Financial Aid Technical Assistance Fund, and would make moneys in the fund available to the commission, upon appropriation by the Legislature, for purposes of the bill. The bill would require the commission to establish fees for services provided under the bill, and would require that the fees be deposited in the fund. The bill would authorize the use of residual moneys in the fund for improvement of financial aid services for California. The bill would require the commission, beginning October 1, 2014, to submit an annual report, as prescribed, to the Department of Finance and the Joint Legislative Budget Committee detailing the total revenues collected in the fund, by service provided and applicable fee collected, and the use of the moneys in the fund.

end insert
begin insert

(2) Existing law provides for a public postsecondary education system in this state. This system consists of the University of California, the California State University, and the California Community Colleges. Existing law authorizes these institutions to require that mandatory systemwide fees and tuition, among other fees, be paid by students at these institutions.

end insert
begin insert

This bill would establish the Middle Class Scholarship Program under the administration of the Student Aid Commission. The bill would provide that, subject to an available and sufficient appropriation, commencing with the 2014-15 academic year, undergraduate students enrolled at the University of California or the California State University would receive a scholarship award that, combined with other publicly funded student financial aid, as defined, received by an eligible student, would be up to 40% of the amount charged to that student for mandatory systemwide tuition in that fiscal year if the student meets the following conditions: has an annual household income that does not exceed $150,000; satisfies specified requirements for a Cal Grant award; is a resident of this state or exempt from paying nonresident tuition; files specified financial aid forms; makes timely application or applications for publicly funded student financial aid, as defined, for which he or she is eligible; and maintains at least a 2.0 grade point average.

end insert
begin insert

The bill would provide that a student whose annual household income exceeds $100,000, but does not exceed $150,000, and who otherwise meets the program requirements, would receive a scholarship award that is reduced in accordance with prescribed calculations.

end insert
begin insert

The bill would require, in order for students enrolled in their respective segments to remain eligible to receive financial aid under the bill, that the University of California and the California State University maintain their respective institutional need-based grant program policies and maintain their funding amounts at a level that, at a minimum, is equal to the level maintained during the 2013-14 academic year.

end insert
begin insert

The bill would require the Student Aid Commission to annually determine if the amounts appropriated under the bill in each fiscal year are sufficient to cover the costs of the scholarships as projected to be awarded pursuant to the program. The bill would require, if those amounts are not sufficient for this purpose, that the scholarships be reduced proportionately by an equal percentage for all recipients of scholarships under the bill.

end insert
begin insert

The bill would establish the Middle Class Scholarship Fund, and would specify amounts to be transferred, upon the order of the Director of Finance, from the General Fund to the Middle Class Scholarship Fund for annual appropriation to the Student Aid Commission for allocation for purposes of the bill. The bill, beginning with the 2014-15 fiscal year, would require the Department of Finance to include in the Governor’s Budget proposal a fund condition statement for the Middle Class Scholarship Fund for the fiscal year of the proposed budget and the 2 immediately preceding fiscal years.

end insert
begin insert

(3) Existing law establishes the California State University, under the administration of the Trustees of the California State University, as one of the segments of public postsecondary education in this state.

end insert
begin insert

This bill would require the California State University to report biennially to the Legislature and the Department of Finance, beginning on or before October 1, 2014, and on or before October 1 of each even-numbered year through 2020, on the total costs of education at the university on a systemwide and campus-by-campus basis, as specified.

end insert
begin insert

This bill, commencing with the 2013-14 academic year, would require the California State University to report, by March 1 of each year, on specified performance measures, including various calculations of graduation rates and amounts spent per degree, for the preceding academic year.

end insert
begin insert

This bill would require the contributions of the California State University to the Public Employees’ Retirement Fund to be based on pensionable compensation and the rates set forth in the annual Budget Act and to be paid out of the total appropriation of the university in the annual Budget Act. The bill would specify that, beginning in the 2013-14 fiscal year and each fiscal year thereafter, annual adjustments to the appropriation for the pension contributions of the California State University would be based on the university’s pensionable payroll for the 2013-14 fiscal year, as identified by the Controller’s office.

end insert
begin insert

This bill would authorize the Director of Finance to defer payment of General Fund moneys, in a cumulative amount not to exceed $250,000,000 annually, appropriated to the California State University in the annual Budget Act, for payment in May or June of the same fiscal year for which the original payment would have been made.

end insert
begin insert

(4) Existing law creates the University of California, administered by the Regents of the University of California, as one of the segments of public postsecondary education in the state. The University of California operates campuses at Berkeley, Davis, Irvine, Los Angeles, Merced, Riverside, San Diego, San Francisco, Santa Barbara, and Santa Cruz.

end insert
begin insert

Existing law authorizes the University of California to issue revenue bonds, secured by a specified pledge of revenues.

end insert
begin insert

This bill would authorize the University of California to pledge its annual General Fund support appropriation, less certain amounts, to secure the payment of its general revenue bonds or commercial paper associated with the general revenue bond program. The bill would authorize the university to fund debt service for capital expenditures, as defined, from its General Fund support appropriation, as specified. The bill would provide that these provisions do not require the Legislature to make an appropriation from the General Fund to the university in any specific amount. The bill would also authorize the university to fund pay-as-you-go capital outlay projects from its General Fund support appropriation, as specified.

end insert
begin insert

This bill would require the University of California, if it is able to reduce annual debt service costs by refunding, defeasing, or retiring general obligation bonds or State Public Works Board lease revenue bonds pursuant to these provisions, to annually contribute an equal amount to reduce the existing unfunded liability of the University of California Retirement Plan.

