Amended in Assembly April 12, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2787


Introduced by Assembly Member Chávez

February 19, 2016


An act to amendbegin delete Section 70022end deletebegin insert Sections 70022 and end insertbegin insert70023end insert of the Education Code, relating to student financialbegin delete aid.end deletebegin insert aid, and making an appropriation thereforend insertbegin insert.end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 2787, as amended, Chávez. Student financial aid: Middle Class Scholarship Program: private nonprofit postsecondary educational institutions.

Under existing law, the Middle Class Scholarship Program provides that, subject to an available and sufficient appropriation, commencing with the 2014-15 academic year, an undergraduate student enrolled at the University of California or the California State University, and meeting certain requirements, is eligible for a scholarship award that, combined with other federal, state, and institutionally administered grants and fee waivers, totals up to 40% of the systemwide tuition and fees. Under existing law, to receive an award under the Middle Class Scholarship Program, a student is required to have an annual household income that does not exceed $150,000 as adjusted to reflect changes in the cost of living, satisfy specified requirements for a Cal Grant award, be a California resident or exempt from paying nonresident tuition, file specified financial aid forms, timely apply for publicly funded student financial aid for which he or she is eligible, maintain at least a 2.0 grade point average, be pursuing his or her first undergraduate baccalaureate degree or be enrolled in a specified professional teacher preparation program, and be enrolled at least part time.

Existing law transfers $159,000,000 from the General Fund to the Middle Class Scholarship Fund, and appropriates that sum to the Student Aid Commission for purposes of the scholarship program for the 2017-18begin delete fiscal year.end deletebegin insert year, and each fiscal year thereafter.end insert

Existing law requires the University of California and the California State University, in order for students of their respective segments to remain eligible to receive a scholarship award under the Middle Class Scholarship Program, to not supplant their respective institutional need-based grants with funds provided for scholarships under this program, and to maintain their funding amounts at a level that, at a minimum, is equal to the level maintained for undergraduate students during the 2013-14 academic year.

This bill would extend the Middle Class Scholarship Program to undergraduate students who meet the requirements of the program and are enrolled inbegin insert participatingend insert private nonprofit postsecondary educational institutions,begin insert as defined,end insert commencing with the 2017-18 academic year, asbegin delete specified, but the bill would not affect the statutory appropriation for the program for the 2017-18 fiscal year that is referenced above.end deletebegin insert specified. By expanding the appropriation described above, the bill would make an appropriation.end insert The bill would subject participating private nonprofit postsecondary educational institutions to the requirement to maintain its scholarship funding levels, as referenced above.

Vote: begin deletemajority end deletebegin insert23end insert. Appropriation: begin deleteno end deletebegin insertyesend insert. Fiscal committee: yes. State-mandated local program: no.

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

P2    1

SECTION 1.  

Section 70022 of the Education Code is amended
2to read:

3

70022.  

(a) (1) Subject to an available and sufficient
4appropriation, commencing with the 2014-15 academic year, an
5undergraduate student enrolled in the California State University,
6the University of California, or, commencing with the 2017-18
7academic year, a private nonprofit postsecondary educational
8institution who meets the requirements of paragraph (2) is eligible
9for a scholarship award as described in that paragraph.

P3    1(2) Each academic year, except as provided in paragraphs (3)
2and (4), an eligible student shall receive a scholarship award in an
3amount that, combined with other federal, state, or institutionally
4administered student grants or fee waivers received by an eligible
5student, is up to 40 percent of the amount charged to that student
6in that academic year for mandatory systemwide tuition and fees
7of a student of the California State University or the University of
8California,begin delete or the tuition and mandatory fees ofend deletebegin insert or, with respect
9toend insert
a student of a private nonprofit postsecondary educational
10institution,begin insert a scholarship award calculated in accordance with
11paragraph (2) of subdivision (a) of Section 70023,end insert
if all of the
12following requirements are met, to the satisfaction of the
13commission, each academic year:

14(A) The student’s annual household income does not exceed
15one hundred fifty thousand dollars ($150,000). For awards
16distributed for the 2016-17 academic year and subsequent
17academic years, the commission shall annually adjust the maximum
18income level set under this subparagraph in accordance with the
19percentage changes in the cost of living within the meaning of
20paragraph (1) of subdivision (e) of Section 8 of Article XIII  B of
21the California Constitution. For purposes of this article, annual
22household income shall be calculated in a manner that is consistent
23with the requirements applicable to the
24Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program
25(Chapter 1.7 (commencing with Section 69430)) and Section
2669506.

