Amended in Senate April 19, 2016

Amended in Senate April 6, 2016

Senate Bill No. 1314

Introduced by Senator Block

February 19, 2016

An act to amend begin delete Section 69434 end delete begin insert Sections 66021.2, 69434, 69435.3, 69436, 70022, 70022.5, and 70023 end insert of the Education Code, relating to student financial begin delete aid. end delete begin insert aid, and making an appropriation therefor. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 1314, as amended, Block. Cal Grant begin delete A Entitlement Program. end delete begin insert Program: Middle Class Scholarship Program: community college baccalaureate degree program students. end insert

Existing law, the Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program, establishes the Cal Grant A begin insert and B end insert Entitlement begin delete Program award end delete begin insert Awards, the California Community College Transfer Entitlement Awards, and the Competitive Cal Grant A and B end insert begin insert Awards end insert and eligibility requirements for begin delete that award end delete begin insert these awards end insert for participating students attending qualifying institutions.

This bill would begin delete specify end delete begin insert provide end insert that community college students participating in specified baccalaureate degree programs who also satisfy begin delete the end delete begin insert specified end insert eligibility requirements begin delete for the Cal Grant A entitlement award end delete shall receive begin delete an award end delete begin insert these awards end insert for upper division coursework fees.

begin insert

Under existing law, the Middle Class Scholarship Program provides that 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 requires the University of California and the California State University to provide the Student Aid Commission with any financial aid data that are necessary for the determination of award amounts.

end insert begin insert

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 2017-18 fiscal year, and each fiscal year thereafter.

end insert begin insert

This bill would extend awards under the Middle Class Scholarship Program to community college students enrolled in upper division coursework of a baccalaureate degree program, as specified, and would require the Office of the Chancellor of the California Community Colleges to provide the commission with any financial data that are necessary for the determination of award amounts for these students. By expanding the appropriation described above, the bill would make an appropriation.

end insert

Vote: majority. Appropriation:  begin delete no end delete begin insert yes end insert . Fiscal committee: yes. State-mandated local program: no.

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 66021.2 of the end insert begin insert Education Code end insert begin insert is amended
to read: end insert

66021.2.  

Consistent with the state’s historic commitment to
provide educational opportunity by ensuring both student access
to and selection of an institution of higher education for students
with financial need, the long-term policy of the
Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program
established pursuant to Chapter 1.7 (commencing with Section
69430) of Part 42 shall be as follows:

(a) Commencing with the 2001-02 academic year and every
year thereafter, an applicant for a Cal Grant A or B award shall
receive an award that is not in excess of the financial need amount
determined by the Student Aid Commission pursuant to Section
69432.9 if he or she complies with all of the following
requirements:

(1) Demonstrates financial need under the criteria adopted
pursuant to Section 69432.9.

(2) Attains a grade point average, as defined in Section 69432.7,
meeting the requirements of Chapter 1.7 (commencing with Section
69430) of Part 42.

(3) Complies with each of the eligibility criteria applicable to
the type of Cal Grant award for which he or she is applying.

(b) (1)  begin insert (A) end insert begin insert   end insert The maximum Cal Grant A award for a student
attending the University of California or the California State
University shall equal the mandatory systemwide fees in begin delete each of
those segments. end delete begin insert the segment attended by the student. end insert

begin insert

(B) The maximum Cal Grant B award for a student who is
attending the University of California, the California State
University, or the California Community Colleges when not
enrolled in upper division coursework as described in paragraph
(2), shall equal the mandatory systemwide fees in the segment
attended by the student, except for community college students
who receive waivers from the Board of Governors of the California
Community Colleges, plus the access award calculated as specified
in Article 3 (commencing with Section 69435) of Chapter 1.7 of
Part 42, except that in the first year of enrollment in a qualifying
institution, the maximum award shall be only for the amount of
the access award.

end insert

(2)  begin insert (A) end insert begin insert   end insert The maximum Cal Grant begin delete B end delete begin insert A end insert award for a begin delete student to
which this subdivision is applicable shall equal the mandatory
systemwide fees in the segment attended by the student, except
for community college students who receive waivers from the
Board of Governors of the California Community Colleges, plus
the access award calculated as specified in Article 3 (commencing
with Section 69435) of Chapter 1.7 of Part 42, except that in the
first year of enrollment in a qualifying institution, the maximum
award shall be only for the amount of the access award. end delete begin insert community
college student enrolled in upper division coursework of a
baccalaureate degree program, described in Article 3 (commencing
with Section 78040) of Chapter 1 of Part 48 of Division 7, shall
equal the per unit fees charged for the upper division coursework
for the academic term. end insert

begin insert

(B) The maximum Cal Grant B award for a community college
student enrolled in upper division coursework of a baccalaureate
degree program, described in Article 3 (commencing with Section
78040) of Chapter 1 of Part 48 of Division 7, shall equal the per
unit fees charged for the upper division coursework for the
academic term, plus the access award calculated as specified in
Article 3 (commencing with Section 69435) of Chapter 1.7 of Part
42.

end insert

(c) The maximum Cal Grant awards for students attending
nonpublic institutions shall be as follows:

(1) The maximum Cal Grant A award shall equal the tuition
award level established in the Budget Act of 2000, or the amount
as adjusted in subsequent annual budget acts.

(2) The maximum Cal Grant B award shall equal the amount
of the tuition award as established in the Budget Act of 2000, or
the amount as adjusted in subsequent annual budget acts, plus the
amount of the access costs specified in Section 69435, except that,
in the first year of enrollment in a qualifying institution, the
maximum award shall be only for the amount of the access award.

(d) Commencing with the 2000-01 academic year, and each
academic year thereafter, the Cal Grant C award shall be utilized
only for occupational or technical training.

(e) Commencing with the 2000-01 academic year, and each
academic year thereafter, the Cal Grant T award shall be used only
for one academic year of full-time attendance in a program of
professional preparation that has been approved by the California
Commission on Teacher Credentialing.

(f) An institution of higher education in this state that
participates in the Ortiz-Pacheco-Poochigian-Vasconcellos Cal
Grant Program shall not reduce its level of per capita need-based
institutional financial aid to undergraduate students, excluding
loans, below the total level awarded in the 2000-01 academic year.

(g) The implementation of the policy set forth in this section
shall maintain a balance between the state’s policy goals of
ensuring student access to and selection of an institution of higher
education for students with financial need and academic merit.

(h) It is the policy of the State of California that the
Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program
supplement the federal Pell Grant program.

(i) An award under the Ortiz-Pacheco-Poochigian-Vasconcellos
Cal Grant Program shall not guarantee admission to an institution
of higher education or admission to a specific campus or program.

begin delete SECTION 1. end delete

begin insert SEC. 2. end insert   

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) (1) 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.

(2) A community college student participating in a baccalaureate
degree program pursuant to Article 3 (commencing with Section
78040) of Chapter 1 of Part 48 of Division 7 who meets the Cal
Grant A Entitlement Program criteria specified in this article shall
receive a Cal Grant A award for upper division coursework fees
pursuant to Section 66021.2.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 69435.3 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

69435.3.  

(a) Any California resident is entitled to receive a
Cal Grant B award, and the commission shall allocate that award
pursuant to Section 66021.2, 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 2.0 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 B recipients as set forth in
Section 69432.7.

(5) The student is pursuing an undergraduate academic program
of not less than one academic year 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.

(b) A begin delete student end delete begin insert student, including a community college student
participating in upper division coursework in a baccalaureate
degree program pursuant to Article 3 (commencing with Section
78040) of Chapter 1 of Part 48 of Division 7, end insert who meets the Cal
Grant B Entitlement Program begin insert or Competitive Program end insert criteria
specified in this article shall receive a Cal Grant B award for access
costs and tuition and begin delete fees end delete begin insert fees, as applicable, end insert pursuant to Section
66021.2.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 69436 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

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
begin delete program, end delete begin insert program or upon matriculation into the upper division
coursework of a community college baccalaureate program,
described in Article 3 (commencing with Section 78040) of Chapter
1 of Part 48 of Division 7, end insert 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 begin insert or who matriculates into the upper division
coursework of a community college baccalaureate program end insert begin insert ,
described in Article 3 (commencing with Section 78040) of Chapter
1 of Part 48 of Division 7, end insert 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.

(10) (A) Except as provided for in subparagraph (B), the student
attended a California community college in the academic year
immediately preceding the academic year for which the award will
be used.

(B) A student otherwise eligible to receive an award pursuant
to this section, who attended a California community college in
the 2011-12 academic year, may use the award for the 2012-13
and 2013-14 academic years.

(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.

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 70022 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

70022.  

(a) (1) Subject to an available and sufficient
appropriation, begin delete commencing with the 2014-15 academic year, end delete an
undergraduate student enrolled in the California State University
or the University of begin delete California end delete begin insert California, or a community college
student enrolled in upper division coursework of a community
college baccalaureate program, end insert begin insert described in Article 3
(commencing with Section 78040) of Chapter 1 of Part 48 of
Division 7, end insert who meets the requirements of paragraph (2) is eligible
for a scholarship award as described in that paragraph.

(2) Each academic year, except as provided in paragraphs (3)
and (4), an eligible student shall receive a scholarship award in an
amount that, combined with other federal, state, or institutionally
administered student grants or fee waivers received by an eligible
student, is up to 40 percent of the amount charged to that student
in that academic year for mandatory systemwide tuition and begin delete fees, end delete
begin insert fees, or for an eligible community college student, up to 40 percent
of the amount charged to that student in upper division fees for a
community college baccalaureate degree program, end insert if all of the
following requirements are met, to the satisfaction of the
commission, each academic year:

(A) The student’s annual household income does not exceed
one hundred fifty thousand dollars ($150,000). For awards
distributed for the 2016-17 academic year and subsequent
academic years, the commission shall annually adjust the maximum
income level set under this subparagraph in accordance with the
percentage changes in the cost of living within the meaning of
paragraph (1) of subdivision (e) of Section 8 of Article XIII  B of
the California Constitution. For purposes of this article, annual
household income shall be calculated in a manner that is consistent
with the requirements applicable to the
Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program
(Chapter 1.7 (commencing with Section 69430)) and Section
69506.

(B) Beginning with awards distributed in the 2015-16 academic
year, the student’s household asset level shall not exceed one
hundred fifty thousand dollars ($150,000). For awards distributed
in the 2016-17 academic year and subsequent academic years, the
commission shall annually adjust the maximum household asset
level set under this subparagraph in accordance with the percentage
changes in the cost of living within the meaning of paragraph (1)
of subdivision (e) of Section 8 of Article XIII B of the California
Constitution. For purposes of this article, student’s household asset
level shall be calculated in a manner that is consistent with the
requirements applicable to the
Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program
(Chapter 1.7 (commencing with Section 69430)) and Section
69506.

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

(D) The student is exempt from paying nonresident tuition.

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

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

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

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

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

(3) (A) The begin delete percentage end delete begin insert percentages end insert specified in paragraph (2)
shall be reduced by 0.6-percent increments per one thousand dollars
($1,000) of annual household income in excess of one hundred
thousand dollars ($100,000), to a minimum 10 begin delete percent of
mandatory systemwide tuition and fees for an academic year, end delete
begin insert percent, end insert provided that no scholarship award shall be provided to
a student with an annual household income exceeding one hundred
fifty thousand dollars ($150,000). Beginning with award
calculations for the 2016-17 academic year, and for subsequent
academic years, the commission shall annually adjust the income
levels specified in this subparagraph by the percentage change in
the cost of living within the meaning of paragraph (1) of
subdivision (e) of Section 8 of Article XIII  B of the California
Constitution and shall adjust the incremental reduction accordingly
to ensure that a minimum of 10 percent of mandatory systemwide
tuition and fees for an academic year are awarded. This reduction
shall be in addition to any reduction required by Section 70023.

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

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

(b) In order for students enrolled in their respective segments
to remain eligible to receive a scholarship award under this article,
the University of California and the California State University
shall not supplant their respective institutional need-based grants
with the funds provided for scholarships under this article, and
shall 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.

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

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

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 70022.5 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

70022.5.  

(a) A scholarship award under this article may be
renewed for a total of the equivalent of four years of full-time
attendance in an undergraduate begin delete program. end delete begin insert program or, for a
community college award recipient, the equivalent of two years
of full-time upper division coursework attendance in the community
college baccalaureate degree program. end insert Commencing with the
2016-17 academic year, the total number of years of eligibility
for grants pursuant to this article shall be based on the student’s
educational level in his or her course of study as designated by the
institution of attendance when the recipient initially receives
payment for a grant.

(b) For a student enrolled in an institutionally prescribed
five-year undergraduate program, a scholarship award under this
article may be renewed for a total of up to five academic years of
attendance as long as the student meets the requirements of Section
70022.

(c) A recipient of a scholarship award under this article who
has completed a baccalaureate degree, and who has been admitted
to and is enrolled in a program of professional teacher preparation
at an institution approved by the Commission on Teacher
Credentialing, is eligible for, but not entitled to, renewal of the
scholarship award for an additional academic year of full-time
attendance as long as the student meets the requirements of Section
70022.

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 70023 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

70023.  

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

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

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

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

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

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

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

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

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

(2) An annual appropriation to the commission is hereby
established in the amounts and for the fiscal years described in
paragraph (1) to carry out the purposes of this section and Section
70022.

(3) It is the intent of the Legislature that any savings realized
from changes made to the allocations under this subdivision by a
bill providing for appropriations related to the Budget Bill for the
2015-16 fiscal year shall be used to support higher education.

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

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

(6) (A) Beginning with the Governor’s Budget proposal for the
2014-15 fiscal year, and in the Governor’s Budget for each fiscal
year thereafter, the Department of Finance shall include a fund
condition statement for the Middle Class Scholarship Fund for the
fiscal year of the proposed budget and the two immediately
preceding fiscal years prepared in accordance with existing law.

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

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