end insert
begin insert

This bill would require the University of California to report to the Joint Legislative Budget Committee and the Department of Finance if it plans to use any of its support appropriation for capital outlay projects in each fiscal year, as specified. The bill would require the committee and the department to review the report by specified dates, and would authorize the department to approve capital outlay projects pursuant to specified procedures. The bill would also require the university to submit a progress report by April 1 of each year to the committee and the department detailing the scope and funding of each project.

end insert
begin insert

The bill would require the university to manage its general revenue bond program so that not more than 15% of its General Fund support appropriation, less a prescribed amount, is used for the total of the following: debt service for specified capital expenditures, pay-as-you-go capital outlay, and State Public Works Board rental payments.

end insert
begin insert

This bill would require the University of California to report biennially to the Legislature and the Department of Finance, beginning on or before October 1, 2014, and on or before October 1 of each even-numbered year through 2020, on the total costs of education at the university on a systemwide and campus-by-campus basis, as specified.

end insert
begin insert

This bill, commencing with the 2013-14 academic year, would require the University of California to report, by March 1 of each year, on specified performance measures, including various calculations of graduation rates and amounts spent per degree, for the preceding academic year.

end insert
begin insert

This bill would appropriate $375,000 from the 1996 Higher Education Capital Outlay Bond Fund to the University of California for the purpose of funding the equipment phase of the Science and Engineering Building at the Merced campus, as specified, during the 2013-14 fiscal year, with the appropriation available for encumbrance until June 30, 2016, subject to the enactment of a resolution by the Regents of the University of California requiring the payment of prevailing wage rates by the contractors and subcontractors working on this project, and all other capital outlay projects undertaken by the University of California that are funded using nonstate funds or are otherwise not financed with the funds appropriated for this project, during the 2013-14 fiscal year.

end insert
begin insert

This bill would require the University of California to allocate and encumber from a specified appropriation the amount necessary to pay in full all amounts that are reasonably anticipated to become due and payable during the 2013-14 fiscal year for lease revenue and general obligation bond debt service. The bill would require the Controller to transfer funds from the specified appropriation in accordance with specified schedules.

end insert
begin insert

This bill would allocate $15,000,000 from a specified appropriation in the Budget Act of 2013 to the Regents of the University of California for the School of Medicine at the University of California, Riverside, for specified purposes.

end insert
begin insert

The bill would require, on or before April 1 of each year, the University of California to provide progress reports and specified information consistent with the published mission and vision of the University of California, Riverside, School of Medicine to the relevant policy and fiscal committees of the Legislature pertaining to funding, recruitment, hiring, and outcomes for the University of California, Riverside, School of Medicine.

end insert
begin insert

The bill would declare that the absence of language in the Budget Act of 2013 specifying that the University of California and the Hastings College of the Law shall use budgeted funds for retirement costs is not an indication of legislative support for, or acceptance of, increased retirement costs being paid for by employees of the University of California and the Hastings College of the Law.

end insert
begin insert

(5) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

end insert
begin delete

This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2013.

end delete

Vote: majority. Appropriation: begin deleteno end deletebegin insertyesend insert. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: no.

The people of the State of California do enact as follows:

P6    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 69515.5 is added to the end insertbegin insertEducation Codeend insertbegin insert,
2to read:end insert

begin insert
3

begin insert69515.5.end insert  

(a) The commission may enter into an agreement
4with a public agency of a state other than California, or a private
5entity related to an agency of another state, to assist the other
6agency or entity in implementing student financial aid programs,
7including providing assistance with processing grants, fellowships,
8and loans through the use of automated information systems. The
9commission may receive payment, reimbursement, or other
P7    1resources as consideration for services provided pursuant to
2agreements entered into under this section.

3(b) The commission shall establish fees for services it provides
4pursuant to this section in order to recover, at a minimum, the full
5costs of providing those services, including all direct and indirect
6costs.

7(c) The Financial Aid Technical Assistance Fund is hereby
8created in the State Treasury, and moneys in the fund shall be
9available, upon appropriation by the Legislature to the commission,
10for the direct and indirect costs of providing assistance to agencies
11and entities of other states with implementation of Dream Act
12programs and to improve financial aid services for California.
13The commission shall deposit the proceeds of the fees established
14under this section into the fund. Only the moneys received for
15purposes of this section shall be deposited into the fund. The fund
16shall be credited with all of the investment income earned by the
17moneys deposited in the fund. Moneys in the fund are not part of
18the General Fund as defined in Section 16300 of the Government
19Code.

20(d) The commission shall use moneys deposited in the fund for
21all costs associated with providing technical assistance to agencies
22of states other than California, and related private entities,
23pursuant to this section, and moneys remaining in the fund after
24those costs are retired shall be used to improve student financial
25aid services for California. Prior to the expenditure of these
26residual funds, the commission shall submit a detailed expenditure
27plan for approval by the Department of Finance as part of the
28annual budget process.

29(e) Beginning October 1, 2014, the commission shall submit an
30annual report to the Department of Finance and the Joint
31Legislative Budget Committee detailing the total revenues collected
32in the fund, by service provided and applicable fee collected, and
33the use of the moneys in the fund.

end insert
34begin insert

begin insertSEC. 2.end insert  

end insert

begin insertArticle 22 (commencing with Section 70020) is added
35to Chapter 2 of Part 42 of Division 5 of Title 3 of the end insert
begin insertEducation
36Code
end insert
begin insert, to read:end insert

begin insert

 

P8    1Article begin insert22.end insert  Middle Class Scholarship Program
2

 

3

begin insert70020.end insert  

The Middle Class Scholarship Fund is hereby
4established in the State Treasury. Moneys in the fund shall be
5allocated, in accordance with this article, to make higher education
6more affordable.