27(B) Beginning with awards distributed in the 2015-16 academic
28year, the student’s household asset level shall not exceed one
29hundred fifty thousand dollars ($150,000). For awards distributed
30in the 2016-17 academic year and subsequent academic years, the
31commission shall annually adjust the maximum household asset
32level set under this subparagraph in accordance with the percentage
33changes in the cost of living within the meaning of paragraph (1)
34of subdivision (e) of Section 8 of Article XIII B of the California
35Constitution. For purposes of this article, student’s household asset
36level shall be calculated in a manner that is consistent with the
37requirements applicable to the
38Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program
39(Chapter 1.7 (commencing with Section 69430)) and Section
4069506.

P4    1(C) The student satisfies the eligibility requirements for a Cal
2Grant award pursuant to Section 69433.9, except that a student
3who is exempt from nonresident tuition under Section 68130.5
4shall not be required to satisfy the requirements of subdivision (a)
5of Section 69433.9.

6(D) The student is exempt from paying nonresident tuition, or
7would be exempt if the student attended a public institution.

8(E) The student completes and submits a Free Application for
9Federal Student Aid (FAFSA) application. The FAFSA must be
10submitted or postmarked by no later than March 2. If the student
11is not able to complete a FAFSA application, the student may
12satisfy this subparagraph by submitting an application determined
13by the commission to be equivalent to the FAFSA application for
14purposes of this article by March 2.

15(F) The student makes a timely application or applications for
16all other federal, state, or institutionally administered grants or fee
17waivers for which the student is eligible.

18(G) The student maintains satisfactory academic progress in a
19manner that is consistent with the requirements applicable to the
20Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program
21pursuant to subdivision (m) of Section 69432.7.

22(H) The student is pursuing his or her first undergraduate
23baccalaureate degree or has completed a baccalaureate degree and
24has been admitted to, and is enrolled in, a program of professional
25teacher preparation at an institution approved by the California
26Commission on Teacher Credentialing.

27(I) The student is enrolled at least part time.

28(3) (A) The percentage specified in paragraph (2) shall be
29reduced by 0.6-percent increments per one thousand dollars
30($1,000) of annual household income in excess of one hundred
31thousand dollars ($100,000), to a minimum 10 percent ofbegin delete theend deletebegin insert end insert
32begin insertmandatory systemwideend insert tuition and fees for an academic year,
33provided that no scholarship award shall be provided to a student
34with an annual household income exceeding one hundred fifty
35thousand dollars ($150,000). Beginning with award calculations
36for the 2016-17 academic year, and for subsequent academic years,
37the commission shall annually adjust the income levels specified
38in this subparagraph by the percentage change in the cost of living
39within the meaning of paragraph (1) of subdivision (e) of Section
408 of Article XIII  B of the California Constitution and shall adjust
P5    1the incremental reduction accordingly to ensure that a minimum
2of 10 percent ofbegin delete theend deletebegin insert mandatory systemwideend insert tuition and fees for an
3academic year are awarded. This reduction shall be in addition to
4any reduction required by Section 70023.

5(B) Notwithstanding subparagraph (A), for any student who
6qualifies for a scholarship award of at least one dollar ($1), the
7minimum annual scholarship amount for full-time enrollment is
8ninety dollars ($90).

9(4) For the 2014-15, 2015-16, and 2016-17 academic years,
10the maximum amount of a student’s scholarship award shall be 35
11percent, 50 percent, and 75 percent, respectively, of the total
12scholarship award amount that the student would otherwise be
13eligible to receive.

14(b) In order for students enrolled in their respective segments
15to remain eligible to receive a scholarship award under this article,
16the University of California, the California State University, and
17a participating private nonprofit postsecondary educational
18institution shall not supplant their respective institutional
19need-based grants with the funds provided for scholarships under
20this article, and shall maintain their funding amounts at a level
21that, at a minimum, is equal to the level maintained for
22undergraduate students during the 2013-14 academic year.

23(c) The University of California and the California State
24University shall report on the implementation of this article as part
25of the report made pursuant to Section 66021.1.

26(d) A Middle Class Scholarship Program award authorized
27pursuant to this article shall be defined as a full-time equivalent
28grant. An award to a part-time student shall be a fraction of a
29full-time grant, as determined by the proportionate amount charged
30for the tuition and fees. A part-time student shall not be
31discriminated against in the selection of Middle Class Scholarship
32Program awards. For purposes of this section, “full-time student”
33and “part-time student” have the same meaning as specified in
34subdivision (f) of Section 69432.7.

begin delete

35(e) Section 70023 does not apply to a student attending a private
36nonprofit postsecondary educational institution.

end delete
37begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 70023 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
38read:end insert

39

70023.  

