BILL ANALYSIS Ó
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1501|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 1501
Author: John A. Pérez (D), et al.
Amended: 8/21/12 in Senate
Vote: 27 - Urgency
SENATE EDUCATION COMMITTEE : 6-1, 6/27/12
AYES: Lowenthal, Alquist, Liu, Price, Simitian, Vargas
NOES: Huff
NO VOTE RECORDED: Runner, Blakeslee, Hancock, Vacancy
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/16/12
AYES: Kehoe, Alquist, Lieu, Price, Steinberg
NOES: Walters, Dutton
ASSEMBLY FLOOR : 55-20, 5/30/12 - See last page for vote
SUBJECT : Middle Class Scholarship Program
SOURCE : Author
DIGEST : This bill establishes the Middle Class
Scholarship Program, to be administered by the California
Student Aid Commission (CSAC), beginning with the 2012-13
academic year, and provides for an appropriation for
purposes of funding the program, contingent upon the
enactment of AB 1500 (Perez).
Assembly Amendments make clarifying and technical changes.
ANALYSIS : Existing law establishes the CSAC and outlines
CONTINUED
AB 1501
Page
2
its responsibilities which include, among other things, the
administration of the Cal Grant program.
Existing law establishes the Cal Grant Program, to provide
grants to financially needy students to attend college.
The Cal Grant programs include both the entitlement and the
competitive Cal Grant awards. Eligibility for the program
is based upon financial need, grade point average,
California residency, and other eligibility criteria.
Existing law requires the University of California (UC) and
the California State University (CSU) to annually report on
their respective institutional financial aid programs.
Existing law requires the Board of Governors of the CCC to
annually evaluate and issue reports on the fiscal and
educational effectiveness of community college districts
according to outcome measures cooperatively developed with
those districts and to provide assistance when districts
encounter severe management difficulties.
This bill establishes the Middle Class Scholarship Program
under the administration of the CSAC. More specifically
it:
1. Establishes a program which provides scholarships for
mandatory systemwide fees at the UC and CSU and funds
for grants to cover fees, books, and other educational
costs at the CCC.
2. Declares that, beginning with the 2012-13 academic year,
an undergraduate student enrolled at the UC or CSU is
eligible for a scholarship in an amount that, when
combined with other publicly funded student financial
aid received by the student, is at least two-thirds of
the amount charged that student in the academic year for
mandatory systemwide fees if the student:
A. Has a household income that does not exceed
$150,000, except that, students with an annual
income above $150,000 but below $160,000 may
receive an award reduced by 10 percent for every
thousand dollars in excess of $150,000 if the
student otherwise meets eligibility requirements.
CONTINUED
AB 1501
Page
3
B. Is exempt from paying nonresident tuition.
C. Submits a Free Application for Federal Student
Aid (FAFSA), or, if unable to submit a FAFSA,
submits an equivalent application.
D. Makes timely application(s) for other publicly
funded student financial aid programs (defined as
the federal Pell Grant Program, the Cal Grant
Program, and institutional need-based grants) for
which he/she is eligible.
3. Requires the UC, CSU and CCC to report on the
implementation of the bill's provisions, as specified,
as part of existing annual reporting requirements under
specified state law.
4 .Declares the Legislature's intent that:
A. The program augment, and not replace, other
state-supported financial and institutional
need-based grant programs or federal grants.
B. The amount of the award keeps pace with future
increases in mandatory systemwide fees at the UC
and CSU. That the costs of Middle Class
Scholarship Program do not exceed the funding
available in the Middle Class Scholarship Fund and
that a prudent fund balance exists to protect
against fiscal uncertainties.
D. The UC and CSU not raise mandatory systemwide
fees that would decrease the value of the
scholarship.
5. Each academic year, from the revenues in the Middle
Class Scholarship Fund established by Section 70201,
there shall first be set aside $150,000,000, transferred
to the Chancellor of the CCC for allocation, for that
academic year, to community collect districts based on
calculations of full-time equivalent students. Funds
annually allocated to a community college district
pursuant to this paragraph shall be expended, after the
CONTINUED
AB 1501
Page
4
district has consulted with the recognized campus and
district student representatives in the determination of
how the funds are to be expended, for the provision of
grants to students to reduce the impact of enrollment
fees, or to help cover the cost of textbooks and other
educational expense. It is the intent of the
Legislature that the funds provided under this paragraph
meet the specific needs of students at the local
district level.
6. Authorizes the appropriation of each academic year, an
amount to be determined by CSAC, when combined with
other Cal Grants, Pell Grants, and institutional
need-based grants sources, that covers at least
two-thirds of the amount of mandatory systemwide fees.