7

begin insert70021.end insert  

The Middle Class Scholarship Program is hereby
8established under the administration of the Student Aid
9Commission. For purposes of this article, “commission” means
10the Student Aid Commission.

11

begin insert70022.end insert  

(a) (1) Subject to an available and sufficient
12appropriation, commencing with the 2014-15 academic year, an
13undergraduate student enrolled in the California State University
14or the University of California who meets the requirements of
15paragraph (2) is eligible for a scholarship award as described in
16that paragraph.

17(2) Each academic year, except as provided in paragraphs (3)
18and (4), a student shall receive a scholarship award in an amount
19that, combined with other publicly funded student financial aid
20received by an eligible student, is up to 40 percent of the amount
21charged to that student in that academic year for mandatory
22systemwide tuition, if all of the following requirements are met:

23(A) The student’s annual household income does not exceed
24one hundred fifty thousand dollars ($150,000). For purposes of
25this article, annual household income shall be calculated in a
26manner that is consistent with the requirements applicable to the
27Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program
28(Chapter 1.7 (commencing with Section 69430)) and Section 69506.

29(B) The student satisfies the eligibility requirements for a Cal
30Grant award pursuant to Section 69433.9, except that a student
31who is exempt from nonresident tuition under Section 68130.5
32shall not be required to satisfy the requirements of subdivision (a)
33of Section 69433.9.

34(C) The student is exempt from paying nonresident tuition.

35(D) The student completes and submits a Free Application for
36Federal Student Aid (FAFSA) application. If the student is not able
37to complete a FAFSA application, the student submits an
38application determined by the commission to be equivalent to the
39FAFSA application for purposes of this article.

P9    1(E) The student makes a timely application or applications for
2publicly funded student financial aid from programs for which he
3or she is eligible, other than the program established by this article.
4For purposes of this article, “publicly funded student financial
5aid” shall be defined as the federal Pell Grant Program, the Cal
6Grant Program, and institutional need-based grants.

7(F) The student maintains at least a 2.0 grade point average in
8a manner that is consistent with the requirements applicable to
9the Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program
10(Chapter 1.7 (commencing with Section 69430)).

11(3) The scholarship award under this article to a student whose
12annual household income is greater than one hundred thousand
13dollars ($100,000), and who otherwise meets the requirements of
14paragraph (2), shall be reduced by 0.6-percent increments, from
15a maximum 40 percent of mandatory systemwide tuition for an
16academic year to a minimum 10 percent of mandatory systemwide
17tuition for an academic year, per one thousand dollars ($1,000)
18of annual household income in excess of one hundred thousand
19dollars ($100,000), provided that no scholarship award shall be
20provided to a student with an annual household income of one
21hundred fifty thousand dollars ($150,000) or more. This reduction
22shall be in addition to any reduction required by subdivision (e)
23of Section 70023.

24(4) For the 2014-15, 2015-16, and 2016-17 academic years,
25the maximum amount of a student’s scholarship award shall be
2635 percent, 50 percent, and 75 percent, respectively, of the total
27 scholarship award amount that the student would otherwise be
28eligible to receive.

29(b) In order for students enrolled in their respective segments
30to remain eligible to receive a scholarship under this article, the
31University of California and the California State University shall
32maintain their respective institutional need-based grant program
33policies, and shall maintain their funding amounts at a level that,
34at a minimum, is equal to the level maintained during the 2013-14
35academic year.

36(c) The University of California and the California State
37University shall report on the implementation of this article as
38part of the report made pursuant to Section 66021.1.

39

begin insert70023.end insert  

(a) For each academic year, the commission shall
40determine an amount sufficient, when combined with Cal Grants,
P10   1Pell Grants, and institutional need-based grants received by
2eligible students from other sources, to provide scholarships to
3eligible students in the amounts described in paragraphs (2) and
4(3) of subdivision (a) of Section 70022. The University of California
5and the California State University shall provide the commission
6with any financial aid data that are necessary for the determination
7of these amounts.

8(b) The commission shall annually determine if the amounts
9appropriated under this section in each fiscal year are sufficient
10to cover the costs of the scholarships as projected to be awarded
11pursuant to the program. If those amounts are not sufficient for
12this purpose, the scholarships shall be reduced proportionately
13by an equal percentage for all recipients of scholarships under
14this article.

15(c) The commission may adopt regulations necessary to carry
16out the purposes of this article under subdivision (b) as emergency
17regulations in accordance with Chapter 3.5 (commencing with
18Section 11340) of Part 1 of Division 3 of Title 2 of the Government
19Code. For purposes of the Administrative Procedure Act, including
20Section 11349.6 of the Government Code, the adoption of those
21regulations shall be deemed to be an emergency and necessary
22for the immediate preservation of the public peace, health and
23safety, or general welfare, notwithstanding subdivision (e) of
24Section 11346.1 of the Government Code. Notwithstanding
25subdivision (e) of Section 11346.1 of the Government Code, any
26regulation adopted pursuant to this section shall not remain in
27effect more than 180 days unless the commission complies with
28all provisions of Chapter 3.5 (commencing with Section 11340)
29of Part 1 of Division 3 of Title 2 of the Government Code, as
30required by subdivision (e) of Section 11346.1 of the Government
31Code.

32(d) The unencumbered balance, as of June 30 of each fiscal
33year, of the amount appropriated from the Middle Class
34Scholarship Fund pursuant to paragraph (1) of subdivision (e)
35shall revert to the General Fund.

36(e) (1) Upon order of the Director of Finance, the following
37amounts shall be transferred from the General Fund to the Middle
38Class Scholarship Fund, and are hereby appropriated to the
39commission for allocation pursuant to this article:

P11   1(A) For the 2014-15 fiscal year, one hundred seven million
2dollars ($107,000,000).

3(B) For the 2015-16 fiscal year, one hundred fifty-two million
4dollars ($152,000,000).

5(C) For the 2016-17 fiscal year, two hundred twenty-eight
6million dollars ($228,000,000).

7(D) For the 2017-18 fiscal year and for each fiscal year
8thereafter, three hundred five million dollars ($305,000,000).

9(2) An annual appropriation to the commission is hereby
10established in the amounts and for the fiscal years described in
11paragraph (1) to carry out the purposes of this section and Section
1270022.

13(3) The funds transferred and appropriated pursuant to
14paragraph (1) shall only be available for encumbrance in the fiscal
15year in which they are transferred, and the General Fund shall
16have no liability or any obligation beyond the transfers explicitly
17authorized in paragraph (1) unless a subsequent transfer or
18allocation is required pursuant to statute.

19(4)  In any fiscal year, additional appropriations may be enacted
20pursuant to statute to carry out the purposes of this article.

21(5) (A) Beginning with the Governor’s Budget proposal for the
222014-15 fiscal year, and in the Governor’s Budget for each fiscal
23year thereafter, the Department of Finance shall include a fund
24condition statement for the Middle Class Scholarship Fund for the
25fiscal year of the proposed budget and the two immediately
26preceding fiscal years prepared in accordance with existing law.

27(B) Upon order of the Director of Finance and commencing
28with the 2013-14 fiscal year, if the May Revision projects a budget
29deficit for the next fiscal year, the amount specified in paragraph
30(1) for the fiscal year for which the budget deficit is projected may
31be reduced by up to 33 percent. Upon order of the Director of
32Finance, beginning with the 2016-17 fiscal year, and each year
33thereafter, if the May Revision projects a deficit for the next fiscal
34year, the amount specified in paragraph (1) may be reduced to an
35amount greater than or equal to two hundred million dollars
36($200,000,000).

37(f) Subject to an appropriation in the annual Budget Act for its
38purposes, the commission may begin implementation of, and
39establish outreach services relating to, this article.

end insert
P12   1begin insert

begin insertSEC. 3.end insert  

end insert

begin insertArticle 10 (commencing with Section 89290) is added
2to Chapter 2 of Part 55 of Division 8 of Title 3 of the end insert
begin insertEducation
3Code
end insert
begin insert, to read:end insert

begin insert

4 

5Article begin insert10.end insert  Expenditures for Undergraduate and Graduate
6Instruction and Research Activities
7

 

8

begin insert89290.end insert  

(a) The California State University shall report
9biennially to the Legislature and the Department of Finance, on
10or before October 1, 2014, and on or before October 1 of each
11even-numbered year thereafter, on the total costs of education at
12the California State University.

13(b) The report prepared under this section shall identify the
14costs of undergraduate education, graduate academic education,
15graduate professional education, and research activities. All four
16categories listed in this subdivision shall be reported in total and
17disaggregated separately by health sciences disciplines, disciplines
18included in paragraph (10) of subdivision (b) of Section 89295,
19and all other disciplines. The university shall also separately report
20on the cost of education for postbaccaulaureate teacher education
21programs. For purposes of this report, research for which a student
22earns credit toward his or her degree program shall be identified
23as undergraduate education or graduate education, as appropriate.

24(c) The costs shall also be reported by fund source, including
25all of the following:

26(1) State General Fund.

27(2) Systemwide tuition and fees.

28(3) Nonresident tuition and fees and other student fees.

29(d) For any report submitted under this section before January
301, 2017, the costs shall, at a minimum, be reported on a systemwide
31basis. For any report submitted under this section on or after
32January 1, 2017, the costs shall be reported on both a systemwide
33and campus-by-campus basis.

34(e) A report to be submitted pursuant to this section shall be
35submitted in compliance with Section 9795 of the Government
36Code.

37(f) Pursuant to Section 10231.5 of the Government Code, the
38requirement for submitting a report under this section shall be
39inoperative on January 1, 2021, pursuant to Section 10231.5 of
40the Government Code.

end insert
P13   1begin insert

begin insertSEC. 4.end insert  

end insert

begin insertArticle 10.5 (commencing with Section 89295) is added
2to Chapter 2 of Part 55 of Division 8 of Title 3 of the end insert
begin insertEducation
3Code
end insert
begin insert, to read:end insert

begin insert

4 

5Article begin insert10.5.end insert  Reporting of Performance Measures
6

 

7

begin insert89295.end insert  

(a) For purposes of this section, the following terms
8are defined as follows:

9(1) The “four-year graduation rate” means the percentage of
10a cohort that entered the university as freshmen that successfully
11graduated within four years.

12(2) The “six-year graduation rate” means the percentage of a
13cohort that entered the university as freshmen that successfully
14graduated within six years.

15(3) The “two-year transfer graduation rate” means the
16percentage of a cohort that entered the university as junior-level
17transfer students from the California Community Colleges that
18successfully graduated within two years.

19(4) The “three-year transfer graduation rate” means the
20percentage of a cohort that entered the university as junior-level
21transfer students from the California Community Colleges that
22successfully graduated within three years.