(a) begin insert(1)end insertbegin insertend insert For each academic year, the commission shall
40determine an amount sufficient, when combined with other federal,
P6    1state, or institutionally administered student grants or fee waivers
2received by eligible students from other sources, to provide
3scholarships to eligible students in the amounts described in
4paragraphs (2) and (3) of subdivision (a) of Section 70022. The
5University of California and the California State University shall
6provide the commission with any financial aid data that are
7necessary for the determination of these amounts.

begin insert

8
(2) (A) Commencing with the 2017-18 academic year, a student
9who attends a participating private nonprofit postsecondary
10educational institution and meets the requirements of subdivision
11(a) of Section 70022 shall be eligible to receive up to 40 percent
12of the amount of the maximum grant award for which that student
13would be eligible under the Cal Grant Program established
14pursuant to Chapter 1.7 (commencing with Section 69430).

end insert
begin insert

15
(B) For purposes of this paragraph, a “participating private
16nonprofit postsecondary educational institution” includes only an
17institution that meets both of the following requirements:

end insert
begin insert

18
(i) It is a qualifying institution as defined in subdivision (l) of
19Section 69432.7.

end insert
begin insert

20
(ii) It informs the Student Aid Commission, in writing and in a
21timely manner, that it chooses to participate in the scholarship
22program established by this article.

end insert

23(b) The commission shall annually determine if the amounts
24appropriated under this section in each fiscal year are sufficient to
25cover the costs of the scholarships as projected to be awarded
26pursuant to the program. If those amounts are not sufficient for
27this purpose, the scholarships shall be reduced proportionately by
28an equal percentage for all recipients of scholarships under this
29article.

30(c) The commission may adopt regulations necessary to carry
31out the purposes of this article under subdivision (b) as emergency
32regulations in accordance with Chapter 3.5 (commencing with
33Section 11340) of Part 1 of Division 3 of Title 2 of the Government
34Code. For purposes of the Administrative Procedure Act, including
35Section 11349.6 of the Government Code, the adoption of those
36regulations shall be deemed to be an emergency and necessary for
37the immediate preservation of the public peace, health and safety,
38or general welfare, notwithstanding subdivision (e) of Section
3911346.1 of the Government Code. Notwithstanding subdivision
40(e) of Section 11346.1 of the Government Code, any regulation
P7    1adopted pursuant to this section shall not remain in effect more
2than 180 days unless the commission complies with all provisions
3of Chapter 3.5 (commencing with Section 11340) of Part 1 of
4Division 3 of Title 2 of the Government Code, as required by
5subdivision (e) of Section 11346.1 of the Government Code.

6(d) The unencumbered balance, as of June 30 of each fiscal
7year, of the amount appropriated from the Middle Class Scholarship
8Fund pursuant to paragraph (1) of subdivision (e) shall revert to
9the General Fund.

10(e) (1) Upon order of the Director of Finance, the following
11amounts shall be transferred from the General Fund to the Middle
12Class Scholarship Fund, and are hereby appropriated to the
13commission for allocation pursuant to this article:

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

16(B) For the 2015-16 fiscal year, eighty-two million dollars
17($82,000,000).

18(C) For the 2016-17 fiscal year, one hundred sixteen million
19dollars ($116,000,000).

20(D) For the 2017-18 fiscal year and for each fiscal year
21thereafter, one hundred fifty-nine million dollars ($159,000,000).

22(2) An annual appropriation to the commission is hereby
23established in the amounts and for the fiscal years described in
24paragraph (1) to carry out the purposes of this section and Section
2570022.

26(3) It is the intent of the Legislature that any savings realized
27from changes made to the allocations under this subdivision by a
28bill providing for appropriations related to the Budget Bill for the
292015-16 fiscal year shall be used to support higher education.

30(4) The funds transferred and appropriated pursuant to paragraph
31(1) shall only be available for encumbrance in the fiscal year in
32which they are transferred, and the General Fund shall have no
33liability or any obligation beyond the transfers explicitly authorized
34in paragraph (1) unless a subsequent transfer or allocation is
35required pursuant to statute.

36(5) In any fiscal year, additional appropriations may be enacted
37pursuant to statute to carry out the purposes of this article.

38(6) (A) Beginning with the Governor’s Budget proposal for the
392014-15 fiscal year, and in the Governor’s Budget for each fiscal
40year thereafter, the Department of Finance shall include a fund
P8    1condition statement for the Middle Class Scholarship Fund for the
2fiscal year of the proposed budget and the two immediately
3preceding fiscal years prepared in accordance with existing law.

4(B) Upon order of the Director of Finance and commencing
5with the 2013-14 fiscal year, if the May Revision projects a budget
6deficit for the next fiscal year, the amount specified in paragraph
7(1) for the fiscal year for which the budget deficit is projected may
8be reduced by up to 33 percent.

9(f) Subject to an appropriation in the annual Budget Act for its
10purposes, the commission may begin implementation of, and
11establish outreach services relating to, this article.



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