7. Continuously appropriates the amount determined
necessary by CSAC from the Middle Class Scholarship
Fund, proposed to be established by AB 1500 (Perez), to
the CSAC for allocation to the UC and CSU for purposes
of the scholarship program established by the bill.
8. Provides that, in any academic year, any funds remaining
in the Middle Class Scholarship Fund after Funds have
been allocated to all eligible students of the
respective universities, CSAC is required to hold these
funds in reserve for fiscal uncertainties. CSAC may
expend the funds held in reserve under this subdivision
for adjustments the commission deems necessary in
administering the programs under its jurisdiction in the
current academic year or in subsequent academic years.
9. Provides that the provisions of this bill are contingent
upon the enactment of AB 1500 (Perez).
Comments
Mandatory system wide fees . Fee revenue works
interchangeably with General Fund support to fund the core
instructional mission of the public segments. The state's
portion essentially subsidizes the amount paid by students
in the form of fees. Since 2007-08, state support for the
UC and CSU has declined significantly. The charts below
illustrate the resulting fluctuation in fees at the UC and
CONTINUED
AB 1501
Page
5
the CSU over the last several years.
--------------------------------------------
| UC |
| Mandatory Systemwide |
| Student Fees |
| Resident Undergraduates |
| |
--------------------------------------------
|--------------+--------------+--------------|
| | | |
| Year | Fee Amount | Percent |
| | | Change from |
| | | Prior year |
| | | |
|--------------+--------------+--------------|
| | | |
| 1996-97 | $3,799 | N/A |
| | | |
|--------------+--------------+--------------|
| | | |
| 1997-98 | $3,799 | 0.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 1998-99 | $3,609 | -5.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 1999-00 | $3,429 | -5.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2000-01 | $3,429 | 0.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2001-02 | $3,429 | 0.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2002-03 | $3,834 | 11.8% |
CONTINUED
AB 1501
Page
6
| | | |
|--------------+--------------+--------------|
| | | |
| 2003-04 | $4,984 | 30.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2004-05 | $5,684 | 14.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2005-06 | $6,141 | 8.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2006-07 | $6,141 | 0.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2007-08 | $6,636 | 8.1% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2008-09 | $7,126 | 7.4% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2009-10 | $8,958 | 25.7% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2010-11 | $10,302 | 15.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2011-12 | $12,192 | 18.3% |
| | | |
| | | |
--------------------------------------------
CONTINUED
AB 1501
Page
7
--------------------------------------------
| CSU |
| Mandatory Systemwide |
| Student Fees |
| Resident Undergraduates |
| |
--------------------------------------------
|--------------+--------------+--------------|
| | | |
| Year | Fee Amount | Percent |
| | | Change from |
| | | Prior year |
| | | |
|--------------+--------------+--------------|
| | | |
| 1996-97 | $1,584 | N/A |
| | | |
|--------------+--------------+--------------|
| | | |
| 1997-98 | $1584 | 0.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 1998-99 | $1,506 | -4.9% |
| | | |
|--------------+--------------+--------------|
| | | |
| 1999-00 | $1,428 | -5.2 % |
| | | |
|--------------+--------------+--------------|
| | | |
| 2000-01 | $1,428 | 0.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2001-02 | $1,428 | 0.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2002-03 | $1,500 | 5.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2003-04 | $2,046 | 36.4% |
CONTINUED
AB 1501
Page
8
| | | |
|--------------+--------------+--------------|
| | | |
| 2004-05 | $2,334 | 14.1% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2005-06 | $2,520 | 8.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2006-07 | $2,520 | 0.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2007-08 | $2,772 | 10.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2008-09 | $3,048 | 10.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2009-10 | $4,026 | 32.1% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2010-11 | $4,429 | 10.0% |
| | | |
|--------------+--------------+--------------|
| | | |
| 2011-12 | $5,472 | 23.5% |
| | | |
| | | |
--------------------------------------------
Contingency language . The provisions of this bill are
contingent upon the enactment of AB 1500 (Perez), which
provides for the funding of the Middle Class Scholarship
Program by making the single sales factor (SSF)
apportionment formula mandatory, revising the rules for
assignment of sales, and requiring that revenue derived
from those changes be deposited in the newly established
CONTINUED
AB 1501
Page
9
Middle Class Scholarship Fund. AB 1500 is currently
awaiting action on the Assembly floor.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/21/12)