23(5) “Low-income students” means students who receive a Pell
24Grant at any time during their matriculation at the institution.

25(b) Commencing with the 2013-14 academic year, the California
26State University shall report, by March 1 of each year, on the
27following performance measures for the preceding academic year,
28to inform budget and policy decisions and promote the effective
29and efficient use of available resources:

30(1) The number of transfer students enrolled annually from the
31California Community Colleges, and the percentage of transfer
32students as a proportion of the total undergraduate student
33population.

34(2) The number of low-income students enrolled annually and
35the percentage of low-income students as a proportion of the total
36student population.

37(3) The systemwide four-year and six-year graduation rates for
38each cohort of students and, separately, for low-income students.

P14   1(4) The systemwide two-year and three-year transfer graduation
2rates for each cohort of students and, separately, for each cohort
3of low-income students.

4(5) The number of degree completions annually, in total and
5for the following categories:

6(A) Freshman entrants.

7(B) Transfer students.

8(C) Graduate students.

9(D) Low-income students.

10(6) The percentage of first-year undergraduates who have
11earned sufficient course credits by the end of their first year of
12enrollment to indicate they will complete a degree in four years.

13(7) For all students, the total amount of funds received from all
14sources identified in subdivision (c) of Section 89290 for the year,
15divided by the number of degrees awarded that same year.

16(8) For undergraduate students, the total amount of funds
17received from all sources identified in subdivision (c) of Section
1889290 for the year expended for undergraduate education, divided
19by the number of undergraduate degrees awarded that same year.

20(9) The average number of course credits accumulated by
21students at the time they complete their degrees, disaggregated by
22freshman entrants and transfers.

23(10) (A) The number of degree completions in science,
24technology, engineering, and mathematics (STEM) fields,
25disaggregated by undergraduate students, graduate students, and
26low-income students.

27(B) For purposes of subparagraph (A), “STEM fields” include,
28but are not necessarily limited to, all of the following: computer
29and information sciences, engineering and engineering
30technologies, biological and biomedical sciences, mathematics
31and statistics, physical sciences, and science technologies.

end insert
32begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 89762 is added to the end insertbegin insertEducation Codeend insertbegin insert, to read:end insert

begin insert
33

begin insert89762.end insert  

(a) The contributions of the California State University
34to the Public Employees’ Retirement Fund, as provided by Section
3520822 of the Government Code, shall be based on pensionable
36compensation and the rates set forth in the Budget Act, and shall
37be paid out of the California State University total appropriation
38in the annual Budget Act.

39(b) Beginning in the 2013-14 fiscal year and each fiscal year
40thereafter, annual adjustments to the budget allocation for
P15   1California State University pension contributions shall be based
2on the university’s actual 2013-14 fiscal year pensionable payroll,
3as identified by the Controller’s office, by funding source and state
4member categories, and the incremental change in the rates set
5 forth in the annual Budget Act.

6(c) Budget adjustments under this section shall not be made for
7subsequent changes in payroll.

8(d) Pension funding for the university shall be identified
9annually in the Budget Act.

end insert
10begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 92493 is added to the end insertbegin insertEducation Codeend insertbegin insert, to read:end insert

begin insert
11

begin insert92493.end insert  

(a) The University of California may pledge, along
12with its other revenues, its annual General Fund support
13appropriation less the amount of that appropriation that is required
14to fund general obligation bond payments and the State Public
15Works Board rental payments, to secure the payment of any of the
16university’s general revenue bonds or commercial paper associated
17with the general revenue bond program. To the extent the university
18pledges any part of its support appropriation as a source of
19revenue securing any obligation, it shall provide that this
20commitment of revenue is subject to annual appropriation by the
21Legislature. The university may fund debt service for capital
22expenditures defined in subdivision (b) from its General Fund
23support appropriation pursuant to Sections 92495 and 92495.5.
24The state hereby covenants with the holders of the university’s
25obligations secured by the pledge of the university permitted by
26this section that, so long as any of the obligations referred to in
27this subdivision remain outstanding, the state will not impair or
28restrict the ability of the university to pledge any support
29appropriation or support appropriations that may be enacted for
30the university. The university may include this covenant of the state
31in the agreements or other documents underlying the university’s
32obligations to this effect.

33(b) For purposes of this section, “capital expenditures” shall
34mean (1) the costs to design, construct, or equip academic facilities
35to address seismic and life safety needs, enrollment growth, or
36modernization of out-of-date facilities, and renewal or expansion
37of infrastructure to serve academic programs, or (2) the debt
38service amount associated with refunding, defeasing, or retiring
39State Public Works Board lease revenue bonds.

P16   1(c) Nothing in this section shall require the Legislature to make
2an appropriation from the General Fund in any specific amount
3to support the University of California.

4(d) The ability to utilize its support appropriation as stated in
5this section shall not be used as a justification for future increases
6in student tuition, additional employee layoffs, or reductions in
7employee compensation at the University of California.

end insert
8begin insert

begin insertSEC. 7.end insert  

end insert

begin insertSection 92494 is added to the end insertbegin insertEducation Codeend insertbegin insert, to read:end insert

begin insert
9

begin insert92494.end insert  

(a) The University of California may fund
10pay-as-you-go capital outlay projects from its General Fund
11support appropriation pursuant to Sections 92495 and 92495.5.

12(b) For purposes of this section, “capital outlay project” shall
13mean the costs to design, construct, or equip academic facilities
14to address seismic and life safety needs, enrollment growth, or
15modernization of out-of-date facilities, and renewal or expansion
16of infrastructure to serve academic programs.

end insert
17begin insert

begin insertSEC. 8.end insert  

end insert

begin insertSection 92495 is added to the end insertbegin insertEducation Codeend insertbegin insert, to read:end insert

begin insert
18

begin insert92495.end insert  

(a) Commencing with the 2013-14 fiscal year and for
19each fiscal year thereafter, if the University of California plans to
20use any of its support appropriation in the annual budget for the
21subsequent fiscal year for capital expenditures pursuant to Section
2292493, as defined in paragraph (1) of subdivision (b) of that
23section, or for capital outlay projects pursuant to Section 92494,
24it shall simultaneously submit, on or before September 1 nine
25months before the commencement of that fiscal year, a report to
26the Joint Legislative Budget Committee and the Department of
27Finance. This report shall detail the scope of each capital outlay
28project or expenditure and how it will be funded, and it shall
29provide the same level of detail as a capital outlay budget change
30proposal. The Department of Finance shall review the report and
31submit a list of preliminarily approved projects to the Joint
32Legislative Budget Committee by February 1. The Department of
33Finance shall submit a final list of approved projects to the
34University of California no earlier than April 1, three months
35before the commencement of the fiscal year of the planned
36expenditures. The University of California shall not proceed with
37any capital expenditures pursuant to Section 92493, as defined in
38paragraph (1) of subdivision (b) of that section, or capital outlay
39projects pursuant to Section 92494, prior to receiving approval
40from the Department of Finance pursuant to this subdivision.

P17   1(b) For the 2013-14 fiscal year only, if the University of
2California plans to use any of its support appropriation in the
3annual budget for the 2013-14 fiscal year for capital expenditures
4pursuant to Section 92493, as defined in paragraph (1) of
5subdivision (b) of that section, or for capital outlay projects
6 pursuant to Section 92494, it shall simultaneously submit, on or
7before August 1 of that fiscal year, a report to the Joint Legislative
8Budget Committee and the Department of Finance. This report
9shall detail the scope of each capital outlay project or expenditure
10and how it will be funded, and it shall provide the same level of
11detail as a capital outlay budget change proposal. The Department
12of Finance shall review the report and submit a list of preliminarily
13approved projects to the Joint Legislative Budget Committee by
14November 1 of that fiscal year. The Department of Finance shall
15submit a final list of approved projects to the University of
16California no earlier than December 1 of that fiscal year. The
17University of California shall not proceed with any capital
18expenditures pursuant to Section 92493, as defined in paragraph
19(1) of subdivision (b) of that section, or capital outlay projects
20pursuant to Section 92494, prior to receiving approval from the
21Department of Finance pursuant to this subdivision.

22(c) Notwithstanding subdivision (b), the University of California
23may use the authority provided in Section 92493 for the Merced
24Classroom and Academic Office Building, as specified in Provision
253 of Item 6440-001-0001 of Section 2.00 of the Budget Act of 2013.

26(d) Notwithstanding Section 10231.5 of the Government Code,
27commencing with the 2014-15 fiscal year, on or before February
281 of each fiscal year, the University of California shall
29simultaneously submit a progress report to the Joint Legislative
30Budget Committee and the Department of Finance detailing the
31scope, funding, and current status of each capital expenditure
32undertaken pursuant to Section 92493, as defined in paragraph
33(1) of subdivision (b) of that section, and for each capital outlay
34project undertaken pursuant to Section 92494.

end insert
35begin insert

begin insertSEC. 9.end insert  

end insert

begin insertSection 92495.5 is added to the end insertbegin insertEducation Codeend insertbegin insert, to
36read:end insert

begin insert
37

begin insert92495.5.end insert  

The university shall manage its general revenue bond
38program in a manner so that not more than 15 percent of its
39General Fund support appropriation, less the amount of that
40appropriation that is required to fund general obligation bond
P18   1payments and State Public Works Board rental payments, is used
2for the total of all of the following:

3(a) Debt service for capital expenditures pursuant to Section
492493.

5(b) Pay-as-you-go capital outlay pursuant to Section 92494.

6(c) State Public Works Board rental payments.

end insert
7begin insert

begin insertSEC. 10.end insert  

end insert

begin insertSection 92496 is added to the end insertbegin insertEducation Codeend insertbegin insert, to
8read:end insert

begin insert
9

begin insert92496.end insert  

If the university is able to reduce annual debt service
10costs by refunding, defeasing, or retiring general obligation bonds
11or State Public Works Board lease revenue bonds, as described
12in Section 92493, the university shall annually contribute an equal
13amount to reduce the existing unfunded liability of the University
14of California Retirement Plan.

end insert
15begin insert

begin insertSEC. 11.end insert  

end insert

begin insertArticle 7.5 (commencing with Section 92670) is added
16to Chapter 6 of Part 57 of Division 9 of Title 3 of the end insert
begin insertEducation
17Code
end insert
begin insert, to read:end insert

begin insert

18 

19Article begin insert7.5.end insert  Expenditures for Undergraduate and Graduate
20Instruction and Research Activities
21

 

22

begin insert92670.end insert  

(a) The University of California shall report biennially
23to the Legislature and the Department of Finance, on or before
24October 1, 2014, and on or before October 1 of each
25even-numbered year thereafter, on the total costs of education at
26the University of California.

27(b) The report shall identify the costs of undergraduate
28education, graduate academic education, graduate professional
29education, and research activities. All four categories listed in this
30subdivision shall be reported in total and disaggregated separately
31by health sciences disciplines, disciplines included in paragraph
32(10) of subdivision (b) of Section 92675, and all other disciplines.
33For purposes of this report, research for which a student earns
34credit toward his or her degree program shall be identified as
35undergraduate education or graduate education.

36(c) The costs shall also be reported by fund source, including
37all of the following:

38(1) State General Fund.

39(2) Systemwide tuition and fees.

40(3) Nonresident tuition and fees and other student fees.

P19   1(4) University of California General Funds, including interest
2on General Fund balances and the portion of indirect cost recovery
3and patent royalty income used for core educational purposes.

4(d) For any report submitted under this section before January
51, 2017, the costs shall, at a minimum, be reported on a systemwide
6basis. For any report submitted under this section on or after
7January 1, 2017, the costs shall be reported on both a systemwide
8and campus-by-campus basis.

9(e) A report to be submitted pursuant to this section shall be
10submitted in compliance with Section 9795 of the Government
11Code.

12(f) Pursuant to Section 10231.5 of the Government Code, the
13requirement for submitting a report under this section shall be
14inoperative on January 1, 2021, pursuant to Section 10231.5 of
15the Government Code.

end insert
16begin insert

begin insertSEC. 12.end insert  

end insert

begin insertArticle 7.7 (commencing with Section 92675) is added
17to Chapter 6 of Part 57 of Division 9 of Title 3 of the end insert
begin insertEducation
18Code
end insert
begin insert, to read:end insert

begin insert

19 

20Article begin insert7.7.end insert  Reporting of Performance Measures
21

 

22

begin insert92675.end insert  

(a) For purposes of this section, the following terms
23are defined as follows:

24(1) The “four-year graduation rate” means the percentage of
25a cohort that entered the university as freshmen that successfully
26graduated within four years.

27(2) The “two-year transfer graduation rate” means the
28percentage of a cohort that entered the university as junior-level
29transfer students from the California Community Colleges that
30successfully graduated within two years.

31(3) “Low-income students” means students who receive a Pell
32Grant at any time during their matriculation at the institution.

33(b) Commencing with the 2013-14 academic year, the University
34of California shall report, by March 1 of each year, on the
35following performance measures for the preceding academic year,
36to inform budget and policy decisions and promote the effective
37and efficient use of available resources:

38(1) The number of transfer students enrolled annually from the
39California Community Colleges, and the percentage of transfer
P20   1students as a proportion of the total undergraduate student
2population.

3(2) The number of low-income students enrolled annually and
4the percentage of low-income students as a proportion of the total
5student population.

6(3) The systemwide four-year graduation rates for each cohort
7of students and, separately, for each cohort of low-income students.

8(4) The systemwide two-year transfer graduation rates for each
9cohort of students and, separately, for each cohort of low-income
10students.

11(5) The number of degree completions annually, in total and
12for the following categories:

13(A) Freshman entrants.

14(B) Transfer students.

15(C) Graduate students.

16(D) Low-income students.

17(6) The percentage of first-year undergraduates who have
18earned sufficient course credits by the end of their first year of
19enrollment to indicate they will complete a degree in four years.

20(7) For all students, the total amount of funds received from all
21sources identified in subdivision (c) of Section 92670 for the year,
22divided by the number of degrees awarded that same year.

23(8) For undergraduate students, the total amount of funds
24received from the sources identified in subdivision (c) of Section
2592670 for the year expended for undergraduate education, divided
26by the number of undergraduate degrees awarded that same year.

27(9) The average number of course credits accumulated by
28students at the time they complete their degrees, disaggregated by
29freshman entrants and transfers.

30(10) (A) The number of degree completions in science,
31technology, engineering, and mathematics (STEM) fields,
32disaggregated by undergraduate students, graduate students, and
33low-income students.

34(B) For purposes of subparagraph (A), “STEM fields” include,
35but are not necessarily limited to, all of the following: computer
36and information sciences, engineering and engineering
37technologies, biological and biomedical sciences, mathematics
38and statistics, physical sciences, and science technologies.

end insert
39begin insert

begin insertSEC. 13.end insert  

end insert

begin insertSection 13313 is added to the end insertbegin insertGovernment Codeend insertbegin insert, to
40read:end insert

begin insert
P21   1

begin insert13313.end insert  

(a) Notwithstanding any other law, in order to achieve
2effective cash management of state resources, the Director of
3Finance may defer payment of General Fund moneys, in a
4cumulative amount not to exceed two hundred fifty million dollars
5($250,000,000) annually, appropriated to the California State
6University in the annual Budget Act.

7(b) The payment of the amount deferred shall be in May or June,
8as established by the Director of Finance, of the same fiscal year
9that the original payment would have been made.

end insert
10begin insert

begin insertSEC. 14.end insert  

end insert
begin insert

(a) Three hundred seventy-five thousand dollars
11($375,000) is hereby appropriated from the 1996 Higher Education
12Capital Outlay Bond Fund to the University of California for the
13purpose of funding the Merced Campus (1) 99.11.050-Science and
14Engineering Building 2--Equipment phase during the 2013-14
15fiscal year, with this appropriation to be available for encumbrance
16until June 30, 2016, if the requirements of subdivision (b) are met.

end insert
begin insert

17(b) The funds appropriated under subdivision (a) shall only be
18available for expenditure if the Regents of University of California
19act, by resolution, to require the payment of prevailing wage rates
20by the contractors and subcontractors working on this project,
21and all other capital outlay projects undertaken by the University
22of California that are funded using nonstate funds or are otherwise
23not financed with the funds appropriated for this project, during
24the 2013-14 fiscal year.

end insert
25begin insert

begin insertSEC. 15.end insert  

end insert
begin insert

(a) The University of California shall allocate and
26encumber from the appropriation made pursuant to Item
276440-001-0001 of Section 2.00 of the Budget Act of 2013 the
28amount necessary to pay in full all amounts that are reasonably
29anticipated to become due and payable during the fiscal year for
30lease revenue and general obligation bond debt service.

end insert
begin insert

31(b) Notwithstanding Section 16326 of the Government Code,
32the Controller shall transfer funds appropriated pursuant to Item
336440-001-0001 of Section 2.00 of the Budget Act of 2013 in
34 accordance with schedules to be submitted as follows:

end insert
begin insert

35(1) The State Public Works Board shall submit a schedule or
36schedules for rental, fees, and insurance associated with its lease
37revenue bonds issued on behalf of the University of California.
38Notwithstanding the payment dates in any related facility lease or
39indenture, a schedule may provide for an earlier transfer of funds
P22   1to ensure debt requirements are met and base rental payments are
2paid in full when due.

end insert
begin insert

3(2) (A) The Department of Finance shall submit a schedule or
4schedules to reimburse the General Fund in an amount equal to
5the required general obligation bond debt service costs attributed
6to the University of California. Notwithstanding the payment dates
7in any related debt service schedule for a bond issuance, a schedule
8submitted by the Department of Finance may provide for an earlier
9transfer of funds to ensure debt requirements are paid in full when
10due.

end insert
begin insert

11(B) The Department of Finance shall submit a revised schedule
12of reimbursements, as needed, to authorize the return of any funds
13to Item 6440-001-0001 of Section 2.00 of the Budget Act of 2013
14that were previously transferred pursuant to this act and that are
15not needed to fully reimburse debt service costs in the 2013-14
16fiscal year. Any funds returned pursuant to this subparagraph may
17be carried over and expended in the 2014-15 fiscal year.

end insert
18begin insert

begin insertSEC. 16.end insert  

end insert
begin insert

(a) Of the moneys appropriated in Item
196440-001-0001 of Section 2.00 of the Budget Act of 2013, the sum
20of fifteen million dollars ($15,000,000) is allocated to the Regents
21of the University of California for the School of Medicine at the
22University of California, Riverside.

end insert
begin insert

23(b) Funds provided pursuant to subdivision (a) shall be available
24for planning and startup costs associated with academic programs
25to be offered by the School of Medicine at the University of
26California, Riverside, including all of the following:

end insert
begin insert

27(1) Academic planning activities, support of academic program
28offerings, and faculty recruitment.

end insert
begin insert

29(2) The acquisition of instructional materials and equipment.

end insert
begin insert

30(3) Ongoing operating support for faculty, staff, and other
31annual operating expenses for the School of Medicine at the
32University of California, Riverside.

end insert
begin insert

33(c) The additional funds provided by this section for the School
34of Medicine at the University of California, Riverside, shall only
35be used for the purposes specified in subdivision (b), and shall not
36be redirected or otherwise expended, nor shall these funds be used
37to supplant other funding of that school.

end insert
begin insert

38(d) On or before April 1 of each year, the University of
39California shall provide progress reports to the relevant policy
40and fiscal committees of the Legislature pertaining to funding,
P23   1recruitment, hiring, and outcomes for the School of Medicine at
2the University of California, Riverside. Specifically, the report
3shall include, but not be limited to, information consistent with
4the published mission and vision for the School of Medicine at the
5University of California, Riverside, in all of the following areas:

end insert
begin insert

6(1) The number of students who have applied, been admitted,
7or been enrolled, broken out by race, ethnicity, and gender.

end insert
begin insert

8(2) The number of full-time faculty, part-time faculty, and
9administration, broken out by race, ethnicity, and gender.

end insert
begin insert

10(3) Funding and progress of ongoing medical education pipeline
11programs, including the UCR/UCLA Thomas Haider Program in
12Biomedical Sciences.

end insert
begin insert

13(4) Operating and capital budgets, including detail by funding
14source. The operating budget shall include a breakdown of
15research activities, instruction costs, administration, and executive
16management.

end insert
begin insert

17(5) Efforts to meet the health care delivery needs of California
18and the inland empire region of the state, including, but not limited
19to, the percentage of clinical placements, graduate medical
20education slots, and medical school graduates in primary care
21specialties who are providing service within California’s medically
22underserved areas and populations.

end insert
begin insert

23(6) A description of faculty research activities, including
24information regarding the diversity of doctoral candidates, and
25identifying activities that focus on high priority research needs
26with respect to addressing California’s medically underserved
27areas and populations.

end insert
28begin insert

begin insertSEC. 17.end insert  

end insert
begin insert

The absence of language in the Budget Act of 2013
29specifying that the University of California and the Hastings
30College of the Law shall use budgeted funds for retirement costs
31is not an indication of legislative support for, or acceptance of,
32increased retirement costs being paid for by employees of the
33University of California and the Hastings College of the Law.

end insert
34begin insert

begin insertSEC. 18.end insert  

end insert
begin insert

This act is a bill providing for appropriations related
35to the Budget Bill within the meaning of subdivision (e) of Section
3612 of Article IV of the California Constitution, has been identified
37as related to the budget in the Budget Bill, and shall take effect
38immediately.

end insert
begin delete
39

SECTION 1.  

It is the intent of the Legislature to enact statutory
40changes relating to the Budget Act of 2013.
P24   1

end delete

CORRECTIONS:

Text--Page 23.




O

Corrected 6-15-13—See last page.     98