BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1460 (Cedillo)
Hearing Date: 05/03/2010 Amended: 04/21/2010
Consultant: Dan Troy Policy Vote: ED 6-2
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BILL SUMMARY: SB 1460 would establish the California Dream Act
for the purposes of expanding eligibility for state-administered
financial aid to students exempted from paying nonresident
tuition through specified provisions in law. The bill would
also extend the nonresident tuition exemption to graduates of
adult education and technical schools, provided that the
individuals spent at least one year in a California high school.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Cal Grants $38,000
$38,000 General
CCC fee waivers $2,350
$4,700 $4,700 General*
UC aid $900 $1,800 $1,800
General**
CSU aid $1,300 $2,600 $2,600
General**
*Counts toward meeting the Proposition 98 minimum funding
guarantee
**Combination of General Fund support and fee revenue
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
AB 540 (Firebaugh) of 2001 exempted individuals from paying
nonresident tuition at public California postsecondary
institutions if they attended a California high school for at
least 3 years, graduated from a California high school or
obtained an equivalent degree, registered or attended an
accredited California postsecondary institution not before the
2001-02 year, and, for an alien without unlawful immigration
status, filed an affidavit stating that the student has applied
to legalize their immigration status or will do so as soon as
eligible. Effectively, AB 540 provided in-state tuition on the
basis of secondary school attendance rather than on legal
residency. This bill would extend eligibility for any
state-administered postsecondary institutional financial aid
programs to AB 540 pupils, including Cal Grant awards,
institutional aid, and fee waivers provided by the Board of
Governors of the California Community Colleges. The bill would
also expand the exemption of nonresident tuition to graduates of
adult education and technical schools (current law only
specifies high schools), as long as the pupil has completed at
least one year in a California high school.
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SB 1460 (Cedillo)
According to estimates calculated by the California Student Aid
Commission (CSAC), this bill would result in over $38 million in
new annual expenditures from the Cal Grant program.
The University of California (UC) estimates that 605 AB 540
students would be eligible for approximately $1.8 million in
institutional aid if this bill were in effect. Assuming 65
percent more AB 540 FTEs attend the California State University
(CSU) than UC (CSU has approximately 65 percent more FTEs than
UC), the cost would be approximately $2.6 million, assuming an
average award of $2,661. While it is unclear what response
UC and CSU would take toward allocating these institutional
awards - they may choose to shift more institutional resources
toward aid to meet increased eligibility or they may allocate
lower average grant awards to keep system-wide costs neutral -
it is clear that increasing the pool of eligibility creates
pressure to increase the amount of institutional resources that
go toward financial aid.
According to the Chancellor's Office of the California Community
Colleges (CCCs), there were 34,000 AB 540 students enrolled in
the CCCs in 2008-09. Assuming each student took 6 credits per
semester for two semesters, annual fee revenue would be $10.4
million. Further assuming that 45 percent of those fees were
waived (similar to the overall percentage of students receiving
waivers), the lost revenue would be $4.7 million. As community
college fee waivers are offset by Proposition 98 general fund
appropriations, this provision would have a direct state cost.
The bill's provision to extend the nonresident tuition exemption
to those graduating from any secondary school would also likely
increase state costs, though this cost is unknown at this time.
There have been several legislative efforts to expand
postsecondary financial aid to AB 540 students. SB 160
(Cedillo), which would have made AB 540 students eligible for UC
and CSU institutional aid, was held on this committee's suspense
file in 2009. Other similar measures, SB 160 (Cedillo, 2005)
and SB 1 (Cedillo, 2007) and SB 1301 (2008) were vetoed by the
Governor. The Governor's veto message of SB 1301 cited the
state's precarious fiscal condition.