Alhambra Unified School District
American Federation of State, County and Municipal
Employees, AFL-CIO
American Federation of Teachers Guild
Associated Students of CSU, Chico
Associated Students Sacramento State
Associated Students of the University of California
Associated Students University of California Davis
Associated Students of UC Merced
Associated Students of UC San Diego
Associated Students of Ventura College
Berkeley City Council, City Clerk Department
Bill Rosendahl, Los Angeles City Council
California Community Colleges Chancellor's Office
California Faculty Association
California Hospital Association
California Labor Federation
California Medical Association
California Professional Firefighters
California Public Defenders Association
California School Employees Association, AFL-CIO
California State Association of Electrical Workers
California State Council of Laborers
California State Pipe Trades Council
California State Student Association
California State University
California Student Aid Commission
California Youthbuild Coalition
Carson City Council
Centinela Valley Union High School District
City Controller of Los Angeles
City of Los Angeles City Council
City of Sacramento City Council
Coalition of California Utility Employees
Community College League of California
Congress of California Seniors
CONTINUED
AB 1501
Page
10
Dee Andrews, Long Beach City Council
Dennis P. Zine, Los Angeles City Council
Equality California
Eric Garcettii, Los Angeles City Council
Faculty Association of California Community Colleges
Faculty Association of Rancho Santiago Community College
District
Graduate Student Association, UC Riverside
Hacienda La Puente Unified School District
Herb J. Wesson, Jr., Los Angeles City Council
Inglewood Unified School District
International Longshore & Warehouse Union Southern
California District Council
International Union of Elevator Constructors
James Johnson, Long Beach City Council
Joe Buscaino, Los Angeles City Council
Jose Huizar, Los Angeles City Council
Junior Leagues of California
Laborers' Locals 777 & 792
Long Beach City Council
Los Angeles County Democratic Party
Los Angeles County Federation of Labor, AFL-CIO
Los Angeles County Sheriff's Department
Los Angeles Unified School District
Los Rios Community College District
Montebello Unified School District
National Association of Social Workers-California Chapter
National Police Clergy Council
Nury Martinez, Los Angeles Board of Education
Office of Mayor Antonio R. Villaraigosa
Patrick O'Donnell, Long Beach City Council
Paul Koretz, Los Angeles City Council
Paul Krekorian, Los Angeles City Council
Richard Alarcon, Los Angeles City Council
Dr. Robert Garcia, Long Beach City Council
Sacramento County Board of Supervisors
Salud Carbajal, Santa Barbara County Board of Supervisors
San Diego County Court Employees Association
San Francisco Youth Commission
Santa Monica-Malibu Unified School District
Santiago Canyon College Associated Student Government
Shasta College Student Senate
Steven Neal, Long Beach City Council
Student Senate for California Community College, Might
CONTINUED
AB 1501
Page
11
Region VI
Student Senate for California Community Colleges
Suja Lowenthal, Long Beach City Council
Tony Cardenas, Los Angeles City Council
Tri-Counties Central Labor Council
UAW Local 2865-The UC Student Workers Union
UAW Local 4123-The CSU Student Workers Union
UAW 5810
University of California
University of California Student Association
Western Association for College Admission Counseling
Western States Council of Sheet Metal Workers
ARGUMENTS IN SUPPORT : According to the author's office,
middle income families that make too much to qualify for
state financial aid have been squeezed by the increased fee
levels. More and more students have to work longer hours
and increase their debt burden and, as fees and other costs
increase, the work and loan burden on students has
increased at a faster rate than grant aid. Increased costs
can hinder a student's progress toward a degree, forcing
students to cut their class load, work more hours, leave
school temporarily, or drop out of school entirely. Middle
class families that have students in the higher education
systems are forced to take on ever increasing student loan
debt loads or simply forgo the dream of higher education.
ASSEMBLY FLOOR : 55-20, 5/30/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Block, Blumenfield, Bonilla, Bradford, Brownley,
Buchanan, Butler, Charles Calderon, Campos, Carter,
Cedillo, Chesbro, Davis, Dickinson, Eng, Feuer, Fong,
Fuentes, Furutani, Galgiani, Gatto, Gordon, Gorell, Hall,
Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman,
Lara, Bonnie Lowenthal, Ma, Mitchell, Monning, Olsen,
Pan, Perea, V. Manuel Pérez, Portantino, Skinner, Smyth,
Solorio, Swanson, Torres, Wieckowski, Williams, Yamada,
John A. Pérez
NOES: Bill Berryhill, Conway, Donnelly, Beth Gaines,
Garrick, Grove, Hagman, Harkey, Jeffries, Jones, Knight,
Logue, Mansoor, Miller, Morrell, Nestande, Nielsen,
Norby, Silva, Wagner
NO VOTE RECORDED: Cook, Fletcher, Halderman, Mendoza,
CONTINUED
AB 1501
Page
12
Valadao
PQ:RM:d 8/21/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED